Latest news: What's driving US profitability?; Hard Rock by Citi Field?; Minor to Paris

US profits aided by corporate, group. A recent increase in U.S. hotel labor costs reflects a normalizing business mix and significant gains in group demand, according to September year-to-date P&L data from CoStar. September 2023 year to date per-available-room metrics show GOPPAR at $75.74 (+6.2% YOY); TRevPAR at $208.34 (+8.6% YOY); EBITDA PAR at 52.95 (+5.1% YOY); and LPAR (labor costs) at $69.36 (+13.1% YOY). Profit levels in the major markets are further evidence of business travel and groups. Overall, 13 of the Top 25 markets posted double-digit growth in GOPPAR through September, led by New York City and Oahu. Roughly 60% of hotel industry revenue growth in the past six weeks is from weekdays, with the major markets leading the way, according to CoStar. Additionally, U.S. group demand has risen by an average of 3.1% year over year since Labor Day. “That nearly double-digit increase [in F&B labor costs] supports the improvement in group business we have been reporting in the top-line metrics and aligns with weekday groups lifting the bottom line,” said STR’s director of financial performance. “Catering and banquet revenues jumped 20% year over year, another measure of the return of corporate and group demand.”

Hard Rock resort proposed next to Mets stadium. New York Mets owner Steve Cohen and Hard Rock International have reportedly unveiled plans for an $8 billion casino resort at Citi Field in Queens New York. There will also be a live music venue, tailgate park, food hall and 20 acres of new park space. New York-based SHoP Architects, Field Operations and construction firm McKissack are also involved in the project.

Grand Hyatt to Deer Valley. Hyatt Hotels Corp. is bringing its Grand Hyatt brand to Park City, Utah, having signed a deal with Extell Development Co. to take over the famed Deer Valley Resort in late 2024. Expansion will include more than doubling the resort’s skiable terrain and will feature 16 new ski lifts and a 10-passenger gondola. The Grand Hyatt Deer Valley will offer 387 guestrooms, inclusive of 40 suites, 55 private residences and 38,900 square feet of indoor event space, including a 10,000 square foot grand ballroom. The property will feature an expansive outdoor event terrace with mountain views, as well as a heated year-round pool.

Minor to Paris. Minor Hotels has announced it debut in Paris with three NH Hotels in 1Q24, with one of the properties to be rebranded as NH Collection in 2025 following a renovation. Swiss Life Asset Managers France has chosen Minor Hotels to manage the properties that will include the 207-key NH Paris Gare de l’Est and the 103-key NH Opéra Paris Faubourg. The third property, with 90 keys, will open as NH Paris Champs-Elysées and will then be launched in 2025 as an NH Collection property following a renovation. The three hotels in Paris will join Minor Hotels’ current portfolio of six properties in the country. Future NH barnd openings include NH Collection Helsinki Grand Hansa in Finland, NH Collection Chiang Mai in Thailand and NH Collection Luang Prabang in Laos.

Maine resort trades. Developer Tim Harrington has acquired The Dunes on the Waterfront, adding to his number of boutique properties in Maine. Harrington purchased the property with his Batson River Partner Kevin Lord.  Set to open for the summer 2024 season, The Dunes overlooks Ogunquit Beach. Originally purchased in 1935 as farmland, property is one of Maine’s original cottage colonies. Prior to its acquisition, the property was most recently managed by Aaron and Cindy Perkins, the third generation to operate the resort. In addition to The Dunes, Harrington purchased The Claremont Hotel in 2020, Salt Cottages in 2021 and the Asticou Inn earlier this year. Further, Harrington is the owner of management company Atlantic Hospitality, and was a founder of the Kennebunkport Resort Collection where he remains a partner.

AHLA sues over “franchise-model destroying rule.” The American Hotel & Lodging Association (AHLA), the U.S. Chamber of Commerce, and other plaintiffs on Thursday filed a lawsuit in the U.S. District Court for the Eastern District of Texas challenging the legality of the National Labor Relations Board’s (NLRB) new “joint-employer” regulation. The suit contends the NLRB has violated the National Labor Relations Act and is acting arbitrarily and capriciously in violation of the Administrative Procedure Act. The NLRB issed a new joint-employer standard on October 26 that will force hotel brands to the collective bargaining table with franchised employees over which they have no authority. Currently, a company can be treated as a joint employer only if it has “substantial direct and immediate control” over a group of employees. Under the NLRB’s new regulation, which will take effect December 26, a company can be treated as a joint employer and forced to collectively bargain, even when it has no actual control over workers. This change will make hotel franchisors jointly liable for workplace matters at franchise locations even though franchisors have no control over franchise employees, and it will force unions on hotel franchisees and their employees.

Ashford wants to sell more hotels. Ashford Hospitality Trust wants to sell more of its hotel properties and said during its third-quarter earnings call that despite announcing in July it wanted to give back the keys to the lender for 19 underperforming hotels that negotiation is ongoing. When asked during the earnings call whether the Dallas-based REIT has returned the keys on the 19 hotels, CFO Deric Eubanks said, “In terms of timing, all those hotels are still in our portfolio. Everything these days just seems to be taking longer transaction-wise… Hopefully, by the end of the year, all 19 of those hotels have been transferred over to the lender. Some of that might happen in November. Some of that might happen in December.” Ashford said it has six hotels currently marketed for sale and sold 79 owned units during the quarter, as well as the public space at the WorldQuest Resort in Orlando, Florida, for $14.8 million. The REIT said nine hotels have received or are expected to receive significant upgrades. Ashford also said it will convert its Le Pavillon Hotel in New Orleans to a Tribute-branded hotel and is planning to convert its Crowne Plaza La Concha Hotel in Key West, Florida, into a Marriott Autograph Collection hotel. Both conversions are scheduled for 2024. For the third quarter, Ashford’s comparable RevPAR growth was 4%, ADR growth was 2.2%, and occupancy growth was 1.7%. Total revenues were up 4.7%, and hotel EBITDA was up 2.8%.

Macau boosts MGM’s revenue. For its third-quarter earnings, Las Vegas-based MGM Resorts International said its consolidated net revenues of $4 billion increased 16% compared to 3Q22, primarily because of an increase in revenue at MGM China post-COVID in Macau. The gains in Macau offset decreased revenues at the company’s Las Vegas Strip resorts and regional operations. MGM said this was due to dispositions at The Mirage and Gold Strike Tunica and a cybersecurity incident in September. Net revenues at its Las Vegas Strip resorts were $2.1 billion, compared to $2.3 billion in 3Q22. Net revenues at its regional operations also fell to $925 million, compared to $974 million in the prior year quarter. CEO Bill Hornbuckle said the company has a pipeline of development opportunities in New York and Japan and is optimistic about growth in Las Vegas because of Formula 1’s inaugural race next week and the Super Bowl in February.

US occupancy dips below 60%. Hotel performance from October 29 to November 4 in the U.S. showed an expected decline from the previous week and mixed YOY comparisons, according to CoStar. The numbers showed occupancy down 4% (59.7%), ADR up 2% ($152.90) and RevPAR down 2.1% ($91.93). The decrease in occupancy was expected due to Halloween falling on a Tuesday. Among the top 25 markets, St. Louis saw the largest YOY increases in occupancy (+6.4% to 59.2%), ADR (+12.3% to $131.16) and RevPAR (+19.5% to $77.64) while the steepest RevPAR declines were in Miami (22.5% to $131.88) and Tampa (-19.6 to $87.29).

Aleph partners with NBA executive. Dubai-based management company Aleph Hospitality has partners with Masai Ujiri, president of the NBA’s Toronto Raptors, to develop Zaria Court Hotel and manage the 80-room Zaria Court Hotel in Kigali, Rwanda, set to open in in the first quarter of 2025. Zaria Court is expected to be the first in a series of urban hubs for sports, social and cultural community gatherings across Africa, with expansion plans in Nairobi, Dakar, Accra, Lagos and Johannesburg over the next five years.

Las Vegas rebranding. Affinity Interactive (AI), a omni-channel media, online, and gaming operator, announced that Silver Sevens Hotel & Casino in Las Vegas will undergo an extensive renovation and rebranding transformation, emerging as The Continental Casino & Hotel. AI will be making substantial investments in gaming offerings and introduce a range of unique dining options. Notably, after a six-year absence, the renowned Pink Taco will return to Las Vegas.

LatAm pipeline update. The construction pipeline in Latin America stands at 579 projects/95,144 rooms at the close of Q3 2023, according to Lodging Econometrics. The region’s pipeline project counts are up slightly, at 6% year-over-year (YOY) by projects and 5% YOY by rooms. At the Q3 close, there were 93 new project announcements (NPAs), accounting for 415,416 rooms, marking the largest number of new project and room announcements in Latin America since Q2 2017. Similarly, construction starts are the highest they’ve been since Q3 2019, standing at 54 projects/9,433 rooms. Notably, the luxury and upper upscale chain scales hit record-high project and room counts at Q3. The luxury chain scale closed the quarter at 100 projects/19,389 rooms, while the upper upscale chain scale closed Q3 at 108 projects/22,598 rooms. Mexico continues to have the most projects in the Latin America construction pipeline at the Q3 close, accounting for 39% of projects and 37% of rooms in the region’s total pipeline, with 226 projects/35,572 rooms. Brazil follows with 85 projects/14,304 rooms. The Dominican Republic’s pipeline grew substantially compared to Q3 2022, to close the quarter with a record 42 projects/10,060 rooms.

Marriott adds on Greek island. Marriott International has signed an agreement with the Investment Fund SMERemediumCap to bring The Luxury Collection to the Dodecanese Islands in Greece, following an extensive renovation of Patmos Aktis Suites & Spa. Expected to open in summer 2024, the 56-room Patmos Aktis, a Luxury Collection Resort & Spa, Greece will be the only luxury resort on the Island of Patmos. Additional guestrooms will be added on in 2025.