HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s review covers the Americas.
Americas region hits 70% occupancy
The Americas region recorded positive results in the three key performance metrics when reported in U.S. dollars for June, according to data compiled by STR and STR Global, parent and sister companies of HotelNewsNow.com, respectively.
The Americas region reported a 4.1% increase in occupancy to 70%, a 4.3% gain in average daily rate to $109.41 and an 8.6% rise in revenue per available room to $76.54.
Among the region’s key markets, Los Angeles reported the largest occupancy increase, rising 8.4% to 82.9%, followed by San Juan, Puerto Rico, with a 6.6% increase to 81.7%. Rio de Janeiro reported ADR growth of 21% to $245.43. San Francisco increased 25.5% in RevPAR to $160.05, achieving the largest increase in that metric.
In the first half of 2012, the region’s occupancy was up 3.2% to 61.1%, its ADR grew 3.9% to $107.75 and its RevPAR increased 7.2% to $65.81.
Accor buys Grupo Posadas portfolio
Accor will spend $275 million to acquire a 2,600-room Grupo Posadas portfolio in South America. The transaction, in line with the external growth strategy of Accor, includes 15 hotels (2,600 rooms) and a secured pipeline of 14 hotels (2,000 rooms).
Of the 15 hotels, four are owned hotels, four are variable leased hotels and seven are hotels under management contract. They are located in key cities as São Paulo; Rio de Janeiro; Buenos Aires, Argentina; and Santiago, Chile.
The transaction also includes a secured pipeline of 14 hotels under management contract and the acquisition of two brands operated by Grupo Posadas in South America: Ceasar Park and Ceasar Business.
With this transaction, Accor’s network in Brazil will reach 164 hotels and 26,200 rooms. In total, Accor’s portfolio in South America will consist of more than 200 hotels and approximately 34,000 rooms. Completion of the deal should occur by the end of 2012.
US hotel deals dominated by savvy buyers
The acquirers of U.S. hotels during the second quarter is a veritable Who’s Who of hotel investment.
The list of second-quarter purchasers is dominated by established buyers including: RLJ Lodging Trust, Apple REIT Ten and Pebblebrook Hotel Trust. The fact that buyers such as these are getting into the game now is a good sign for the industry, said Dan Lesser, president and CEO of LW Hospitality Advisors LLC, which recently published its list of second-quarter hotel transactions activity in the United States.
Overall during the quarter, there were 26 deals of more than $10 million that were not part of a portfolio allocation, according to LWHA’s analysis. Total dollar volume of the deals was approximately $1.1 billion and represented a price per room of approximately $207,000. The largest deal this quarter was Loews Hotels & Resorts’ $165-million buy of the 632-room Renaissance Hotel & Spa in Hollywood, California.
During the same period a year ago, there were 42 deals totaling more than $3.6 billion of transaction activity. The sales during the second quarter of 2011 averaged a price per room of $285,000.
Year to date, there have been 52 deals totaling more than $2.9 billion at an average price per room of approximately $237,000. During the same period in 2011, there were 78 deals totaling more than $6.4 billion at an average price per room of $235,000.
Tryp debuts in Panama
Wyndham Hotel Group opened its first Tryp by Wyndham hotel in the Panama, the newly constructed 92-room Tryp by Wyndham Panama Centro, located in the heart of Panama City.
The city-center hotel expands Tryp by Wyndham’s existing portfolio in Latin America, with 14 hotels located in major markets throughout Costa Rica, Argentina, Brazil, Colombia and Uruguay. It also adds to Wyndham Hotel Group’s growing presence in the region, which consists of more than 90 properties and more than 10,300 rooms in 13 countries.
Tryp by Wyndham Panama Centro, owned by Inversiones Casaldeporto S.A., is the first hotel in Central and South America to be managed by Wyndham Hotel Management, the management arm of Wyndham Hotel Group.
Tryp by Wyndham has 90 hotels and nearly 13,000 rooms across Europe and the Americas.
DiamondRock optimistic about Blackstone deal
Executives at DiamondRock Hospitality Company expect their recently acquired portfolio of four hotels from affiliates of Blackstone Group LP to outperform the general market and its own 23-hotel portfolio.
The properties should outperform the market by 2% in compound annual growth rate during the next five years, executives of the real-estate investment trust said.
“We see outsized RevPAR growth potential, food-and-beverage margin potential. We see a lot of potential both in revenue and profit growth outsized to our portfolio,” said John L. Williams, DiamondRock’s president and CEO, during a conference call to discuss second-quarter earnings.
The call afforded Williams and DiamondRock CEO Mark W. Brugger one of the first public forums to expound on the 10 July acquisition, in which the REIT reached a deal with affiliates of Blackstone Real Estate Partners VI to acquire four hotels for $495 million: the 362-room Hilton Boston; the 406-room Westin Washington, D.C.; the 436-room Westin San Diego; and the 258-room Hilton Burlington in Vermont.
Blackstone also purchased approximately 7.2 million shares of DiamondRock common stock for a cash infusion of $75 million.
Melia sells Cancun hotel, retains management
Meliá Hotels International sold the ME Cancun Hotel, located in the Mexican Caribbean, for €61.2 million ($75.4 million), generating a capital gain of approximately €26.4 million ($32.5 million).
The company will continue to operate the hotel under a management contract. The sale forms part of the progressive implementation of its business strategy, aiming to become a more asset light company with more hotels under management, optimizing the value of its brands and its management capacity.
With more than 400 rooms, the ME Cancun is one of two resorts operated by ME by Meliá brand in Mexico, together with the ME Cabo Hotel in Los Cabos, Baja California. Formerly known as the Meliá Turquesa, the ME Cancun was fully renovated in 2007 and relaunched under the company’s younger luxury brand.
No rush for deals in US
Just how fast is the transaction pace in the hotel industry? It might be more productive watching paint dry during the wave of property-improvement plans permeating the business.
Hoteliers have been patiently champing at the bit waiting for deals to materialize, but they remain optimistic even as the up-and-down commercial mortgage-backed securities market has failed to wow them.
“It’s like a very fast moving iceberg,” said Steve Van, president of Prism Hotels & Resorts. “Sixty-five percent of loans that have come due this year have not paid off, so they’re still in the pipeline. Something’s going to have to happen to them some day.”
“Our acquisitions motto is ‘make haste … slowly,’” said Bill Reynolds, senior managing director of MHR Capital, who has made a career out of being a value-add investor. “We’ve looked at 100 (hotels), and we’re buying one. Debt’s cheap, but the deals aren’t there.”
Van agreed, adding that there’s been a drought in the market for 300- to 400-room full-service hotels that need repositioned. “We see a few of those but not a lot,” he said. “Everybody says they’re looking a lot, but they’re not buying a lot.”
W Hotel to open in Bogota in 2014
W Hotels Worldwide has signed an agreement with Terranum Hotels to debut a new W Hotel in Bogota, Colombia. Slated to open in 2014, W Bogota will be a part of a larger mixed-use development, which also will include premium office space and high-end retail.
"Bogota is one of the fastest growing economic hubs in Latin America and is also renowned for its fashion, music, tremendous gastronomic options, and historical significance in the region,” said Osvaldo Librizzi, co-president of the Americas for Starwood Hotels & Resorts.
W Bogota will be designed by New York-based Studio Gaia and will feature 168 guestrooms, including 20 suites, one Extreme Wow Suite (the W brand’s interpretation of the presidential suite) and more than 12,000 square feet of function space.
Florida resort adds Westin flag
Starwood Hotels & Resorts Worldwide will manage The Westin Resort at Tarpon Point Marina in Cape Coral, Florida, which is scheduled to open in late 2012. Previously known as The Resort at Marina Village, the property first opened in 2009 and will undergo a major renovation to implement all the Westin brand services and amenities.
The hotel, owned by Freeman & Hasselwander Resort Properties, will feature 262 guestrooms and suites, meeting space and several dining outlets.
Cobblestone building on success
Cobblestone Hotels broke ground on the company’s fourth new-build property in North Dakota this year.
Experiencing significant growth since it opened its first property in January 2008, Cobblestone Hotels has doubled its number of properties in 2012 alone. The group has completed four conversions since January and will have nine new-builds complete by year-end. The new Cobblestone Inn and Suites in Harvey, North Dakota, is expected to open in the first quarter of 2013.
The hotel is owned by Harvey Hotel Group and will feature 36 rooms.
Hyatt will manage St. Kitts property
Hyatt Hotels Corporation has signed a management agreement with Range Developments for a Park Hyatt hotel in St. Kitts in the West Indies.
Slated to open in 2015, Park Hyatt St. Kitts will be located on the southeast peninsula of St. Kitts in Christophe Harbour, a 2,500-acre master planned community that is under development. Park Hyatt St. Kitts will feature 200 guestrooms and 50 Park Hyatt-branded residential condominiums, and the hotel will be constructed in two phases. The first phase will include the completion of the hotel’s 125 guestrooms, two food-and-beverage outlets, a fitness center, a 12-treatment room spa, and more than 7,000 square feet of meeting and banquet space. The second phase will include the completion of the remaining 75 guestrooms and a third F&B outlet. Dewan Architects is responsible for the hotel’s architecture.
There are three Hyatt-branded hotels in the Caribbean, including Hyatt Regency Trinidad, Hyatt Regency Aruba Resort and Casino and Hyatt Regency Curacao Golf Resort, Spa and Marina. There are four Hyatt-branded hotels under development in the Caribbean, including Park Hyatt Bermuda, Andaz Turks and Caicos, Grand Hyatt Baha Mar, and Hyatt Place Bayamón and El Tropical Casino.
Key transactions, openings
• Pebblebrook Hotel Trust acquired the 124-room Hotel Vintage Park in Seattle for $262,097 per room.
• Carey Watermark Investors acquired the 173-room Lake Arrowhead Resort & Spa in Lake Arrowhead, California, for $26.5 million.
• The 222-room Embassy Suites–Anaheim-North was acquired by Urban Common from FelCor Lodging Trust for $25.5 million.
• The 366-room The Pod 39, opened in New York.
• The 142-room Hotel Indigo Atlanta Airport College Park opened.
• The 81-room Best Western Plus Airport Inn & Suites in Salt Lake City opened.
Compiled by Jason Q. Freed.