STR, TE revise US forecast: STR and Tourism Economics have adjusted occupancy downward but lifted projections yet again for ADR in the revised U.S. hotel forecast. RevPAR remains on track for full recovery this year on a nominal basis but not until 2025 when adjusted for inflation. The revised forecast adds a bit more than US$4 to the ADR projection for both 2022 and 2023. Occupancy was lowered by less than a percentage point for each year. Leisure demand touched significant levels this summer, with earnings calls indicating that group business travel should be more aligned with pre-COVID patterns during fall and winter. The downward adjustment to occupancy was focused on a slowdown in the economy, which was possibly due to the combination of leisure travelers seeking higher levels of accommodation and budget travelers being priced out of the market.
Rosewood grows European portfolio: Rosewood Hotels & Resorts, Hong Kong, has been selected by Arabella Hospitality, a subsidiary of Schörghuber Corporate Group, to manage Hotel Schloss Fuschl in Austria. The hotel, which will reopen in late 2023 as Rosewood Schloss Fuschl, will mark Rosewood’s second property in Austria, following Rosewood Vienna’s recent opening. Renovations to the 15th century property began this year and will see enhancements to the structure and grounds to feature 98 rooms, including 46 suites and six chalets. The hotel will also see the addition of Asaya, Rosewood’s well-being concept. This is the second partnership between Arabella Hospitality and Rosewood, with the groups presently working to debut Rosewood Munich.
Choice closes Radisson deal: Choice Hotels International, Rockville, Maryland, has completed the acquisition of the franchise business operations and intellectual property of Radisson Hotels Americas for US$675 million from Radisson Hotel Group, including the real estate value of three owned hotels. With this acquisition, Choice has added 67,000 rooms across nine brands. The deal has also grown Choice’s presence in the higher revenue upper upscale and upscale full-service sectors and strengthened its core upper-midscale hospitality sector, especially in the West Coast and Midwest of the U.S. The close of the deal is not expected to change Choice’s present capital allocation strategy related to dividend payment policy and planned share repurchases.
MIG Real Estate acquires DoubleTree: MIG Real Estate, Newport Beach, California, has acquired the 208-room DoubleTree by Hilton Breckenridge in Breckenridge, Colorado, from Broomfield, Colorado-based Vail Resorts Inc. This marks MIG’s 18th hotel and one of four resorts, joining others in Jackson Hole, Sedona and San Diego. Vail Resorts Hospitality will continue to manage the hotel. MIG plans to reposition the hotel with year-round resort activities.
IHCL has best 1Q: The Indian Hotels Co. Ltd. (IHCL) has reported the best first quarter in the company’s history with a consolidated EBITDA of INR 405 crores (US$51 million) for 1Q22, a record Q1 consolidated EBITDA Margin of 31.3% and standalone EBITDA Margin of 36.5%. Revenue of INR 1,293 crores (US$162 million) in Q1 equaled an increase of 250% year over year. All IHCL brands displayed growth and key metro cities such as Mumbai, New Delhi and Bengaluru with RevPAR levels exceeding that of Q1 fiscal 2019-20. IHCL signed 10 new hotels to date in the current financial year, with three hotels each under the Taj and Ginger brands, and two hotels each under the SeleQtions and Vivanta brands. Its current pipeline stands at more than 60 hotels.
Minor returns to profit: Minor International posted a profit of Baht 1.2 billion (US$33 million) in 2Q22, a strong turnaround both year-over-year and quarter-over-quarter from losses of Baht 3.4 billion (US$9.5 million) in 2Q21 and Baht 3.6 billion (US$10.1 million) in 1Q22. Minor Hotels returned to profitability in 2Q22 for the first time since the COVID-19 pandemic. The European portfolio was the standout performer, with NH Hotel Group reporting record-high 2Q results and surpassing pre-pandemic performance for the first time since the emergence of COVID-19. Hotels in Australia also continued to perform well, with average occupancy of 83% in the second quarter and average room rate soaring by 20% YOY, resulting in RevPAR surpassing 2019 levels by 49% due to strong leisure and corporate demand boosted by the resumption of sporting events. The Maldives also continued its strong growth trajectory, outperforming pre-COVID-19 metrics for the fourth consecutive quarter. Average occupancy rate of hotels in Thailand continued to build to 43% in 2Q22, while average room rate in June surpassed 2019 levels.
US performance dips: Hotel performance in the U.S. dipped marginally from the previous week following seasonal patterns, as per STR’s data through August 6.
- Occupancy: 69.9% (-5.7%)
- ADR: US$154.48 (+15.1%)
- RevPAR: US$108.04 (+8.5%)
Among the top 25 markets, St. Louis recorded the largest occupancy increase over 2019 (+7.1% to 75.9%). Oahu Island (84.6%), Seattle (84.8%), and San Diego (83.8%) led the major markets in absolute occupancy. San Diego reported the largest ADR gain (+32% to US$244.86). San Francisco posted the steepest RevPAR deficit (-27.6% to US$166.80).
Jumeirah Living residences in Dubai: Jumeirah Group, Dubai, U.A.E., has partnered with Select Group to launch Jumeirah Living-branded residences to Dubai’s Business Bay, as the flagship of Peninsula, the master community development. Jumeirah Living Residences Business Bay will comprise a 35-story tower featuring 82 premium branded residences with one-, two-, three- and four-bedroom units, along with a full-floor five-bedroom penthouse on the top floor. The building’s architecture will be designed by Killa Design. The tower is expected to be completed in Q4 2025. The building is the fifth tower of Peninsula. Jumeirah Group had previously partnered Select Group for the Jumeirah Living Marina Gate, Dubai Marina.
Global travel prices, hotel rates outlook: Global travel prices are projected to continue its climb through the year and throughout 2023, revealed the 2023 Global Business Travel Forecast published by CWT and the Global Travel Association. Surging fuel charges, labor shortages and inflationary pressures in raw material costs are primary drivers of the expected price growth, as per the report. Hotel prices declined 13.3% in 2020 from 2019 and a further 9.5% in 2021. The report, however, expects both metrics to increase 18.5% in 2022, followed by an 8.2% hike in 2023. Hotel prices have already surpassed pre-pandemic levels in markets like Europe, the Middle East and Africa, and North America and are likely to exceed 2019 levels globally by 2023.