Briefs: Four Seasons to Oman; Sunstone buys in Miami Beach

Four Seasons in Oman: Four Seasons Hotels and Resorts and Oman Tourism Development Co., the executive division of the Sultanate of Oman for tourism development, have announced the upcoming Four Seasons Resort and Private Residences Muscat in Oman. The luxury project will consist of an urban-style resort and private residences with views of the Sea of Oman. Created by redeveloping a former yacht club and marina, the project will comprise 200 rooms and suites and 100 residences. Guests and residents will enjoy access to a private beach, five dining venues, indoor and outdoor pools, extensive meeting spaces, business center, prayer rooms and a bride’s room. The resort will also provide water sports, a tennis center, spa and fitness services and a kids and young adults center. The resort joins Four Seasons’ Middle East portfolio, including the upcoming Four Seasons Private Residences Dubai at Jumeirah and Four Seasons Hotel Diriyah, Saudi Arabia.

The Confidante Miami Beach

Sunstone to acquire The Confidante: Sunstone Hotel Investors, Irvine, California, has agreed with an affiliate of Hyatt Hotels Corp. to purchase for US$232 million (US$684,000 per key) the 339-key The Confidante Miami Beach, which is located on 1.5 acres of fee-simple, oceanfront land in Miami Beach, Florida. After the acquisition, Sunstone will spend US$60 million to reposition the hotel from Hyatt’s Unbound Collection to Andaz Miami Beach. This will bring the all-in basis south of US$900,000 per key. The acquisition will be funded through cash on hand and borrowing from the company’s presently underdrawn revolving credit facility. The renovation work will be done in phases and will start from 4Q22, with completion and rebranding likely in the first half of 2024. The hotel will remain open during the renovation and continue to be managed by Hyatt after the repositioning. The hotel’s purchase price represents a 17.3x multiple on 2022 forecasted hotel EBITDA and a 5% capitalization rate on 2022 forecasted hotel net operating income.

Edyn reports strong Q1: London-based edyn, operators of hybrid lifestyle extended-stay properties in Europe, reported strong Q1 performance with LFL RevPAR significantly ahead of (pre-pandemic) 2019 levels. It witnessed strong recovery in core mid- and long-stay business with more than 60% of Q1 revenue from stays of more than seven nights. It also reported property-level GOP percentage margins delivered more than 60% for stabilizing assets. The group recently opened two assets in Munich with a third opening later this year in Berlin. Two new Locke-branded properties in Zurich and Lisbon are due to open in 2023. These openings and acquisitions are part of edyn’s strategy to replicate the scale and success of its UK portfolio by securing key locations for its brands across European gateway cities.

Caesars looking to sell Flamingo?: Caesars Entertainment, Reno, Nevada, is reportedly looking to sell its Flamingo Las Vegas Hotel & Casino in Las Vegas, Nevada, at more than US$1 billion. Without naming a specific casino, Caesars has said it plans to sell one of its casinos on the Las Vegas Strip as an effort to reduce debt. The company hopes to reach a definitive agreement regarding the sale by the middle of summer. The 3,450-key hotel is one of the oldest on the Strip. Some private equity firms and other operators, who were offered to acquire the casino, have passed on the property as they were hesitant to purchase an older property that would require a lot of maintenance. The Flamingo might also lose business after its acquisition after it is separated from Caesars’ customer loyalty program. New York-based Vici Properties, which owns many Caesars properties, has the right of first refusal on the sale.

US performance update: Hotel occupancy in the U.S. improved compared to the previous week, while ADR saw a slight decline, found STR’s latest data through April 30.
• Occupancy: 66.6% (-3.4%)
• ADR: US$146.67 (+10.2%)
• RevPAR: US$97.72 (+6.4%)
Among the top 25 markets, Phoenix registered the highest occupancy increase over 2019 (+5.5% to 75.9%), while Minneapolis saw the largest occupancy decrease from 2019 (-23.8% to 55.1%). The steepest RevPAR deficits were registered in Boston (-30% to US$128.27) and Minneapolis (-28.5% to US$64.23).

Choice focuses on women franchisees: Choice Hotels International has launched HERtels by Choice to further extend the opportunity of hotel ownership to underrepresented populations, including women entrepreneurs. This newly enhanced program will provide dedicated training, education, mentorship, and financial assistance to advance and empower women entrepreneurs and ensure they thrive as Choice Hotels franchisees. Since last March, as part of a focused effort to increase female ownership – and subsequently lay the groundwork for the HERtels by Choice program – the company has awarded 25 contracts specifically to women entrepreneurs.

RLJ buying back stock: RLJ Lodging Trust reported 1Q22 earnings, highlighted by pro forma RevPAR of US$107.39, representing 74% of 2019 levels, improving 5% from 4Q21. RevPAR versus 2019 was -26%. Adjusted FFO/share of US$0.14 neat Street estimates, as did adjusted EBITDA of US$54.6 million. The board of directors authorized a US$250 million repurchase program, which includes common shares and Series A preferred shares, beginning May 9, with a one-year term. RLJ also announced it recently sold the 238-room Marriott Denver Airport at Gateway Park and the 164-room SpringHill Suites Denver North Westminster for combined US$50 million (~$124,400/key).

Sunstone reports Q1: Sunstone Hotel Investors 1Q22 earnings report showed net income was US$15.1 million as compared to a net loss of US$55.3 million. RevPAR at comparable 12 hotels it owned during both 2022 and 2021 increased 207.7% to US$148.65, while ADR was US$279.95 and occupancy was 53.1%. Total revenues (vs. 2019, 12 hotels) was -27.8%, while April RevPAR was 3.1% (+13.4% ADR), which compares to March RevPAR of -13.9%. Adjusted EBITDAre, excluding noncontrolling interest, increased 285.3% to US$27.2 million. Adjusted FFO attributable to common stockholders per diluted share increased 166.7% to US$0.08. Sunstone also repurchased 4.34 million shares of common stock for total consideration of US$48.4 million ($11.16/share average price), which is approximately US$13.3 million more than what was disclosed by the company in mid-March.

Host with big 1Q beat: Driven by top- and bottom-line outperformance, Host Hotels & Resorts reported 1Q22 results well ahead of expectations, as well as strong guidance moving forward. Beating Street estimates in all categories, RevPAR (vs. 2019) was -18.5%; adjusted FFO/share was US$0.39; adjusted EBITDA was US$306 million; and hotel EBITDA was US$319 million. Host declared a quarterly cash dividend of US$0.06/share, which is double last quarter’s payout and implies a 1.2% yield on the most recent closing price. The greater-than-forecasted dividend increase versus our model reflects stronger recent/near-term fundamental trends within Host’s portfolio. Guidance for 2Q22 suggested US$375-US$410 million adjusted EBITDA range, which is 25% above Street consensus. RevPAR is forecasted to be -8% to -3% (vs. 2019 levels), which compares to March RevPAR of -3.7%.

JLL, EEA partner: JLL has partnered with the Energy and Environment Alliance (EEA) to set and drive ESG reporting standards in the hotel and hospitality industry and spearhead its new Capital Markets Committee through the chair of JLL’s Senior Vice President of Hotels Capital Markets (EMEA) Rekha Toora. The work of the committee will include bringing together industry veterans to share their knowledge on how the hospitality sector is addressing ESG, promoting the growth of sustainable investment and financing into the sector, creating standardized investment KPIs which help to promote benchmarking using common metrics and collecting data to assess the impact on operational performance of assets which have introduced sustainability measures. The committee will also work on facilitating the change of investment committee processes to accommodate the changing regulatory and investment landscape, promoting standards to assess the valuation impact of Net Zero initiatives and monitoring the evolving regulatory landscape and how it is affecting investment appetite.

The Peri adds to portfolio: Standard International, New York City, announced the third The Peri-branded hotel in Bangkok, The Peri Hotel, Bangkok Sukhumvit. Scheduled to open in 2025, the 169-key hotel will be operated by the team behind The Standard Hua Hin and The Standard, Bangkok Mahanakhon, which will open this summer. The hotel will include a lobby bar, specialty restaurant, gym, pool bar and a city beach club. The hotel is part of the brand’s extensive growth plan across Australia and Asia. The hotel joins two other hotels in The Peri’s portfolio — The Peri Hotel, Hua Hin and The Peri Hotel, Khao Yai.

Tripadvisor appoints CEO: Tripadvisor, Needham, Massachusetts, has named Matt Goldberg as the company’s chief executive officer, succeeding co-founder and long-time CEO Stephen Kaufer. During his career, Goldberg has served in several leadership roles in digital content, media and entertainment and travel industries and in B2B and direct-to-consumer models. He is also the founding director of Dataphilanthropy, a non-profit focused on developing programs to apply data to better understand and address economic disparity.

Marriott’s data breach class action to proceed: A federal judge in Maryland has granted class certification in a case of data breach that affected more than 133 million American guests against Marriott and its data security vendor Accenture, paving the way for the litigation to go ahead. The court will allow the case to move forward as a class action on behalf of the first group of claimants the parties had selected, an initial group of around 45 million consumers in Connecticut, California, Florida, Maryland, Georgia and New York. The lawsuit dates back to a case of data breach in 2018 which Marriott realized after it acquired Starwood. By Marriott’s own admission, 133.7 million records of Starwood’s guests had been compromised. In 2019, Marriott acknowledged that besides sensitive personal information about hotel stays, the records included around 5.25 million unencrypted passport numbers and 20.3 million encrypted passport numbers. The decision of Judge Paul Grimm of the U.S. District Court for the Southern District of Maryland allows plaintiffs to seek damage related to overpayment for hotel rooms and statutory and nominal damages. The court also found that guests might be able to recover damages for the value of their private information stolen during the breaches based upon Marriott’s own valuation of the data.

Latin America construction pipeline declines: The hotel construction pipeline in Latin America dipped 7% by projects and 11% by rooms YOY to stand at 563 projects/92,356 rooms, according to Lodging Econometrics. Projects currently under construction stand at 271 projects/49,145 rooms, while those expected to start construction in the next 12 months stand at 148 projects/22,128 rooms. Projects and those in the early planning stage are at 144 projects/21,083 rooms. The early planning stage of the pipeline is the only stage with growth, up 44% by projects and 30% by rooms YOY. This stage of the Latin American pipeline has been growing since its bottom in 1Q21. Mexico led construction pipeline in the region with 216 projects/35,620 rooms. This was followed by Brazil (90 projects/15,115 rooms), Peru (32 projects/3,972 rooms), the Dominican Republic (22 projects/4,853 rooms) and Columbia (18 projects/2,782 rooms). These five countries account for 68% of the rooms in the total pipeline. With 25 projects/3,475 rooms, Mexico City, Mexico, led as the city in Latin America with the biggest pipeline. This was followed by Guadalajara, Mexico (with 21 projects/2,662 rooms), Cancun, Mexico (20 projects/7,653 rooms), Lima, Peru (20 projects/2,862 rooms) and Sao Paulo, Brazil (11 projects/2,101 rooms). Top hotel franchise were Hilton with 105 projects/15,760 rooms, Marriott International with 103 projects/16,302 rooms, Accor with 80 projects/10,140 rooms, and IHG with 58 projects/6,568 rooms. These four companies accounted for 61% of the projects.

Australia’s first YOO hotel: La Vie Hotels & Resorts, Sydney, has secured the exclusive rights to introduce YOO Hotels in the Pacific and will open Australia’s first By Yoo hotel in Melbourne in early 2025. The signing is a joint venture between owners DCF Property Group and M Property. Nu by YOO, which will be located next to ANZAC Station, will feature 88 luxury rooms, a restaurant on the ground floor, bar, gym and a pool. It will be part of a mixed-use development that will house 43 apartments. Home owners will be able to access the hotel’s concierge services and hotel facilities. YOO and its upscale brands, YOO2 and Luxury By YOO2, will also be launching in Australia.

New Castle adds 2 in NY: New Castle Hotels & Resorts, Ridgefield, Connecticut, has entered into an agreement to manage the 114-room Hilton Garden Inn Riverhead and the 131-suite Residence Inn by Marriott Long Island East End. Both the hotels, located next to each other in Riverhead, New York, are owned by Riverhead-based Browning Hotel Properties. New Castle is partnering with Open Ocean Creative to refurbish the existing 6,000-square-feet ballroom at the Residence Inn. The space will be rebranded and provide personalized and VIP treatment for business and leisure markets.