Hotel News Now each week features a news roundup from a different region of the world. Today’s review covers the Americas.
STR, STR Global report monthly results for May
U.S.: The U.S. hotel industry’s occupancy rose 1.1% to 64%, its average daily rate was up 3.6% to $109.86 and its revenue per available room increased 4.7% to $70.34, according to data from STR, parent company of Hotel News Now.
Americas: In May, the Americas region reported a 1.2% increase in occupancy to 64%, a 3.5% rise in ADR to $111.69 and a 4.7% growth in RevPAR to $71.48, according to data from STR Global, sister company of HNN.
STR, STR Global report pipelines for May
U.S.: The total active U.S. hotel development pipeline comprises 2,687 projects totaling 324,130 rooms, according to the May 2013 STR Pipeline Report. This represents an 11.6% increase in the number of rooms in the total active pipeline compared with May 2012, and a 22.4% increase in rooms under construction.
Caribbean/Mexico: The Caribbean/Mexico hotel development pipeline comprises 128 hotels totaling 21,858 rooms, according to the May 2013 STR Construction Pipeline Report. Among the chain-scale segments, the luxury segment reported the largest portion of rooms in the total active pipeline with 31.6% and 6,901 rooms.
Central/South America: The Central/South America hotel development pipeline comprises 233 hotels totaling 37,611 rooms, according to the May 2013 STR Global Construction Pipeline Report. Among the region’s countries, Paraguay reported the largest expected supply growth (+29.7%) if all 616 rooms in the country’s total active pipeline open.
US hotel industry prospers from shale boom
Recent shale oil and drilling advancements have brought a boom to small towns across the U.S., and hotel occupancy in those areas has skyrocketed over the past decade.
Vantage Hospitality Group, parent company of America’s Best Value Inn, has broken ground on five ABVIs near Texas shale deposits—in Pearsall, Cuero, Dilley, Midland and Cotulla—since 1 January. Sky Hospitality, a hotel management company based in St. Petersburg, Florida, operates Microtel Inn & Suites in Dickinson, North Dakota; Lewiston, North Dakota; Minot, North Dakota; Buckhannon, West Virginia; and Morgantown, West Virginia—all areas that are experiencing shale booms as well.
Pipeline dive: What’s being built in the US?
HNN’s Jason Q. Freed took a deep dive into the U.S. hotel industry’s pipeline to provide an extensive look at who’s building what and where.
The number of hotels in STR’s total active pipeline as of May was 2,687, which is up 11.6% compared with the same time last year. However, the number that stands out most—and is the cause for alarm for some supply and demand trackers—is the fact that the number of hotel rooms under construction in the United States is up 22.4% compared with the same time last year.
Hyatt Place to debut in Brazil
Hyatt Hotels Corporation announced the execution of an agreement to form a joint venture between a Hyatt affiliate and FSA Group S.A., a Libra Group company, to develop and own nine Hyatt Place-branded hotels in Brazil.
The total investment from Hyatt and FSA for the development is expected to be approximately $270 million.
New investment vehicles in Mexico
New financial vehicles available to hotel investors in Mexico, called Fideicomiso de Inversión en Bienes Raíces, or FIBRAs, are putting more liquidity into the hands of property investors who now view Mexico as an increasingly favorable investment location, according to Jones Lang LaSalle’s Mexico Hotel Intelligence Report.
FIBRA Hotelera Mexicana and Fibra Inn are the country’s first two FIBRAs that focus exclusively on Mexican hotel sector investments. Both were announced in late 2012 and more FIBRAs are expected to form this year.
Jones Lang LaSalle’s report outlines additional impacts from these new vehicles on three major Mexican hotel markets, including:
- Mexico City will be the first place to see an impact from the FIBRAs.
- Cancun and the Riviera Maya have been the most active hotel transactions market in Mexico, with total transaction volumes exceeding $900 million.
- With the highest proportion of luxury hotels, Los Cabos garners the premier ADR of any Mexican resort market, causing this region to show more new supply pressures than Mexico City or Cancun/Riviera Maya.
A look at Panama City
Whitebridge Hospitality partnered with the Autoridad de Turismo Panama, the official organization responsible for the promotion of tourism in Panama, for HotelBeat report, which provides an in-depth look at what’s going on in the Panama City hotel market.
At the end of 2012, Panama City comprised around 11,200 hotel rooms—70% of total hotel room stock in Panama. Between 2011 and 2012, growth in hotel room supply in the city increased by 57%, with the capital attracting more than 90% of all hotel investment in the country. The anticipated pipeline would suggest that new supply is slowing. However, supply continues to outstrip the pace of demand despite the increase in tourist arrivals.
Four Points expands footprint in British Columbia
Starwood Hotels & Resorts Worldwide announced that its Four Points by Sheraton brand continues its expansion across Canada with the opening of Four Points by Sheraton Kelowna Airport.
It is the 24th Four Points hotel to open in Canada, where the brand is on track to reach 27 hotels by the end of 2013.
Hilton to expand in Mexico
Hilton Worldwide has signed management agreements with Solfine Investment, S de RL de CV to manage the Hampton Inn & Suites by Hilton Santa Fe in the state of Morelos, and with Consorcio Constructor e Inmobiliario Pegaso SA de CV to operate the Hilton Garden Inn Coatzacoalcos in the state of Veracruz.
Scheduled to open in the second quarter of 2015 and early 2016, respectively, the addition of these hotels serves as an example of the mid-priced brands’ continued growth in Latin America.
Fund for Caribbean investment
Asia Pacific Investment House completed its first round of funding for Resort Development Paradise Haven in St. Kitts & Nevis, raising $50 million with a total project projection of $250 million.
Paradise Haven is a 500-acre eco-friendly golf and beach resort development, which will include luxury villas, condominiums, retirement and family residences as well as a globally branded 5-star hotel. The resort will also feature a globally branded rainforest hotel and lodges, in addition to a golf hotel.
Deals and developments
- Starwood Hotels debuted its Four Points by Sheraton property in Lima, Peru, with the 134-room Four Points by Sheraton Miraflores.
- The 152-room Element Vaughan Southwest opened in Vaughan, Ontario, making it the brand’s first international hotel.
- The Courtyard by Marriott Isla Verde Beach Resort in San Juan Puerto Rico announced a $32-million renovation slated for completion by November 2013.
- Wyndham Hotel and Resorts opened its first hotel in Ecuador—the 179-room Wyndham Guayaquil.
- InterContinental Hotels Group opened its second hotel in Ecuador—the 122-room Holiday Inn Hotel Guayaquil Airport in Ecuador—a seven-story new-build hotel.
- Meliá Hotels International in 2016 will open a new Tryp by Wyndham hotel in Lima, Peru, to be located in the district of Miraflores.
Compiled by Samantha Worgull.