US construction sliding: The U.S. hotel pipeline continues to decline in the year’s second half, with hotel construction seeing a decline for seven consecutive months, as per STR’s latest data for June. Rooms in construction in New York City and Nashville constituted a major portion of the markets’ current supply. On the other hand, planning activity has been rising nationally, albeit at a slower pace, with markets like Miami, Phoenix and Nashville showing increased interest from developers.
- In Construction: 149,198 rooms (-20.1%)
- Final Planning: 178,809 rooms (-11.3%)
- Planning: 281,190 rooms (+6.1%)
Soaring debt costs along with the ongoing supply chain disruptions are expected to further delay projects from breaking ground, leading to a further decline in rooms in construction. New supply is not expected to see a major headwind in the foreseeable future, the report said. With 10.8% of existing supply (13,568 rooms), New York City led as the major market in terms of rooms in construction. With 15.8% of existing supply (10,177 room), Miami accounted for the highest number of rooms in the planning phase of the pipeline.
Hilton’s Jacobs on the pipeline: As Hilton prepares to open its 7,000th hotel, with another 2,700 in its pipeline, CFO and President of Global Development Kevin Jacobs stated that as the global giant recovers from the pandemic, growth remains a positive story. Net unit growth pre-pandemic stood at 6% to 7% annually, and he said Hilton has been growing at a 5% clip more recently, adding that the company is confident it will return pre-pandemic growth rates over the next few years. Jacobs said that inside the United States, Hilton sees more opportunities in secondary markets, while international growth represent more than half of its development pipeline. Hilton also increased conversion signings by 15% in the last quarter, representing nearly 20% of all its signing.
JV secures loan to refinance New Jersey hotel: A joint venture between Morristown, New Jersey-based Hampshire Companies and Frisco, Colorado-based The Pinnacle Companies has secured a debt package worth US$45.5 million from Hall Structured Finance, Dallas, Texas, to refinance a Marriott-branded hotel in northern New Jersey. Hall Structured Finance has provided the first mortgage bridge loan on the 159-key MC Hotel in Montclair, New Jersey, which operates under the Autograph Collection. BayBridge Real Estate Capital’s Jay Miller, Spencer Miller and A.J. Felberbaum arranged the deal.
Broadshore closes first JV loan: Broadshore Capital Partners, Los Angeles, California, has announced a US$150 million hospitality investment program, in partnership with a global alternative investment manager. The partnership closed its first loan, a US$19.8 million mezzanine construction loan to RevPAR Companies to develop the 200-key AC Hotel by Marriott in Seattle, Washington.
GEMS launches hospitality school, foundation: GEMS Holdings Ltd., the Caribbean-based company which owns, manages and develops luxury properties, has announced two new philanthropic initiatives — GEMS Foundation and GEMS Hospitality School. The hospitality school will enable students to gain practical skills in several aspects of hospitality, including F&B, front desk operations, housekeeping, bartending and security. Each program will run for three months. The GEMS Foundation is a non-profit initiative which supports projects which will have a sustainable and positive impact on the environment, entrepreneurship, education and entertainment and the arts. GEMS will contribute to the foundation annually and will provide a funding opportunity mechanism for visiting guests to directly contribute to the foundation or to a specific project which the foundation is supporting.