Latest HITs: Corinthia to Maldives; McSam sells; industry's economic impact

Corinthia to Maldives. Malta-based Corinthia Hotels has signed a management agreement to operate a luxury resort on the Kaafu Atoll in the Maldives set to open in 4Q25. The developer is Maarah Pvt. Ltd., a Maldivian entity, affiliated with Maarah Holdings Ltd., a United Arab Emirates company registered within the Dubai International Financial Centre, being part of Romania’s Niro Investment Group. The resort will feature two islands with the larger of the two hosting a 73-key resort and the other being used for more exclusive gatherings. Corinthia Maldives will feature aquatic-inspired architecture designed by global firm HKS.

Bayrock buys in New York. PE firm Bayrock Capital has reportedly acquired for $76.5 million from Sam Chang’s McSam Hotel Group the 381-room Holiday Inn in Long Island City, New York. The deal is being financed by an all-cash private debt fund, according to the transaction broker. The hote was completed last year and the sale price equates to about $200,000 per key.

InterCon to Sapporo. IHG Hotels & Resorts has signed a deal with AXA Life Insurance Co. to open the 149-room InterContinental Sapporo in late 2025. It will be IHG’s fifth hotel in Hokkaido, its first luxury hotel In Sapporo and its 11th InterContinental-branded hotel in Japan. InterContinental Sapporo will debut on the upper floors (9th to 14th floors) of a new building in the AXA Sapporo Nakajima Park Project. In Japan, IHG Hotels & Resorts currently operates 44 hotels.

Brookfield markets Center Parcs. Canadian private equity firm Brookfield has put up for sale its UK-based holiday village brand Center Parcs, asking a reported £4 billion and £5 billion price. It bought the business in 2015 for about £2.4 billion. Center Parcs runs six holiday villages in the UK and Ireland which attract more than two million visitors every year. The Financial Times said that Brookfield had appointed investment bankers to sound out potential buyers, including other private equity firms. At the end of last year Center Parcs said occupancy rates were at 97.3%, and broadly in line with pre-COVID levels. Revenue of £426.6 million between April and December last year represented a 20% increase compared to the same period a year earlier, and 18% higher than before the pandemic. Center Parcs UK is a separate business from Blackstone-owned Center Parcs Europe.

Coming CMBS challenges. About 90% of commercial mortgage-backed securities (CMBS) office loans maturing in 2023 will face refinancing challenges, according to new data released by Moody’s Analytics. Commercial real estate sales volumes, lending volumes and asset values all declined in 1Q23 and are not expected to pick up so long as interest rates remain high. Approximately 84% of $7.8 billion in fixed-rate CMBS conduit loans for offices set to mature this year are likely to face difficulties when they try to be refinanced, according to Moody’s.

More resort fee challenges. The State of Texas and Marriott International have entered a voluntary agreement to prominently display all “resort fees” and to increase price transparency in its advertisements and booking process. This comes after Texas Attorney General Ken Paxton alleged that hotel companies are engaging in fraudulent and anti-competitive practices by misleading consumers in advertisements which prevents comparative shopping and charging millions of dollars in hidden fees. The state also filed a suit against Hyatt Hotels Corp. for allegedly violating Texas consumer protection laws by misleading consumers with marketing and charging hidden fees. In a petition filed in district court, Paxton said Hyatt did not include all mandatory fees in advertised room rates which thwarted comparison shopping and charged hidden fees, amounting to millions of dollars in fraudulent charges.

Industry’s economic impact. AHLA and Oxford Economics released data about the economic impact of the American hotel industry in every state and congressional district. It finds that in 2022, American hotels supported 8.3 million American jobs, which is equivalent to nearly one in 25 U.S. jobs; hotel guests spent a total of more than $691 billion on lodging, transportation, food and beverage, retail, and other expenses; for each $100 of spending on lodging, hotel guests spent another $220 during their trip; hotels paid employees more than $104 billion in wages, salaries, and other compensation and supported $463 billion in total wages, salaries, and other compensation; hotels directly generated $72.4 billion in federal, state, and local tax revenue and supported nearly $211.2 billion in total federal, state, and local tax revenue.

Star Wars hotel shuttering. Without offering a reason, Walt Disney Co. said on Thursday that it will close the Star Wars-themed hotel in Orlando this September, less than two years after it opened. Two-night bookings started at $4,800 for two guests. The 100 rooms at the site represented less than 0.5% of Disney's room inventory in the area. Disney also said that it was cancelling plans to build a nearly $1 billion corporate campus in Florida, in part due to “changing business conditions” amid a battle with Republican Gov. Ron DeSantis.

Update on Four Seasons near St. Peter’s. The Catholic Church’s Order of the Holy Sepulcher in Rome has reportedly awarded Four Seasons Hotels and Resorts a contract for a hotel very close to St. Peter’s Basilica. In a statement, the order said that on March 10, an agreement was signed with Fort Partners Group leasing the Palazzo di Domenico della Rovere in Borgo “for hotel use under the management of the Four Seasons group.” The Fort Partners Group is a privately held real estate and hospitality development firm owned by Liberian entrepreneur Nadim Ashi. Until recently, the building was occupied by the family-run Hotel Columbus, which closed prior to the COVID-19 pandemic. Once the public tender for the property was issued in 2020, Four Seasons emerged as a frontrunner with a 27-year, roughly $52.4 million contract to create a luxury hotel complete with a spa, gym, and restaurants staffed by world-renowned chefs.