The latest news about development and M&A, as well as industry data updates.
Rebounding occupancy. U.S. occupancy for the week of July 16-22 reached 72.9%, the
highest level since August 2019, according to new CoStar data. ADR hit $`6`.65
and RevPAR was up 2% over the same week in 2022, hitting $117.91. Among the Top
25 markets, New York City saw the largest year-over-year increases in occupancy
(+11.8% to 90.9%) and RevPAR (+21.2% to US$253.61)..Helped by Taylor Swift’s
Eras Tour, Seattle posted the only double-digit ADR gain (+16.0% to US$251.29)
and the second-highest RevPAR jump (+20.9% to US$222.77). The steepest RevPAR
declines were seen in Miami (-12.8% to US$130.76) and Orlando (-10.3% to
US$133.69).
IHG adds in KSA. IHG Hotels & Resorts has signed a management agreement
with Almuhaysin Group to open the first Regent Hotel in the Middle East, in
Saudi Arabia. Set to open by mid-2024 on the Red Sea waterfront in
Jeddah, the 182-room Regent Jeddah will join IHG’s 39 hotels across
five brands in Saudi Arabia with an additional 30 hotels set to open within the
next three to five years.
Extended-stay results mixed. Following two previous months in which extended-stay hotels
achieved better performance than corresponding classes of all hotels, the onset
of the summer travel season produced varying results in June, according to The
Highland Group. Economy extended-stay hotels continued to report declining
demand compared to one year ago, but the decline was far less than for all
economy class hotels. RevPAR growth for all hotels exceeded the extended-stay
hotel gain but this was due to a smaller decline in occupancy as extended-stay
hotels continued to report relatively strong growth in ADR. The 1.7% net
increase in extended-stay room supply in June is consistent with the average
over the last 12 months. June was the 21st consecutive month of 4% or less
supply growth, which is well below the long-term average. However, the economy
segment posted its strongest monthly supply gain in more than two years.
US pipeline update. At the close of the second quarter, the hotel construction
pipeline in the United States grew incrementally and stood at 5,572
projects/660,061 rooms, with projects up 7% year-over-year (YOY) and rooms up
6% YOY, according to Lodging Econometrics. At the end of Q2, the total pipeline
was only 5% from its all-time peak in terms of projects. Projects under
construction have experienced modest quarter over quarter growth over the past
year and currently stand at 1,062 projects/141,681 rooms, up 10% and 8% YOY,
respectively. Projects scheduled to start construction in the next 12 months
saw an 11% increase in projects and 12% increase in rooms YOY, to stand at
2,232 projects/260,595 rooms. Year-over-year project counts in the early
planning stage changed minimally and ended Q2 ’23 with 2,278 projects/257,785
rooms. Upscale and upper midscale new construction projects dominate the
pipeline at Q2, accounting for 62% of the projects and 57% of the rooms in the
total U.S. construction pipeline. Announced renovations and brand conversions,
combined, reached record high project counts over the last four quarters,
accounting for 1,939 projects/253,473 rooms, with upscale, upper midscale, and
economy brands accounting for the majority of these projects at the end of
2023’s second quarter. Extended-stay hotel projects have also been on the rise
in the U.S., increasing consecutively over the last eight quarters. At the Q2
close, there were 2,083 extended-stay projects, with 214,557 rooms in the U.S.
hotel construction pipeline. Extended-stay projects account for 32% of projects
under construction in the total pipeline, 42% of projects scheduled to start
construction in the next 12 months, and 36% of the projects in early planning
across the U.S.