US profitability reaches 28-month high: Gross operating profit per available room (GOPPAR) in the U.S. reached its highest level since November 2019, as per STR’s March 2022 P&L data. The GOPPAR level was less than US$10 shy of achieving the March 2019 comparable.
- GOPPAR: US$83.81
- TRevPAR: US$204.84
- EBITDA PAR: US$62.68
- LPAR (labor costs): US$61.45
EBITDA PAR was the industry’s highest since November 2019, while TrevPAR and LPAR were the highest since March 2020. Each of the bottomline metrics saw a dramatic improvement in March, led by the Spring break travel and increased room rates. Overall, the metrics indexed at around 90% of pre-COVID levels. Most of the recovery was driven by leisure travel, with some recovery from the corporate sector as well. Beach destinations continued to lead recovery of TrevPAR and GOPPAR, with Miami achieving 114% of 2019 figures. San Francisco is still trailing compared to other markets, in terms of both TrevPAR and GOPPAR. Overall, eight of the top 10 markets saw GOPPAR crossing 2019 levels.
Europe’s occupancy recovery: Three European countries — the U.K., Poland and Ireland — have achieved occupancy figures exceeding 80% or better than pre-COBID levels, found latest data from STR that will be presented at the International Hospitality Investment Forum (IHIF). Till April 11, the U.K. showed a running 28-day occupancy that was 87% of the 2019 level and the country’s index has been consistently above 80 since February 23. At 84.5 ad 81.3, Poland and Ireland respectively recorded the next highest occupancy levels. However, Poland’s levels have dipped in the recent weeks after hitting a peak index of 94 on March 29. This dramatic rise in occupancy was driven by hosting Ukrainian refugees during the initial days of the Russia-Ukraine war. Overall, recovery of occupancy in Europe has accelerated recently to 70% of pre-pandemic figures, with leisure-dependent markets being the furthest ahead.
There are encouraging signs in the gateway cities that are mostly reliant on corporate demand. According to STR’s occupancy-on-the-books data, most of the major markets are projected to recover to 90-100% of 2019 levels by Mid-May.
Primestar launches new brands: Primestar Group, Berlin, announced the launch of new brands — June SiX, June Stay and WorX — a new product concept with an integrated offering across hotel, long-stay and workspace segments in A-cities in Germany. Primestar’s portfolio consists of 14 franchise hotels across A-cities in Germany. The first flagship June SiX property — June SiX Berlin City West — will open on June 6 with a new bar concept called June Bar. June SiX has been designed as a boutique hotel brand and properties will be located in urban and central areas across Europe. A few of the locations will also feature June Bars. The June Stay, an extension of June SiX, will be the group’s long-stay brand and rooms will include additional space and amenities like home office furniture and kitchenettes. WorX is the company’s co-working brand offered in June SiX and June Stay locations along with the existing 14 hotels. Guests will be able to access through a one-day pass or a subscription model and can use modern desks, co-working space and meeting rooms.
New Radisson Blu in Poland: RIMC Hotels & Resorts, Hamburg, Germany, the new tenants of the Andersia Tower Hotel in Poznan, Poland, has signed a long-term partnership with Frankfurt, Germany-based Deka Immobilien Investment GmbH to operate the 172-key hotel as a Radisson Blu property. The hotel, spread across 15,000 square meters, is located in a mixed-se office tower and includes conference space and wellness facilities. PKF hospitality group, with the support of PKF Poland, announced the new operator of the hotel.
New Zleep Hotel in Denmark: Zleep Hotel Køge in Køge, Denmark, has joined the portfolio of Deutsche Hospitality’s economy brand. The hotel will undergo expansion and modernization which will be completed by early 2024. As part of the expansion plans, the room capacity will be doubled from 50 to 100 rooms. The hotel, located at the old marina, was built in 1989 in the style of an old warehouse.
Giri adds to portfolio: Giri Hotel Management, Quincy, Massachusetts, has assumed management of the Sebasco Harbor Resort in Phippsburg, Maine — their 46th property in New England. The resort, which is situated on the water and offers ocean views, includes on-site restaurants, an outdoor saltwater pool and immediate access to outdoor activities. The resort will open on May 19 for the 2022 season.
Merewether Beach Hotel sells: Sydney hotelier Glenn Piper in partnership with a small syndicate of three investors, has acquired the Merewether Beach Hotel in Newcastle, Australia. Glenn will get the ownership of the iconic hotel in July and said the property will continue to trade as normal for the foreseeable future. The property is a local institution for a century spanning 1,850 square meters and features a triple street front and multi-level pub. HTL Property advised on the deal. Piper recently took on the leasehold of Q Station in Sydney and refurbished Harbord Hotel in Freshwater.
MGM Resorts closes deal with MGM Growth and VICI: MGM Resorts International, Las Vegas, Nevada, has closed the strategic transaction with VICI Properties, Inc. and MGM Growth Properties, LLC, where VICI redeemed a majority of the MGP operating partnership units held by MGM Resorts for US$43 per unit or approximately US$4.4 billion in cash and acquired 100% of the outstanding class A shares of MGP. As part of the deal, the prevailing master lease was amended and restated, providing for an initial term of 25 years, with three 10-year renewals, and an initial annual rent of US$860 million. After the deal, MGM Resorts owns 1% stake in the VICI operating partnership. JP Morgan served as the financial advisor and Weil, Gotshal & Manges LLP served as legal counsel to MGM Resorts.
HFTP rejects AHLA merger offer: The Hospitality Financial and Technology Professionals (HFTP) has rejected a recent unsolicited offer to merge with the American Hotel and Lodging Association (AHLA). The HFTP global board of directors said that a global association with members from the hospitality sector would not be serving their membership by merging with a North American body with an advocacy focus whose constituents are mostly hotels. HFTP made a counteroffer to AHLA to work through MOUs similar to HFTP’s association with other hospitality industry associations. HFTP is a global association of global brands, said HFTP CEO Fran Wolfe, CAE, FIH, adding that their mission was education, not advocacy.