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Skift Take
Hilton is planning to grow its presence in Greater China from nearly 20,000 rooms to 270,000, while Accor has found partners to help build more than 1,300 hotels. It’s wise for the giants to look beyond China’s current pandemic crisis and plan for future growth.
Here’s a sampling of what the Daily Lodging Report provided to its readers this past week. If you’re not a subscriber, you should be. Don’t wait. Sign up now, here.
Sunday, April 17
An article in the Bharat Express said hotels companies Hilton, Pan Pacific Hotels, and Shangri-La are accelerating Asia Pacific expansion plans. Hilton is planning to more than double its presence in Asia in the coming years, opening a record 100 hotels in the region in 2021, expanding its presence from nearly 20,000 rooms to more than 120,000 rooms at 523 hotels, including 400 in Greater China. It is aiming to open 760 new hotels in the coming years to bring the total number of rooms in the area to more than 270,000. Pan Pacific Hotels Group will add more than 4,000 rooms from 18 new and renovated properties over the next few years, adding to its existing portfolio of nearly 12,500 rooms across 39 owned and managed properties in Asia, Oceania, Europe, and North America. Shangri-La has opened four new hotels in the past six months, including three across China with a total of 1,188 rooms as well as its first hotel in Saudi Arabia. The group said it has a significant portfolio of upcoming hotel and mixed-use development projects in Australia, China, Cambodia and Japan in the coming years. CBRE said in March that hotel investment in Asia Pacific surged 46% to $12.1 billion in 2021.
Skift Note: It’s wise for hotels to bet on a post-pandemic recovery despite the current headwinds in China.
Monday, April 18
Ashford Inc. announced Remington Hotels, a wholly-owned portfolio company of Ashford, has acquired Chesapeake Hospitality. Ashford is acquiring Chesapeake for an initial consideration of $15.75 million, payable with $6.3 million in cash and $9.45 million of a new Series CHP Convertible Preferred Unit, which will pay a 7.28% annual dividend and have a $117.50 conversion price per share. Chesapeake will also have the ability to earn up to $10.26 million of additional consideration based on its base management fee contribution for the trailing 12-month periods ending March 2024 and March 2025 for a total potential consideration of $26 million.
Should Chesapeake’s performance result in the full earn-out for the seller, Ashford expects $5.3 million of EBITDA contribution for the full year 2024, representing an acquisition multiple of 4.9x EBITDA. With the completion of the acquisition, Remington now manages 121 hotels in 28 states across 25 brands, including 19 independent and boutique properties. Chris Green, the former president and CEO of Chesapeake, has been appointed divisional president of Remington Hotels.
Benchmark Pyramid announced it will acquire Provenance Hotels. The deal, expected to close in the second quarter of 2022, will add Provenance’s 12 hotels to Benchmark Pyramid’s portfolio of more than 240 properties across the U.S., Europe, and Caribbean. Once the deal closes, Provenance founder and chairman Gordon Sondland will join Benchmark Pyramid’s board of directors. The companies did not disclose the terms of the deal.
Skift Note: The Ashford acquisition expands Remington’s footprint to Midwestern markets, including Pittsburgh, Milwaukee, Detroit, and St. Louis. Benchmark’s acquisition comes just as the company has been expanding hotel acquisitions in the Pacific Northwest.
Tuesday, April 19
Ashford Inc., a real estate investment trust focusing on hospitality, announced that Jeremy Welter, its president and chief operating officer, will be leaving the company effective July 15. Mr. Welter’s position as chief operating officer of Ashford Hospitality Trust and Beaemar Hotels & Resorts will also end effective July 15.
Skift Note: Welter said on a recent investor call for Ashford: “We have more opportunities than we have access to capital right now. Now there are some things that we’re working on that could help with that.”
Wednesday, April 20
Accor, in collaboration with Ennismore, announced a long-term master franchise agreement with Country Garden’s core alliance enterprise, Funyard Hotels and Resorts, one of the top hotel and property developers in China. Accor and Ennismore will team up with Funyard to introduce the lifestyle brand, Jo&Joe to China with a commitment to open at least 1,300 of the Jo&Joe hotels, representing more than 100,000 guestrooms. Funyard will be the exclusive strategic partner of the JO&JOE brand in China. Jo&Joe is part of Ennismore, a global collection of lifestyle brands. Accor and Ennismore entered a joint venture in 2021 to create a new autonomous entity with Accor holding the majority shareholding. Jo&Joe was created to challenge conventions with each destination welcoming travelers and locals with the comforts of a hotel and the friendly atmosphere of a community gathering place
Skift Note: Accor Greater China recently surpassed 500 hotels, so the latest move is more than a doubling of its presence in the country. Initial locations of Jo&Joe in China will be announced later.
Thursday, April 21
Hotel Marcel New Haven, Tapestry Collection by Hilton, believed to be the first net-zero hotel in the U.S., is accepting reservations for May 19, 2022 and beyond. The revolutionary hotel will utilize renewable solar power sources on site to generate the electricity needed for its common areas, restaurant, laundry, meeting rooms and 165 guest rooms and suites. Developed and owned by Becker + Becker and operated by Remington Hotels, Hotel Marcel New Haven offers 7,000 square feet of meeting and event space with a penthouse courtyard, a restaurant and lounge, and 12 Tesla Superchargers or universal level-two charges for electric vehicles.
Skift Note: Investing in net-zero properties is a smart move for hoteliers.
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