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Briefs: Hotel Equities adds 7 in South Carolina; Aleph Hospitality grows in Uganda

Hotel Equities adds 7 in South Carolina: Hotel Equities, Alpharetta, Georgia, will manage seven full- and select-service hotels owned by Sejwad Hospitality, the Columbia, South Carolina-based family-owned development company. The hotels are predominantly located in Columbia and will help Hotel Equities grow its footprint in the South Carolina market, which includes five existing hotels and two new properties under construction. Hotel Equities operates 41 full-service and lifestyle properties across its 250-hotel portfolio.

CBRE arranges sale of Courtyard: CBRE has arranged the sale of the 245-key Courtyard San Diego Downtown Hotel by Marriott to an affiliate of Certares Management, New York, in partnership with Philadelphia, Pennsylvania-based management company HHM. The building was built in 1928 as the San Diego Trust & Savings Bank and was converted into a hotel in 1999. The 245-room hotel includes the Safe Deposit room with the original 47,000-pound Mosler Safe Company vault door. All the rooms recently underwent a US$4.5 million renovation.

Best Western Plus The Athena Hotel

Aleph Hospitality grows in Uganda: Aleph Hospitality, Dubai, U.A.E., has signed its third hotel in Uganda by taking over management of the Best Western Plus The Athena Hotel in Kampala. Aleph has targeted 50 hotels in the Middle East and Africa by 2026 and manages hotels directly for owners, either on a franchise basis for branded properties or as a white label operator for independently-branded hotels.

US performance improves: Hotel performance in the U.S. improved from the previous week, while RevPAR touched an all-time high on a nominal basis, revealed STR’s latest data through July 23.

  • Occupancy: 72.8% (-6%)
  • ADR: US$158.79 (+16.4%)
  • RevPAR: US$115.59 (+9.3%)

In addition to the weekly RevPAR level, occupancy was the highest since early August 2019. Among the Top 25 Markets, only Orlando saw occupancy rising over 2019 (+2.2% to 81.8%). San Diego (87.1%), Oahu Island (86.2%) and Seattle (85.7%) led the major markets in absolute occupancy for the week. San Diego registered the largest ADR gain over 2019 (+40.5% to US$286.50). San Francisco was the only market to record a dip in ADR (-5.6% to US$225.61). The steepest RevPAR deficits were in San Francisco (-20.5% to US$170.99) and Washington, D.C. (-12.3% to US$108.33).

Cambria in Nashville sells for US$109.5M: Choice Hotels International, Rockville, Maryland, has sold the 225-key Cambria Hotel Nashville Downtown for US$109.5 million and has also entered into a new long-term franchise agreement with the buyer. The hotel will now be managed by Boson, Massachusetts-based Pyramid Global Hospitality. Currently, there are over 60 Cambria hotels open in the U.S., with almost 70 more properties in the pipeline.

Pyramid Global adds to portfolio: Pyramid Global Hospitality, Boston, Massachusetts, has taken over operations of the 400-key Hyatt Regency Houston West in Houston, Texas.

Fairmont signs in Long Beach: Fairmont Hotels & Resorts, in partnership with Long Beach, California-based Pacific6 Enterprises, has announced the redevelopment of the historic Breakers Hotel in Long Beach. The property, which is currently undergoing extensive renovations and restorations, will reopen in October 2023 as Fairmont The Breakers, Long Beach. The reimagined luxury boutique hotel will feature 185 rooms, including 26 suites, a rooftop pool and terrace, an open-air rooftop lounge and bar with 360-degree views of the Pacific Ocean and Los Angeles Basin, a two-story spa, fitness and wellness center, a live jazz club and music club. The hotel will also include over 12,000 square feet of flexible meeting space and five dining outlets, including the reopening of the Sky Room restaurant. The building was designated as a historic landmark in 1989, which meant some renovation processes had to be approved by the Long Beach Cultural Heritage Commission.

Sunstone completes US$850M credit agreement: Sunstone Hotel Investors, Irvine, California, has entered into a second amended and restated credit agreement which grows the company’s unsecured borrowing capacity and extends the maturity of the in-place loans. The amended credit agreement continues to provide a revolving credit facility of US$500 million and increases the aggregate amount of the company’s two term loan facilities from US$108 million to US$350 million. The facilities will bear interest pursuant to a leverage-based pricing grid ranging between 1.35% and 2.25% over the applicable adjusted term SOFR. The revolving credit has two six-month extension options, which would result in extended maturity of July 2027. The loan facilities each have a balance of US$175 million and mature in July 2027 and January 2028. Sunstone used the proceeds received from the incremental borrowing on the term loans to fully repay the US$230 million which was outstanding on its revolving credit facility.

Apple Hospitality extends primary unsecured credit facility: Apple Hospitality REIT, Richmond, Virginia, has refinanced its primary unsecured credit facility, further upgrading the flexibility and strength of its balance sheet. The company entered into an amendment and restatement of its existing unsecured US$850 million credit facility on July 25, increasing the total credit facility to US$1.2 billion and extending the company’s staggered maturity schedule while getting improved pricing terms across the total credit facility. The credit facility consists of a term loan of US$275 million with a maturity date of July 25, 2027; a term loan of up to US$300 million with a maturity date of January 31, 2028, including US$150 million available through a delayed draw option until 180 days from closing; and a revolving credit facility of US$650 million with an initial maturity date of July 25, 2026, which may be extended up to one year subject to certain conditions.

Brazil’s outbound market study: With an average expenditure of US$2,177 per outbound tourist in 2021, Brazil emerged as the seventh highest spending outbound market globally, according to GlobalData’s latest report. Brazil’s average expenditure per outbound tourist is projected to increase to US$2,325 by 2025 to become the sixth highest, after Australia, the U.S., Iceland, Singapore and Mauritius. Brazil’s high average overseas expenditure, along with affordability and accessibility have significant scope to attract tourists to luxury or long-haul destinations. About 60% of Brazilian respondents reported recommendations by friends and family influenced them in deciding destinations, becoming the most influential factor and surpassing the global average of 47%. Meanwhile, 51% of Brazilian consumers feel accessibility is key for traveling and 49% of Brazilian respondents consider affordability as an influencing factor when deciding where to holiday, much below the global average of 58%. Brazil’s outbound destination mix was dominated by Europe, accounting for 68.2% of international departures from Brazil in 2021, followed by North America (28.3%) and South and Central America (3.3%).

CBRE on ESG initiatives: Surging energy costs, which have pushed electricity costs by 10% since May 2021, is expected to accelerate the industry’s focus on sustainability, especially given the shift in traveler preferences towards sustainable tourism and green accommodations, as well as the increasing demand for disclosure around climate risk, revealed a latest report by CBRE. With the Russia-Ukraine conflict exacerbating energy price hikes, this is likely to push hotel operators to invest in long-term environmental upgrades, higher interest rates and sharply decreasing equity prices might offset the positive momentum in the short-term. The hotel industry needs to cut down carbon emissions by 66% by 2030 and 90% by 2050 to keep up pace with the targets mentioned in the Paris Agreement. Operators are focusing on improving equity for all stakeholders, looking to diversify their workforces, franchisee bases and supplier networks and have also introduced initiatives to improve guest and employee wellbeing, labor practices and training programs. Hotel companies are improving reporting on ESG goals, setting diversity goals and executive compensation standards, improving employee engagement and partnering with organizations which promote ESG.

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