Latest news: KSL-Hersha financing details; AHLA supports "junk fee" bills; IHG adds in Turkey

KSL-Hersha financing details. R.W. Baird’s Michael Bellisario wrote on Sunday night that KSL Capital Partners VI obtained a $940 million CMBS debt package to finance the Hersha Hospitality Trust take-private transaction. The $736 million first mortgage loan bears interest at SOFR+3.668%, but KSL purchased an in-the-money interest rate cap (3.90% strike rate) to buy-down the all-in rate. The debt package also includes a $204 million mezzanine loan and $47 million of Hersha management rollover equity. The financing is secured by 19 hotels (3,102 rooms; four properties plus JV assets are excluded), and the total capital stack is approximately $1.36 billion ($439,400/key). Wells Fargo and Citigroup provided $736 million of first mortgage financing (they had provided a $1.05 billion debt commitment). The two-year floating-rate loan has three one-year extension options, is interest-only for the full term, and bears interest at SOFR+3.668% (9.00% cost; the current 30-day SOFR rate is 5.33%). KSL purchased an in-the-money interest rate cap with a 3.90% strike rate to buy-down the all-in rate to 7.57%. The cap should result in more than $21 million of savings over the two-year term.

AHLA supports “junk fee” bills. AHLA and its President and CEO Chip Rogers on Friday came out in support of the No Hidden FEES Act, introduced in the U.S. House of Representatives by Reps. Young Kim, R-Calif., and Kathy Castor, D-Fla. Rogers said the act creates a single standard for mandatory fee display across the lodging industry – from short-term rental platforms to online travel agencies, search engines, metasearch sites, and hotels.” AHLA’s most recent data shows only 6% of hotels nationwide charge a mandatory resort/destination/amenity fee, at an average of $26 per night. AHLA also supports The Hotel Fees Transparency Act – similar legislation introduced in the Senate.

IHG adding 6 in Turkey. IHG Hotels & Resorts has announced the addition of six properties spanning six Turkish cities to add to its 30 open hotels in Türkiye and a further nine in the development pipeline. IHG’s first hotel in Mersin city, Holiday Inn Mersin has been signed with ownership group Koknar Turizm San. ve Tic. LTD Sti., offering 95 guest rooms. The hotel will be part of a new financial development in the city and is expected to open in late 2026. Expected to open in Istanbul in late 2025, Holiday Inn Express Istanbul Arnavutkoy will offer 64 guest rooms close to Istanbul International Airport. The deal was signed with ownership group Firatim Insaat Gayrimenkul San. Ve Tic. Ltd. Sti. IHG’s first resort in the country, Holiday Inn Resort Bodrum opened in summer 2023, bringing 266 guest rooms to Bodrum Bardakci Bay. IHG’s first hotel in Yalova, the 106-room Crowne Plaza Yalova was signed with Marti Termal Turizm Insaat Sanayi and will open in spring 2024. Crowne Plaza Kayseri, signed with Huma Saglik Hizmetleri A.S., will open in Q2 2024 offering 186 guest rooms. And signed earlier this year, the 231-key InterContinental Bursa hotel will bring a luxury hotel to the country’s fourth largest city. Being developed in partnership with owner Atis Yapi, the hotel is expected to open in early 2025.

LARC 2024 forecast. Lodging Analytics Research & Consulting (LARC) has released its latest quarterly Market Intelligence Reports for 61 U.S. markets. Data at the end of 3Q23 shows U.S. RevPAR is expected to increase by 5.5% to $98.51 in 2023, resulting in an annual RevPAR that is 14% above 2019 levels. LARC anticipates ADR to rise by 4.4% this year to $155.88, or 19% above 2019 levels, while occupancy will increase 1% to 63.2%. For 2024, LARC expects RevPAR to increase 3.6%, driven by a 2.8% increase in ADR and a 0.8% increase in occupancy. LARC forecasts 2023 hotel EBITDA to grow 5% and hotel values to increase 3%. For 2024, LARC projects U.S. hotel EBITDA to increase 1% and hotel values to increase 6% as the outlook for cap rates trends downward.

W coming to Singapore. Marriott International has signed an agreement with Malaysia’s IOI Properties Group to develop the 350-room W Singapore – Marina View in downtown Singapore, with a projected opening date of late 2028. The hotel is slated to debut at the site of a 51-story mixed-use development, which will include the luxury Marina View Residences. Construction of the development is expected to begin by the end of 2023. The project is anticipated to be led by Architects 61, with interiors by Hachem Design.

Pearle Hospitality named for Falls project. Niagara Parks in Niagara Falls, Ontario, Canada, has announced that Pearle Hospitality, Ancaster, Ontario, has won the bid to lead the transitional private sector investment of over $200 million to restore the abandon Toronto Power Generating Station, a National Historic Site that has been dormant since 1974 that will include a new boutique hotel. The redevelopment project will be funded by private sector investment and Niagara Parks predicts groundbreaking in 2024. A letter of intent between Niagara Falls and Pearle Hospitality has been signed to mark the beginning of a 120-day due diligence process. Overlooking the iconic Canadian Horseshoe Falls, the project will include several indoor and outdoor viewing areas, a museum and public art gallery, a theatre, several culinary options, a craft brewery and event and programming space.

Vail adds in Switzerland. Vail Resorts has reached an agreement to acquire a controlling interest in Swiss ski resort Crans-Montana Mountain. Crans-Montana would become Vail's second ski resort in Switzerland and in Europe, joining Andermatt-Sedrun, which it acquired last year. The ski area would be Vail's 38th globally. Closing is expected during this ski season. Vail said that Crans-Montana has been valuated at $138.5 million. It intends to purchase an 84% stake in Crans-Montana from Remontées Mécaniques Crans Montana Aminona SA, which controls the resort's lifts as well as four rental and retail locations. Vail has also contracted to purchase an 80% stake in the resort's ski schools and to take full ownership of 11 restaurants on or near the mountain. Vail said it will invest $34 million in Crans-Montana capital projects over the next five years, with a focus on snowmaking.

IHG grows in Chennai. IHG Hotels & Resorts has signed a management agreement with Abu Estate Private Ltd. to open Holiday Inn Chennai Egmore in India. Set to open in 1Q25, the 92-keys conversion hotel is in an upcoming industrial area with proximity to government offices, high-end residential complexes, railway station and landmark buildings. IHG currently has 45 hotels operating across five brands in India and a pipeline of 45 hotels due to open in the next three to five years.

Accor grows in Georgia. Accor has signed a cooperation agreement with Mardi Holding, one of Georgia’s largest development companies, to open a Handwritten Collection hotel on the Black Sea coast in Batumi, Georgia in 2026. Handwritten Collection in Batumi will occupy a new building on 80,000 square meters and offer 197 rooms and suites. Batumi is the second largest city in Georgia and a big marine port located on the coast of the Black Sea.