Latest HITs: Aspen; Auberge; earnings; GBTA on Europe

Aspen adding to Limelight. Continuum Partners, a Denver-based real estate developer specializing in building urban, mixed-use projects, has sold an interest in the 200-room Hotel Born to Aspen Hospitality, a division of Aspen Skiing Co. The newly formed joint venture marks the beginning of the hotel’s future conversion to Limelight Denver under the operation of Aspen Hospitality in 2023. Rick Rush of CBRE represented Continuum in the deal. Hotel Born will continue to operate as usual until the conversion to Limelight occurs. Aspen Hospitality is working on further Limelight projects in Boulder, Colorado and Mammoth, California. Continuum Partners will retain exclusive ownership of the adjacent mixed-use property, known as Block A, including the office building, two leased retail spaces, and the Tavernetta and Sunday Vinyl restaurants (both operated by Frasca Hospitality Group).

Auberge grows in Europe. Auberge Resorts Collection, Mill Valley, California, has been selected by Garance Primat to manage Domaine des Estangs (pictured above) in Massignac, France, as of April 2023. The historic French chateau on 2,500 acres is situated just three hours by TGV train from Paris. Auberge has already been managing Garance Primat’s Primland family resort in Virginia for the past two years.

GBTA Europe forecast. The Global Business Travel Association (GBTA) provided some data and a 2023 outlook for business travel in Europe. Western European business travel spending climbed 23% in 2022, recovering to $194 billion, or 58% of pre-pandemic spending levels, whereas Emerging Europe business travel spend recovered 53% to $30.8 billion. The two largest markets European markets, Germany and the UK, have recovered less (in percentage terms) than the broader region. France, Spain, and three of the four Nordic markets — Sweden, Denmark, and Norway have recovered more than the broader region. Two Emerging Europe markets are showing particularly strong forecasts: Turkey has returned to 87.1% and Poland to 72.1% of its pre-pandemic spend. Compound Annual Growth Rate in business travel expenditure in Western Europe between 2021-2026 is expected to be 23.4% and 10.9% in Emerging Europe. UK, Finland, and Ireland are forecast to make the biggest percentage gains.

Rio owner raises stakes. Dreamscape Companies, a New York-based real estate development and investment firm that owns the Rio Hotel & Casino Las Vegas, has completed an $850 million capital raise managed by Wells Fargo and Raymond James. The capital raise will finance a multiple-phase renovation of the Rio, “reimagine” the two-tower structure with new experiences and modern amenities. Dreamscape bought the Rio from Caesars Entertainment in 2019 for $516 million. Caesars has continued to manage the property under a deal that ends this year. The capital raised will also launch two Dreamscape platforms: Dreamscape Entertainment Properties and Dreamscape Entertainment Integrated Resorts. The first is described as an experiential real estate investment trust (REIT) that will own gaming, hospitality and entertainment assets; while the latter will act as an operator of gaming, hospitality and entertainment assets. Both will focus on investing and operating in "strategically located, high-barrier-to-entry" markets with "asymmetric growth potential," according to a press statement.

Wyndham DEI. Wyndham Hotels & Resorts has reported that in just over six months, its BOLD by Wyndham program (Black Owners and Lodging Developers, established to promote Black hotel ownership) has   signed deals for 18 hotels across the U.S., including 10 under its newly launched ECHO Suites Extended Stay by Wyndham brand.

Indigo grows in UK. IHG Hotels & Resorts has signed its sixth Hotel Indigo property in London. The 252-room Hotel Indigo London K West Shepherds Bush has been signed in partnership with the Lancaster Landmark Hotel Co., which will refurbish the property due to open in Spring 2025. Hotel Indigo boasts 41 open hotels with a further 16 in the planning stages.

Pebblebrook reports. Pebblebrook Hotel Trust reported $319.6 million in revenue in 4Q22 and funds from operations of $25.9 million, or 20 cents per share, in the period. For the current quarter ending in March, Pebblebrook expects its per-share funds from operations to range from 6 cents to 10 cents. The 1Q23 outlook also stated an expected net loss of $43.6-48.6 million with RevPAR increases versus 2022 of 15-18%. Adjusted EBITDA guidance for 1Q23 of $46.5-$51.5 million includes $4.5-$6.5 million of renovation disruption and $7.2 million of preliminary business interruption proceeds. Same-property RevPAR for 1Q23 (vs. 2019) guides at -8.5% to -6.1%. Pebblebrook also announced $83 million of common shares have been repurchased since November 2022 and that more dispositions are in the offing. R.W. Baird research wrote that a recent industry report suggests Hotel Colonnade Coral Gables in Florida could soon be sold for $63 million, which would be ~2% below Baird’s valuation estimate. Pebblebrook has also announced the close on the sale of the 151-room The Heathman Hotel in Portland, Oregon for $45 million.

Apple REIT earnings. Apple Hospitality REIT reported 4Q22 earnings, achieving an improvement in RevPAR of approximately 7% for 4Q22 and 3% for all of 2022, with ADR growth of approximately 12% and 9%, respectively. Occupancy was down approximately 4% and 6% for the fourth quarter and full year 2022 as compared to the same periods of 2019. Based on preliminary results for 1Q23, occupancy was approximately 64%, up 13% YOY and down 4% vs. January 2019. The first quarter showed ADR growth of approximately 10% compared to January 2022 and 7% compared to January 2019. Apple Hospitality achieved comparable hotels adjusted Hotel EBITDA of approximately $102 million for the fourth quarter 2022 and $461 million for the full year 2022, improvements of approximately 18% and 42% as compared to the fourth quarter and full year 2021, respectively, and improvements of approximately 7% and 0.5% as compared to the fourth quarter and full year 2019, respectively. For 2023, the company’s guidance forecasts adjusted EBITDA of $420-$457 million. Forecast for RevPAR (comparable; vs. 2022): 3%-7%; hotel EBITDA margins (comparable margins in 2022 were 36.8%); total expense growth 5.6%-7.6%.

Sunstone beats. Sunstone Hotel Investors 4Q22 earnings beat on slightly better margins, $10 million of business interruption insurance proceeds, wrote R.W. Baird analysts. Looking ahead, 1Q23 guidance includes adjusted FFO/share of $0.16-$0.18 and adjusted EBITDA of $51-$55 million. Sunstone also said it expects $16-$18 million of renovation displacement in 2023 (on $130-$150 million of capex spending). For January 2023, RevPAR was +0.4% with ADR +20% (vs. 2019; 15 hotels). For 4Q22, Sunstone reported adjusted FFO/share of $0.26 and adjusted EBITDA of $68.8 million, both beating Street estimates.

Park’s 4Q. Park Hotels & Resorts reported 4Q22 earnings, including adjusted EBITDA of $159 million, beating the consensus estimate of $152 million. Adjusted FFO/share of $0.45 also beat the consensus of $0.40. Pro-forma RevPAR of $163 (-8.9% vs. 4Q19) compares to consensus of $165. For 2023, Park forecasts adjusted EBITDA of $610 million to $690 million; adjusted FFO of $1.60-$1.99; and RevPAR of $167-$179. For 1Q23, Park is expecting adjusted EBITDA of $124 million - $140 million; adjusted FFO of $0.30-$0.37; and RevPAR of $156-$162 or +34% to 40% y/y. Park repurchased 2.5 million shares in January at an average price of $11.64 per share ($30 million total value). It has also declared a 1Q23 dividend of $0.15 per share.

Chatham reports. Lodging REIT Chatham Lodging Trust reported 4Q22 earnings, highlighted by a 24% increase in RevPAR y/y to $117. ADR accelerated 20% to $171, and occupancy jumped 3% to 69% for the 38 comparable hotels owned as of December 31, 2022. Chatham incurred a $4 million net loss applicable to common shareholders compared to a net loss of $13.2 million in the 2021 fourth quarter. It raised hotel EBITDA margins to 33% 4Q22 compared to 31% in 4Q21. Adjusted EBITDA jumped 34% to $20.4 million from $15.2 million in 4Q21. Adjusted FFO advanced 68% from $6.1 million in 4Q21 to $10.2 million this year.

Nassetta chairs USTA. The U.S. Travel Association has elected Hilton President and CEO Chris as its national chair. Nassetta may serve up to two consecutive one-year terms. He will focus on advancing USTA’s mission to increase travel to and within the United States and establish travel as an essential contributor to the nation’s economy. Nassetta succeeds Christine Duffy, president of Carnival Cruise Line. The Washington, D.C.-based USTA represents the collective interests of over 1,000 industry organizations, including a diverse variety of travel companies.