Briefs: US construction down 61,000 rooms; By Mercure debuts in Estonia

US construction down 61,000 rooms: The number of hotel rooms under construction in the U.S. slipped to about 61,000 from the country’s all-time high in early 2020, as per December 2021 pipeline data by STR. Although activity in the planning stage has risen significantly, the final two phases of the pipeline, construction and final planning, also fell by double digits from the same time last year.

  • In construction: 158,906 rooms (-19.2%)
  • Final planning: 185,231 rooms (-20.6%)
  • Planning: 284,502 rooms (+38.9%)

2021 was the second consecutive year with fewer rooms and final planning. However, the increase in planning activity could hints that the pandemic’s impact on the pipeline will be different than what happened during the Great Recession. As of January 5, 2022, there were more than 15,000 rooms under construction in New York City. Five more markets had more than 4,500 rooms in the final phase of the pipeline:

  1.  New York (15,069 rooms)
  2.  Las Vegas (5,368 rooms)
  3.  Atlanta (5,078 rooms)
  4.  Dallas (4,764 rooms)
  5.  Nashville (4,708 rooms)
  6.  Los Angeles (4,620 rooms)

Holiday demand in November and December helped performance levels to improve in New York City, with the market reporting the highest weekly occupancy level among all the STR-defined markets.

Rendering of the By Mercure hotel in Tallinn

By Mercure in Tallinn: Accor announced it has signed an agreement with Palmgroup OU for a hotel close to the Tallinn Airport. The 132-key hotel, which will open by the end of March, will be the debut property of the By Mercure brand in Estonia, going on to join the Mercure brand in the future. The existing 4-star Ülemiste Hotel at Lennujaama tee 2 by Lennart Meri Airport will be rebranded to join Accor’s network. The five-story hotel will include a restaurant and rooftop bar with executive lounge. By Mercure branded hotels use their own property name along with the brand’s for up to five years, working towards a full integration into the Mercure family.

Sale of dusitD2 Chiang Mai: Dusit REIT Management, the manager of the Bangkok-based Dusit Thani Freehold and Leasehold Real Estate Investment Trust (DREIT), has approved a resolution to sell dusitD2 Chiang Mai hotel to TCC Hotel Chiangmai Co., Ltd., a subsidiary of Asset World Corp. PLC, for 435 million Thai Baht (US$13 million). The sale, which is subject to the approval of shareholders at the EGM on January 27, is part of Dusit REIT Management’s plan to restructure DREIT’s assets. Since 2010, dusitD2 Chiang Mai has been part of Dusit Hotels and Resorts’ portfolio, with a total investment of 362 million Thai Baht (US$10.87 million). The hotel’s sale is expected to help increase DREIT’s asset value. Money generated from the sale is likely to be invested in property upgrades and/or more potential assets. The hotel will continue to operate as dusitD2 Chiang Mai after the sale until TCC Hotel starts its transformation process of the property.

IHG’s hunt for culinary superstar: IHG Hotels & Resorts has launched a hunt for the next culinary superstar in Singapore. The successful candidate will win a contract for the role of chef de cuisine at the InterContinental Singapore and will have their own named restaurant at the hotel. The winner will be in charge of the daily operations of the hotel’s 130-seater restaurant, which features an open kitchen concept, charcuterie and cheese room, wood-fired oven, main show kitchens and a dessert station. Applications for the contest close on February 2.

Hotel Indigo sells for US$19 million: Austin Herlihy and Chris Parker of Radius Commercial Real Estate acquired Hotel Indigo, the 41-key boutique hotel on the Santa Barbara beachfront, for more than US$19 million (US$472,000 per key) in late 2021. The listing of the hotel generates 11 offers and closed in only 45 days. Radius Commercial plans to continue operating the hotel as an independent or branded property. Laurie and Mark Recordon, the partnership and previous owner of the hotel, decided to sell the property as the franchise agreement was nearing its expiration date. They bought the hotel, a former youth hostel, in 2010 out of a foreclosure.

Sonder grows US portfolio: Sonder Holdings Inc., Montreal, Canada, has added more than 25 new buildings across the U.S. to its portfolio in the second half of 2021. These new properties include both hotels and apartment style spaces. Sonder’s expansion in the East Coast includes buildings in Boston, Miami, New York City, Philadelphia and Washington D.C. In Washington D.C., Sonder recently opened three new buildings and currently has 300 live units in the city. In the Central region, Sonder added 10 new buildings across Atlanta, Dallas, Nashville, New Orleans and San Antonio. In the Western region, Sonder added buildings in Los Angeles, Palm Springs, San Francisco and Seattle. Alongside the new buildings, Sonder has also contracted several hotel and apartment style spaces, including partnering with Property Markets Group for the second time in Florida to operate a 130-unit building in Miami.

Makeready adds to management portfolio: Makeready, Dallas, Texas, announced the addition of The Ryder Hotel and Little Palm in Charleston, South Carolina, to its management portfolio. The 91-key boutique lifestyle hotel opened in May 2021. Makeready’s restaurant and bar team will manage the hotel’s F&B concept, Little Palm.