Latest news: Hyatt Studios update; JLL Asia Pac deal data; first MOD opens

First Hyatt Studios shovels. Hyatt Hotels Corp. and franchisee 3H Group Inc. have broken ground on the first Hyatt Studios extended-stay property, set to open in Mobile, Alabama. The Hyatt Studios Mobile/Tillman’s Corner/West I10 is expected to open in early 2025. At the same time, Hyatt announced a newly executed deal with Giri Hotel Management – a hotel group that operates more than 50 hotels in New England – for a 122-room Hyatt Studios hotel at Portland International Jetport in Portland, Maine, slated to open in 2025. Hyatt previously announced a deal with Presidio Hotel Development for a 113-room Hyatt Studios hotel in downtown Marysville, California, expected to open in 2025.

JLL Asia Pac deal data. China, Japan and South Korea are dominating hotel dealmaking in Asia Pacific, according to new JLL data. The three countries collectively accounted for 86% of hotel investment activity in the region in the third quarter. “China and Japan have consistently been the most liquid markets due to their sheer scale and extensive market activity,” said Nihat Ercan, CEO, APAC, JLL Hotels & Hospitality Group. “But a myriad of factors such as the return of tourism, affordable debt financing — particularly in Japan, and a rise in distressed opportunities in China are further fueling deal volumes.” In Japan, investor appeal has surged, driven by factors including the weak yen and favorable financing conditions compared to other regional destinations. One notable transaction is the $460 million sale of the Hyatt Regency Tokyo to investment funds KKR and Gaw Capital Partners in March, which remains the top single asset transaction in APAC this year. Investment volumes in APAC hit $5.9 billion in the first nine months this year, down 40% from the same period last year, according to JLL. This accounted for nearly one-fifth of global hotel investment volumes. While APAC hotel investment volumes for this year are projected to fall 14% from 2022, the sector is on track to grow 3% to reach $10.4 billion in 2024, according to JLL.

Hilton adds in Mexico. Hilton will debut the Tapestry Collection by Hilton brand in Baja California, Mexico, with the signing of two franchise agreements. The 90-room Perla La Paz, Tapestry Collection by Hilton in La Paz and the 70-room Tropicana Los Cabos, Tapestry Collection by Hilton in San Jose del Cabo are expected to join the Hilton portfolio in early 2024. The brand has 90 hotels open and approximately 30 properties in the development pipeline. The names of the developers were not disclosed by Hilton. Onirius Hospitality Advisors served as the principal advisor for both properties.

New challenge for LA developers. The Los Angeles City Council reportedly approved a draft ordinance that would require hotel developers to replace any permanent housing lost in the process. The ordinance was co-authored by the Unite Here Local 11 hospitality workers union and representatives of the hotel industry. It’s intended to replace a ballot initiative sponsored by the labor union, which was set to appear on the March 2024 ballot. There’s growing opposition to the ordinance from motel owners — and from homeowners who use their homes for short-term rentals. The proposed ordinance would also introduce provisions to bolster public oversight over short-term rentals, hotels and other properties, and increase the supply of interim housing available to the city. Hotel developments would be required to obtain a permit from the Department of City Planning. In addition, hotels, short-term rentals and motel owners would be required to obtain a police permit for operation.

Radisson in Nigeria. Radisson Hotel Group, in partnership with the Edo State Government, have signed a deal to develop the 169-room Radisson Hotel Benin City in Nigeria. The hotel, scheduled to open within the next 12 months is Radisson’s 12th hotel in Nigeria.

Yangon hotel comes back. The Sedona Hotel Yangon in Myanmar is reopening after an extended shutdown due to COVID-19 and the military’s 2021 takeover of the government, with limited demand expected from business travelers and well-off domestic customers. The property was sold earlier this year by Singaporean state-backed conglomerate Keppel Corp. to hospitality investment firm Spring Blossom Ventures, which is also based in Singapore and will resume the hotel’s operation on its own. Operation will resume under the same name, starting with 200 rooms. A 2015 expansion lifted the total number of rooms to nearly 800. Occupancy will be adjusted going forward, based on demand.

Sonesta launches MOD. Sonesta International Hotels Corp. opened its inaugural MOD soft brand property, the 155-room Hotel 11, MOD a Sonesta Collection in Calgary, Alberta, Canada. The property also serves to broaden Sonesta’s presence in Canada. MOD is positioned within Sonesta’s upscale portfolio and features eclectic interior designs and amenities, such as curated food and beverage options.

US demand slows. U.S. domestic travel demand entered the fourth quarter on a slow note in October 2023, continuing a pullback seen in September. In October, Omnitrak’s Travel Market Penetration Index edged downwards to 98.7 (2015=100) – trailing October 2022 (99.1) and prior month September 2023 (100.7) index levels. Compared seasonally, October 2023 travel penetration remains well below historic levels for the month in question, closely tracking with 2022 monthly index levels. In contrast to overall travel penetration which trails pre-pandemic levels, Omnitrak’s Leisure Travel Index continued to run above 2019 levels. The Leisure Travel Index, which excludes trips for visiting friends/relatives and for business, incentive and convention purposes, ran at 141.6 in October 2023, well above October 2019 (128.0) and ahead of October 2022 (138.3) index levels, but slightly lower than the prior month (September 2023, 142.8).