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Skift Take
Hotel room rates in the U.S. have never been so high. Plus, India and Australia forecast booming growth and other news in hotel deals and development.
Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.
Sunday, August 21
According to Bloomberg, the Abu Dhabi Investment Authority is exploring options, including a possible sale of the Miami Beach Edition hotel. The article said the property could fetch more than $580 million. ADIA is working with an adviser to solicit interest from potential buyers. ADIA’s Miami Beach hotel has 294 rooms and suites, oceanfront bungalows and restaurants.
Earlier this year, AWH Partners purchased the Leta Hotel in Santa Barbara, CA, with Spire Hospitality as the new management company. The charming beach chic hotel is now a Tapestry Collection by Hilton hotel featuring 158 guestrooms and 6,000 square feet of meeting space.
Skift Note: It’s been a hot hot hot year for selling hotels. But interest rate rises are causing a mismatch between buyer and seller expectations. So the second half of the year may see sales flatline or cool.
Monday, August 22
According to July 2022 data from STR, the U.S. hotel industry reported record-high monthly room rates on a nominal basis. Data from July 2022 (percentage change from June 2019) includes: Occupancy: 69.6% (-5.45); ADR: $159.08 (+17.5%); and RevPAR: $110.73 (+11.2%). The US also reported all-time high RevPAR levels, while occupancy was the second highest since August. Among the Top 25 markets, Oahu Island experienced the highest occupancy level (86.3%). Markets with the lowest occupancy for the month included New Orleans (57.2%) and Phoenix (57.3%). San Francisco reported the steepest decline in occupancy when compared with 2019 (-16.2%).
Real Commercial said Sydney hotel occupancies are beginning to slip, but hoteliers are still charging higher room rates. The average occupancy rate for Sydney hotels in June was 67.4% but dropped down to 65.8% in June. Now there are plenty of additional rooms being added to the market with hotel openings such as Kimpton Margot and the new Ace hotel. ADR in July was $239.96 with RevPAR at $157.80 (prices in Australian dollars). The 2019 comp was $197.41/$154.71. Occupancy was -16.1% lower than July 2019. When anyone gets concerned about Asia Pacific occupancy rates, remember the hole in the market not having the Chinese customer. This article also suggested the domestic tourism market is starting to peter out. JLL Hotels said the softening of occupancy rates was due to increased Covid numbers and flu cases and the postponement of conferences and events. See more Australia hotel numbers in this AFR piece.
A boutique hotel is being proposed for the corner of Fifth and Colorado in Santa Monica, CA. The city’s architectural review board reviewed the proposal for a hotel that would be eight stories high with 74 guest rooms, a ground floor restaurant, outdoor seating area, lobby, guest drop-off area, rooftop bar, and two subterranean levels with a fitness area and business center.
Skift Note: July wasn’t a fluke. STR said U.S. revenue per available room, a key industry metric, for the week ended August 20 was up 12 percent when compared with the week in 2019. See STR President Amanda Hite speak at Skift Global Forum in New York in September.
Tuesday, August 23
Flag Luxury Group, developer of The Ritz-Carlton Residences, New York, NoMad, announced that 50% of the property’s Residences sold before the hotel even opened and for record-setting prices. The hotel opened last week and includes three dining destinations, a Ritz-Carlton Spa and Fitness Center, and business meeting spaces including a vast outdoor terrace.
Charlestowne Hotels announced the addition of Hotel One75 to its growing collection of university properties. The newly refurbished hotel, located one mile from Colgate University, offers 93 rooms making it the largest lodging venue in the Village of Hamilton, NY. The property features banquet rooms and an outdoor courtyard with a fire pit and lawn games. Hotel One75 is Charlestowne’s eleventh hotel in a university market.
Skift Note: Graduate Hotels isn’t the only company training its sights on the university market for hotel development. Charlestowne Hotels, Study Hotels, The Student Hotel, and others are eying the market.
Wednesday, August 24
Hotelivate said Tier-III cities with resort locations in India have seen the strongest recovery amid a rebound in leisure tourism. This has allowed these locations to command average rates higher than what they originally achieved before the pandemic. Hotelivate’s 2022 Indian Hospitality Trends and Opportunities report said the resurgence of hotel demand in the June quarter has been exceptional, and the companies have exceeded their pre-pandemic performance. India has some 150,000 branded hotel rooms, with July and August clocking some of the best performances hotel businesses have seen across several markets. The survey was down on 1,364 hotels covering 152,000 rooms across 238 cities and 174 brands. Leisure locations continue to outperform urban markets, but city hotels have seen an upswing in demand. The return of international travel is expected to help further benefit the industry in the months ahead. Average rates of five-star hotels in India are still below their peak. The report suggests Indian Hotels continues to be the number one brand, with Marriott ranking second. India expects to add about 59,238 rooms between 2022 and 2027, with 6.4% being luxury developments and 27.5% upscale hotels. Bengaluru will get the most number of new rooms at 20,824 followed by Goa, a distant second at 11,054.
Skift Note: India looks set for a remarkable hotel boom. The bidding war for Delhi’s The Ashoka Hotel underscores the point.
Thursday, August 25
The Wall Street Journal had an interesting take on using your phone as a digital key. The article gave some humorous issues that pop up like people who forget their phone, either at home before going there, or in their rooms or cars when they are there. Then they brought up the point that unlike boarding passes, a room key is used a lot more, estimated in a study by Hyatt Hotels as 15 to 20 times a stay. That leaves a lot of times things can go wrong. Things like this are slowing adoption by travelers, and the cost to install the lock systems is also keeping things in check. The article interviewed people on this topic with one traveling nurse/consultant saying she always uses mobile boarding passes on flights but has sworn off digital keys in hotel apps because there were too many issues and were inconvenient. We are in a digital age — and eventually it is very profitable for the hotel to have this. So it is just a matter of time. But for right now, plastic keys will still be around.
Skift Note: It is remarkable how many tech vendors tout the simplicity of digital hotel keys when, in practice, there can still be a lot of friction and failure.
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