NEW YORK—The 36th annual New York University International Hospitality Industry Investment Conference was abuzz with news of brand launches, new prototypes and prognostication of prosperous times ahead. Below is a rundown of some of the headlines and press releases coming out of the conference.
(For more in-depth coverage of panels, keynotes and one-on-one interviews, read Hotel News Now’s on-the-scene coverage.)
Hilton announces new brand Curio
Hilton Worldwide Holdings launched Curio – A Collection by Hilton, including plans for the first hotels to join the new brand. Designed to appeal to travelers who seek local discovery and authentic experiences, Curio will be a carefully selected, global collection of distinctive 4- to 5-star hotels. Just as the word “curio” can refer to something of interest, unique or even rare, each Curio hotel will be different from the next. Letters of intent have been signed for the following properties: SLS Las Vegas Hotel & Casino; The Sam Houston Hotel; Hotel Alex Johnson in Rapid City, South Dakota; The Franklin Hotel in Chapel Hill, North Carolina; and a soon to be named hotel development in downtown Portland, Oregon.
La Quinta introduces new prototype
La Quinta Holdings, owner, operator and franchisor of La Quinta Inn & Suites and La Quinta Inn branded hotels, on Tuesday introduced a new prototype design called Del Sol. Some features that have been incorporated into the new Del Sol design include:
- scalable building design;
- guestroom mix to include at least 20% suites;
- spacious “great room” with large windows and community seating;
- pod-style front-desk counters to create enhanced check-in experience;
- conference/meeting facility designed to accommodate 40-plus attendees;
- swimming pools and hot tub with indoor or outdoor options; and
- guest laundry facility with full-size washers and dryers.
US hotels poised for further growth
The U.S. hotel industry is expected to continue to report performance increases in the remainder of 2014 and in 2015, according to STR and Tourism Economics’ most recent forecast.
During 2014, the U.S. hotel industry is predicted to report a 1.4% increase in occupancy to 63.1%, a 4.2% rise in average daily rate to $115 and a 5.7% gain in revenue per available room to $72.55. In 2014, demand in the U.S. is forecasted to increase 2.6%, while supply is predicted to grow by 1.2%. During 2015, STR and Tourism Economics predict occupancy to rise 0.6% to 63.5%, ADR to increase 4.3% to $119.93 and RevPAR to grow 4.9% to $76.13. Demand is expected to increase 2.2%, and supply is predicted to increase 1.6% in 2015.
Occupancy to surpass prior peak
The U.S. hotel industry will achieve an occupancy level of 63.6% in 2014, topping the pre-recession peak of 63.1% reported by STR in 2006, according to the June 2014 edition of PKF Hospitality Research’s “Hotel horizons” forecast report. Given this favorable balance between supply and demand, R. Mark Woodworth, president of PKF-HR, predicts hotel owners and operators will begin to see real (inflation-adjusted) recoveries in ADRs and net operating income.
Transaction volumes to reach $25b in 2014
The U.S. sector is on track to reach $25 billion in transaction volumes during 2014, according to JLL’s Hotels & Hospitality division. More than $8 billion in transactions already has been tallied thus far. Driving the forward momentum is an abundance of equity capital led by private equity, real estate investment trusts and off-shore capital, which together have accounted for nearly 60% of transaction volume. Strong debt markets, including the reemergence of floating-rate commercial-mortgage-backed-securities financing, also is a contributing factor.
Resort investment revived
The resorts sector was hit hard by the downturn as the demand fundamentals for two of its largest guest segments—leisure travelers and group business—took longer to recover, according to JLL’s Hotels & Hospitality division. However, resorts are proving worth the wait as sales transactions for the asset class reached $2 billion during the first five months of 2014. Recent high-profile resort transactions include The St. Regis Bal Harbour Resort in Miami, which sold for $213 million in January 2014; the Ritz-Carlton Kapalua, which sold for $142 million in February 2014; and the Parrot Key Resort in Key West, which sold for $100 million in May 2014.
Living wage impact by the numbers
Implementation of Los Angeles’ $15.37 wage for hotel workers could have dire consequences on the market’s workforce, according to “Extreme wage initiatives and the hotel industry: Impact on local communities and the nation,” which was conducted by John W. O’Neill, director of the school of hospitality management at The Pennsylvania State University. The report finds that the wage increase could result in:
- a total job loss of 1,394 hotel staff positions;
- a loss of $106.1 million in annual guestroom revenue;
- $16.4 million in lost hotel occupancy taxes;
- $2.9 million in lower corporate taxes; and
- a loss of $20.1 million in hotel values.
Marriott accelerates luxury and lifestyle growth
Marriott International plans to significantly grow its global portfolio of luxury and lifestyle brands. Accounting for nearly 25% of the company’s system-wide pipeline, Marriott expects to add more than 200 luxury and lifestyle hotel projects over the next several years, reflecting more than $15 billion of investment by the company’s owners and franchisees. The company’s luxury and lifestyle portfolio comprises the following brands: Ritz-Carlton, JW Marriott Hotels & Resorts, Autograph Collection, Renaissance Hotels, AC Hotels by Marriott and Moxy Hotels.
AH&LA gets a new look
The American Hotel & Lodging Association launched a new graphic look to better reflect its new dynamism and focus. The change is a timely illustration of the association’s new operating model that immediately affords the entire industry greater representation in its advocacy efforts. The new logo reflects a new membership and advocacy model that was launched in January 2014. This is the fourth time that a new logo has been created to represent evolution in the association’s 100-plus-year history.
Compiled by Patrick Mayock.