Hotel News Now each week features a news roundup from a different region of the world. This week's review covers the Americas.
STR, STR Global release August pipeline data
United States: There are 3,246 hotels totaling 391,402 rooms under contract in the U.S., according to the August 2014 STR Pipeline Report. This represents a 13.5% increase in the number of rooms under contract compared with August 2013 and a 38.4% increase in rooms under construction. STR is the parent company of Hotel News Now.
Caribbean/Mexico: The Caribbean/Mexico hotel development pipeline comprises 164 hotels totaling 27,621 rooms, according to the August 2014 STR Construction Pipeline Report. This represents a 17.7% increase in rooms under contract, compared with August 2013, and a 21.9% increase in rooms under construction.
Central/South America: The Central/South America hotel development pipeline comprises 429 hotels totaling 70,560 rooms, according to the August 2014 STR Global Construction Pipeline Report. STR Global is sister company to HNN.
World Cup scored limited demand for Brazil
The 2014 FIFA World Cup had diverse results on Brazil’s hotel performance, according to a report from HNN contributor Mariano Carrizo.
The World Cup attracted more than 4 million people in total. Of those people, 75% (approximately 3 million) were Brazilian, while the remaining 1 million were international travelers, according to the Ministry of Tourism of Brazil.
US government conference spend slow to recover
U.S. government travel is finally showing signs of recovery after being sidelined by sequestration and allegations of “wasteful spending” at a General Services Administration conference during the throes of recession.
The nature of that demand has changed, however, reports HNN contributor John Buchanan. Large-scale events have withered in the shadows of the GSA scandal, leaving smaller group business to lead the charge.
There’s still a lot of ground to cover, according to an analysis from STR’s Jan Freitag and Morrie Kim, who took an in-depth look at the conference-spend data reported by government agencies. They found that from fiscal 2012 to 2013, the surveyed agencies held 503 fewer conferences, and total spending decreased by approximately $185 million.
Fibra Inn acquires 6-hotel portfolio in Mexico
Mexican real estate investment trust Fibra Inn purchased six hotels comprising 667 rooms in Mexico under two brands: Casa Grande and Microtel Inn & Suites by Wyndham, according to a company news release.
Fibra paid 431.8 million Mexican pesos ($32.9 million) for the portfolio, plus 48.8 million Mexican pesos ($3.7 million) for taxes and acquisition-related expenses. The seller was not named.
Following the acquisition, Fibra has 29 hotels comprising 4,512 rooms open, plus three properties with 799 rooms under development.
Baha Mar’s setbacks point to larger issues
The $3.5-billion Baha Mar resort complex in the Bahamas, touted since its inception as the largest single-phase project in the history of the Caribbean and originally scheduled to open in December, has run into a series of significant challenges, including a recently-announced delay in its much-anticipated debut, according to a report from HNN contributor John Buchanan.
Set on 1,000 acres along 3,000 feet of Cable Beach in Nassau, the ambitious project was primarily financed by a $2.5-billion loan from the Import-Export Bank of China, with $850 million in equity funding led by its developers, the Swiss-Bahamian Izmirlian family. It will include a 1,000-room casino hotel with a 100,000-square-foot Las Vegas-style casino, a 700-room Grand Hyatt, a 200-room Rosewood and a 300-room SLS LUX. The resort also will feature 200,000 square feet of convention facilities, a Jack Nicklaus Signature golf course, an ESPA spa, and 40 restaurants, bars and clubs.
Cleveland a ‘city of choice’ for development
Cleveland is riding high as it enjoys an infusion of more than $17 billion in capital developments, including nearly $3 billion dedicated to tourism and more than 2,000 new hotel rooms between 2013 and 2016, writes HNN contributor Laurel A. Keller.
Recent downtown Cleveland development projects such as the Horseshoe Casino, Cleveland Convention Center, Ernst & Young Tower and Global Center for Health Innovation recently have changed the city’s landscape and increased visitation.
New $9.2b airport planned for Mexico City
Mexican President Enrique Peña Nieto announced a plan to build a new $9.2-billion international airport in Mexico City, reports the Associated Press. The new facility will quadruple the capacity of the current airport.
The new airport will be built on federally owned land next to the existing facility. It will have six runways and a capacity of 120 million passengers a year.
Hawaii hotels set mid-year revenue record
Hotels in Hawaii set a mid-year revenue record of $2.7 billion, according to Hospitality Advisors. The revenue record comes despite a 0.7-percentage point decrease in occupancy. Average daily rate during the period was up 5.4% to $240.33, while revenue per available room grew by 4.4% to $185.78. RevPAR growth was in line with the 2.2% increase in per-person daily spending as reported by the Hawaii Tourism Authority.
“The first half of 2014 was quite interesting for Hawaii’s hotel industry as there were growing concerns about a possible downturn in the market going into the second quarter,” Joseph Toy, president and CEO of Hospitality Advisors, said in a news release. “The market had been trending downward since the fall of 2013 and into 2014. Part of the trend was expected as it was following a record-breaking market expansion that was fueled by substantial pent-up demand after a prolonged recession.
“As the market went into the second quarter of 2014, the Japanese market was softening due to a much weaker yen and booking windows for advanced room reservations for the North American market shortened considerably. However, the booking pace and late reservations picked up considerably in June, which appears to have carried into the rest of the summer for 2014.”
Melia bringing ME brand to the US
Melia Hotels International for the first time will bring its ME brand to the U.S. with a property in Miami.
The 129-room ME Miami is planned to open in spring 2015. Prior ME openings have taken place in Spain in Mallorca and Ibiza (summer 2014) and London (2013). Future properties are planned in Milan and Caracas, Venezuela, in 2015 and in Dubai, United Arab Emirates, in 2016.
“We are incredibly excited about the launch of ME Miami and are thrilled to begin this project in one of the most iconic cities in the United States,” Gabriel Escarrer, CEO and vice chairman of Melia, said in a news release.
Caribbean hotels see highest profits since 2008
PKF Consulting USA released the 2014 edition of its “Caribbean trends in the hotel industry” report, which stated the average Caribbean hotel enjoyed an 18.6% increase in net operating income in 2013, the third year in a row that Caribbean hotels have experienced a double-digit increase in NOI. The region also enjoyed the highest annual growth in profits achieved since 2008.
Food-and-beverage sales comprised 28.8% of revenue. At 56.8%, rooms revenue remained the largest source of income, according to the report.
“Recent increases in visitation to the region have resulted in top-line revenue growth that has overcome the high costs and resulted in strong growth in bottom-line profits,” said Scott Smith, VP of PKF’s Atlanta office.
Compiled by Samantha Worgull.