Briefs: WTTC projects big US growth; Driftwood’s largest deal to date

Big US growth projection by WTTC: A US$2 trillion contribution to the U.S. economy by travel and tourism is anticipated in 2022, representing a 6.2% increase over pre-pandemic levels, according to a report from the World Travel & Tourism Council (WTTC). The projections for 2022 by WTTC and Oxford Economics pegs U.S. domestic travel and tourism spend at US$1.1 trillion, surpassing pre-pandemic levels by 11.3%, with international travel spend growing by US$113 billion compared to 2020, reaching nearly US$155 billion, slightly below (14%) 2019 levels. Employment in the sector could also surpass pre-pandemic levels, reaching nearly 16.8 million jobs, above pre-pandemic levels by almost 200,000 jobs. New research by ForwardKeys has also revealed inbound bookings to the U.S. over Easter have increased by 212% compared to the same period last year. Similarly, the data shows international inbound bookings to U.S. destinations during the busy Easter period have surged 130%, compared to 2021 levels. Robust U.S. travel bookings could continue through the summer, according to ForwardKeys, with a 58% year-on-year increase in U.S. travel bookings already this year. Summer inbound international bookings will be similarly strong, increasing 87% year on year.

The Scottsdale Resort at McCormick Ranch

Driftwood Capital acquires Scottsdale Resort: Coral Gables, Florida-based Driftwood Capital announced its largest acquisition to date — the 326-key The Scottsdale Resort at McCormick Ranch in Scottsdale, Arizona. Spread across 16 acres, the resort features 90,000 square feet of indoor-outdoor meeting and event space. Driftwood will complete a multimillion-dollar renovation and convert into a Curio Collection by Hilton property upon its completion. As part of the renovation, all guest-facing areas of the hotel will be transformed and add new food and beverage concepts, a new and bigger spa and fitness center, and a complete overhaul of the resort-style pool. Accredited investors will be able to invest in the property through Driftwood’s DealDirect investment platform from Q2 2022. Renovations will begin from the first half of the year and will be overseen by Driftwood Hospitality Management, the company’s management division.

US weekly occupancy drops 50%: Weekly hotel occupancy in the U.S. plunged 50% for the first time in more than a month, but the index to 2019 fell from the previous week, according to STR’s latest data through February 5.

  • Occupancy: 50.4% (-15.8%)
  • ADR: US$125.06 (-1.2%)
  • RevPAR: US$63.05 (-16.8%)

Although none of the top 25 markets registered an occupancy rise over 2019, Norfolk/Virginia Beach came closest to its pre-pandemic comparable (-0.6% to 47.3%). San Francisco/San Mateo saw the highest drop in occupancy from 2019 (-52.1% to 38.4%), while Miami recorded the highest increase in ADR over 2019 (+16.6% to US$285.03). The steepest RevPAR deficits were in San Francisco/San Mateo (-71.3% to US$58.98) and Washington, D.C. (-48.3% to US$43.58).

London recovery outlook: London’s hotel market is projected to return to its pre-pandemic performance level but is not likely to return to growth before 2024-25, concluded the 15th hotel webinar organized by HVS, Bird & Bird, EP Business in Hospitality and AlixPartners. Around 38% of the webinar attendees said they do not expect hotel RevPAR to reach 2019 level until 2023, while 19% said it will recover only after 2024. Almost half of the attendees said an important post-pandemic feature of London hotels would be a hybrid space, offering both rooms and F&B along with workspace. Around 22% of business travelers said corporate restrictions on travel budgets will be the biggest challenge for London hotels. Around 36% felt travel was no longer a requirement to have business meetings thanks to the easy availability of online meeting platforms like Zoom.

New York ad campaign returning: New York Governor Kathy Hochul announced the launch of the new global I LOVE NY advertising campaign as part of her “Bring Back Tourism, Bring Back Jobs” initiative. Part of a US$450 million multi-faceted relief package to revitalize the state’s tourism industry, the global ad campaign initiative encourages people to discover something new in New York City. It will be seen on broadcast TV in domestic markets and key international feeder markets targeting potential visitors in a separate digital campaign airing in Australia, Canada, France, Germany, Italy and the United Kingdom. As travelers navigate the new website, they will find a wide selection of family-friendly hotels, cabins and wellness resorts throughout the state.

Record highs in Asia Pac projects in early planning stage: Project counts in Asia Pacific’s construction pipeline, barring China, rose 5%, while room counts increased by 8% YOY at the end of Q4 2021, according to Lodging Econometrics. Projects under construction stand at 899 projects with 207,693 rooms, while projects scheduled to start construction in the next 12 months closed the year at 380 projects/77,574 rooms. Project and room counts in the early planning stage are at all-time high with 535 projects/111,822 rooms. Projects scheduled to start in the next 12 months fell  3% YOY and are unchanged by rooms YOY. Projects and room counts in the under construction and early planning stages are up YOY. While the region’s recovery timeline to return to 2019 levels of new hotel pipeline projects and rooms are still uncertain, there were several metrics in pipeline metrics in this quarter which were a promising step towards recovery. Countries with the highest pipeline (excluding China) were Indonesia (with 304 projects/48,175 rooms), India (277 projects/37,876 rooms), Vietnam (210 projects/80,796 rooms), Thailand, at an all-time high (166 projects/39,315 rooms) and Australia (150 projects/28,659 rooms). The top franchise companies are Marriott International with 267 projects/57,734 rooms, Accor with 221 projects/46,655 rooms, IHG with 140 projects/30,721 rooms, Hilton with 93 projects/21,886 rooms and Hyatt Hotels Corp. with 78 projects/15,529 rooms. These five companies account for 44% of the rooms in the region’s total construction pipeline.