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 release pipeline data
United States: There are 3,183 hotels totaling 383,527 rooms under contract in the U.S., according to the June 2014 STR Pipeline Report. This represents an 11.6% increase in the number of rooms under contract compared with June 2013 and a 39.1% increase in rooms under construction. STR is the parent company of Hotel News Now.
Canada: Canada’s hotel development pipeline comprises 227 projects totaling 24,262 rooms, according to the June 2014 STR Pipeline Report. This represents a 3.4% decrease in the number of rooms under contract compared with June 2013.
Caribbean/Mexico: The Caribbean/Mexico hotel development pipeline comprises 163 hotels totaling 27,690 rooms, according to the June 2014 STR Construction Pipeline Report.
Central/South America: The Central/South America hotel development pipeline comprises 400 hotels totaling 65,479 rooms, according to the June 2014 STR Global Construction Pipeline Report.
San Francisco still booming
Look out, New York. And move over, Hawaii. San Francisco might well be on its way to performance supremacy atop the U.S. hotel industry, sources told HNN’s Patrick Mayock.
Posting annual double-digit increases in revenue per available room since 2011, according to STR, hotels in the City by the Bay show no signs of slowing down.
“We’re in an extraordinary boom market,” said Rick Swig of San Francisco-based hotel advisory RSBA & Associates. “The obvious driver is the tech sector. That’s driven by social media and it’s driven by the whole digital retail sector. We are headquartered in the immediate area or in San Francisco to Twitter, Facebook, Yahoo and Google.”
Dark days ahead for Atlantic City?
Struggling with a long-term decline in visitation and casino closures and bankruptcies, it looks like Atlantic City’s future is about to go bust, according to a blog from HNN’s Shawn A. Turner.
In addition, Bloomberg reported 14 July that another casino hotel in Atlantic City, New Jersey, the Trump Plaza, might close in September. If it happens, the closure would be the third property in the city to close this year. The Atlantic Club casino closed in January, and last month Caesars Entertainment announced it would shutter its Showboat property on 31 August.
The owners of Revel, a $2.4-billion casino hotel, filed for bankruptcy twice in the two years it has been open and are reportedly looking for a buyer.
Two takes on Hawaii hotel performance
Following 12 consecutive months of occupancy decreases and a corresponding deceleration in demand growth, STR’s Jan D. Freitag dug into Hawaii’s hotel performance data to examine if the negative trends can be reversed.
Year to date through May, revenue per available room increased 4.6%, driven by an average-daily-rate increase of 5.8%. The ADR increase masked an occupancy decline of 1.2%, which is a continuation of a decline in occupancy for 12 consecutive months, according to STR.
Despite Hawaii’s softening demand growth and strain on ADR, according to the analysis, hoteliers remain upbeat about the Hawaii market, according to a report from HNN’s Ed Watkins.
Infographic: US hotel rooms revenue
According to year-end 2013 data provided by STR and The Week, New York topped the list of both the top U.S. gross domestic product-producing markets and the top rooms revenue markets, according to an infographic illustrated by HNN’s Dana Shelton.
The infographic goes on to highlight by market and by state, in addition to highlighting total U.S. rooms revenue for comparison. All data was compiled and analyzed by STR’s Jan D. Freitag with the help of STR Analytics’ Ali Hoyt.
DC hotels rebound from sequestration
The Washington, D.C., hotel market has rebounded from the downturn resulting from sequestration and federal government cutbacks in 2012 and 2013, according to a study from the Philadelphia office of HVS. Strong leisure and convention business has helped the city’s hotels improve market performance.
More than 17 million domestic visitors came to the city last year, up 3.6%. Visitor spending was up 7.6% domestically and 8% by international visitors. Bookings at the Walter E. Washington Convention Center are rising, spurred by the recent opening of the 1,775-room Marriott Marquis headquarters convention hotel.
According to the report, RevPAR in 2013 was $160, a new peak for the city, with additional growth expected this year.
Brand USA reauthorization takes key step
The Travel Promotion Act took a crucial step forward toward the reauthorization of Brand USA through 2020. The act, which was passed by the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade on a unanimous 22-0 vote, now moves to the full Energy and Commerce Committee, where a vote could come as early as next week.
Brand USA is the public-private entity created to promote the U.S. and attract and welcome international tourists. In 2012, international visitors contributed $180.7 billion in travel spending, supporting 14.6 million jobs in all 50 states. One year later, Brand USA’s efforts resulted in:
- 1.1 million additional visitors to the U.S.;
- $3.4 billion on travel and purchases;
- $7.4 billion in total sales;
- 53,000 new U.S. jobs; and
- $1 billion in total sales tax revenue
Hilton plans eight Hampton hotels in Latin America
Hilton Worldwide Holdings announced it will open eight Hampton by Hilton properties in Latin America, four in Peru and four in Chile. According to a news release, this is the brand’s biggest development push in Latin America in recent years and is the first part of what could eventually be 60 new Hilton properties in the region.
The partnership with Colombia-based Metro Hotels will open the first of these properties in 2018 in Lima, Peru, and Santiago, Chile.
Sunstone REIT acquires Maui Marriott for $328m
Sunstone Hotel Investors will purchase the 544-room Wailea Beach Marriott Resort & Spa in Maui, Hawaii, for $325.7 million. Seller was an affiliate of Blackstone Real Estate Partners IV.
The purchase price represents a 16.9 times multiple on 2014 forecasted earnings before interest, taxes, depreciation and amortization of $19.3 million and a 5.2% capitalization rate on 2014 forecasted net operating income.
Sunstone said it will issue $60 million in common stock directly to the seller as part of the acquisition. In a news release, Sunstone said it expects to receive operational support from Marriott International, which manages the hotel, during a planned renovation in 2015 and 2016.
Compiled by Samantha Worgull.