Briefs: Summit closes Hilton Garden Inn sale; US occupancy declines

Summit closes Hilton Garden Inn sale: Summit Hotel Properties, Austin, Texas, has closed the sale of the 169-room Hilton Garden Inn San Francisco Airport North for US$75 million (US$444,000 per key) through its joint venture with GIC. As a result of the disposition, Summit will forego a US$7.1 million renovation of the property that was scheduled for later this year. The transaction represents 1% capitalization rate based on the hotel’s net operating income after a 4% FF&E reserve for the 12 months ended March 31, 2022. The joint venture acquired the hotel in October 2019 for US$58 million or US$343,000 per key, which resulted in a US$20.5 million net gain on sale. The proceeds from the sale are expected to be around US$73 million, of which Summit’s share will be around US$37 million. The company plans to use the proceeds of the sale, along with existing cash, to repay its last remaining debt maturity for US$62 million. Summit’s current portfolio comprises 100 hotels, of which 61 are wholly owned, with 15,059 rooms across 24 states.

Hilton Garden Inn San Francisco Airport North

US occupancy declines: Hotel occupancy in the U.S. fell from the previous week although ADR saw a slight increase, according to STR’s latest data through May 7.

  • Occupancy: 63.9% (-6.1%)
  • ADR: US$147.24 (+12%)
  • RevPAR: US$94.10 (+5.1%)

Among the Top 25 Markets, San Diego recorded the highest occupancy increase over 2019 (+5.6% to 74.5%), with Chicago seeing the largest occupancy decrease (-22.2% to 59.2%). The steepest RevPAR deficits were in San Francisco (-29.1% to US$142.6) and Philadelphia (-26.7% to US$89.06).

International travel recovery projection: International departures are expected to reach 68% of the pre-pandemic levels globally this year and is likely to improve to 82% in 2023 and 97% in 2024, showed recent data by GlobalData. International departures are predicted to make a full recovery by 2025 at 101% of 2019 levels, with an estimated 1.5 billion international departures. The trajectory of this recovery, however, will not be uniform across regions or countries. International travel from North America improved in 2021, with international departures growing 15% YOY. The U.S. became the world’s biggest outbound travel market in 2021. This year, ahead of other regions, outbound departures from North America are estimated to reach 69% of 2019 levels, before recovering fully by 2024, at 102% of 2019 levels. International departures from European countries are projected to reach 69% of 2019 levels this year. Travel recovery in Europe has to contend with inflation, surging living costs and the war in Ukraine. Departures, by 2025, is likely to be 98% of 2019 figures. Asia Pacific is projected to lag, with outbound departures reaching only 67% of 2019 levels this year.

Rescuers recover last missing body in Cuba hotel blast: Rescue officials in Cuba have recovered the body of the last person who was believed to be missing after a massive explosion blew the sides off the century-old Hotel Saratoga in Havana, Cuba. A total of 45 people have died so far and 15 are hospitalized. A gas leak is said to have caused the explosion on May 6. The hotel was closed at the time of the explosion and was slated to open on Monday. Most of those who were killed or injured were the hotel’s staff or passers-by, including a Spanish tourist.

AHLA’s youth program: More than 50 individuals from traditionally underserved populations have graduated from the Empowering Youth Program (EYP) across the U.S. and are getting jobs in the industry, announced the American Hotel & Lodging Foundation. This year, a total of US$175,000 was awarded to community-based organizations across Los Angeles, Orlando, New Orleans and Washington D.C. for participants between the ages of 16-24.

US travel trend: Travel intent in the U.S. continued to lean on the domestic market, with 78% of leisure guests already booking a domestic trip or were highly likely to, revealed the latest Hotel Guest Survey from BVA BDRC. An average of 5.5 leisure trips were taken over in the past two years, led by Generation Y with 6.3 trips compared to 2.2 overseas leisure trips. People seemed to prefer city breaks, with activity and adventure emerging as a popular trend among those traveling overseas. About 28% of guests perceived that the hotels’ own websites offered better rates compared to 31% preferring OTAs. In terms of booking, hotel brand sites were the preferred booking platform for 54% of business travelers and 48% of leisure travelers.