Since the renewal of the EB-5 program this year, there has been a lot of talk about what this means for developers interested in taking on new projects. Our recent article in Westlaw Today sums up the latest information about the program. Part one is below; part two will be published next week.
The hotel development and financing world is buzzing with the news that the EB-5 program has been renewed, creating new opportunities for upcoming projects. My partner David Sudeck and I have written the short update below to help get you up to speed.
During the pandemic we had to make changes driven by the need for more robust health and safety, to ensure that everything was hygienic and because everything needed for every stay had to be dry cleaned afterwards, we had to be more efficient, only putting out what was needed.
As we get ready to close out the first quarter, the Hunter Conference offered the industry’s latest perspectives on where we find ourselves today and predictions about how the rest of 2022 may play out. Highlights of what we heard at the event are captured here.
With demand recovering faster than expected in 2021, hotel companies put the COVID-blues behind them and pressed the accelerator on their expansion plans, resulting in a year-over-year increase of over 24% in brand signings by keys. During the year, 135 new hotels with 12,359 rooms entered the branded hotel market, while 58 hotels with 3,108 rooms were rebranded.
In December 2021, the U.S. Consumer Price Index (CPI) exceeded its 2020 level by more than 7%, the highest rate since the 1980s, according to the St. Louis Federal Reserve. This dramatic upswing has rekindled debates over the effects of high inflation.
One of the main economic engines of the San Francisco Bay Area, Silicon Valley experienced tremendous growth during the last business cycle. Major companies such as Google, Apple, and Meta (formerly Facebook) have expanded their presence in recent years, which has historically translated to strong lodging performance. However, with the onset of the pandemic and a market-wide shift in policy toward remote working in 2020, hotels have been severely affected, particularly in terms of average rate. Moreover, the influx of new supply over the last several years has been significant, which has substantially heightened competition within most Silicon Valley submarkets.
Ever-changing market factors, including external economic forces, shifting demand patterns and changing competitive pressures, can all influence a property's success and constantly require hotel property owners to re-evaluate their asset's position to improve its image, profitability and value.
As the economic recovery continues following the depths of the COVID-19 pandemic, the current market is making mergers and acquisitions (M&As) more and more attractive to hotel industry players. While a concentrated movement of merger and acquisition activity has been lacking thus far in the cycle, the large availability of private equity, low interest rates, the return of CMBS, and favorable liquidity in the debt market are enticing. However, compared to past “headlines” and brand-related M&A activity, such as the Marriott and Starwood Hotels & Resorts $13-billion deal in 2016, it appears that the effects of the pandemic have spurred more interest from hotel management and ownership-related companies.
ALIS kicked off the 2022 hospitality industry convention season this week with heightened optimism for the sector. Several factors are converging this year that are setting the stage for what may be a year of record-breaking transaction activity.
During 2021, vaccines and booster shots paved the way for a brief return to some semblance of normalcy, however as we enter 2022 the nearly two-year global health crisis is not over. Since the end of November, the Omicron variant of COVID-19 has surged, bringing record high daily counts of infection resulting in many companies further delaying their longawaited return-to-office. Staffing shortages and the global supply chain challenges continue to wreak havoc on businesses and Omicron has the potential to further disrupt travel including the airline, hotel, and group meeting and convention industries.
Las Vegas is truly the capital of the North American hospitality industry, followed next by perhaps New York City and Orlando (or all Southern Florida). With massive infrastructure investments, these modern, cruise-ships-on-land offer everything a guest could want under a single roof. As such, these thousand-room properties deserve special focus as a litmus test for the industry as a whole.
The recent Covid crisis has highlighted the resilience of the hotel sector in France. An investment in a hotel (as in a boutique hotel) should also be regarded by investors as a “pleasure asset”. When benefiting from the French favourable tax reinvestment regime, what should investors be looking at if they wish to make the switch to hospitality?
The NYU Investment Conference arrived five months late this year, but it was worth the wait. The event attracted over 1,000 registered participants eager to hear from a stellar lineup of the global industry’s top leaders and influencers, and it kicked off in a bustling Times Square on the same day U.S. airports reopened to fully vaccinated international travelers. The Marriott Marquis did an expert job of handling the event, including top-notch service, food, beverages, and cleanliness. The attendees, all required to be fully vaccinated, were treated to a fantastic program arranged by Dorothy Jennings and her planning committee.
Jonathan Humphries is a hospitality consultant and also heads the International Hotel Development and Finance Bachelor’s degree specialization at Glion Institute of Higher Education. He argues that in a fragmented, post-Covid commercial landscape the hotels which thrive will do so through constant reinvention and total flexibility in their approach to market. And who sits at the center of delivering this ‘agile state’? The asset manager.
The Covid pandemic has impacted the world in every conceivable way and when things return to “normal” one day, cultural behaviors and norms may never be quite what they were. One of the most significant changes has been the shift to an increasingly remote and tech-driven lifestyle with limited human interaction. No industry felt this more deeply than the hospitality industry whose benchmark for quality service is often directly tied to human connection. Hotels were forced to adjust to meet guests' comfort levels - from cleaning protocols to digital check-ins, shutting F&B venues and more.
In light of the coronavirus (COVID-19) pandemic and the effect it has had on lending and new development in the hospitality industry, it may be beneficial to review the basics and walk through the investment life cycle of a hospitality asset. This guide is intended to be a helpful reference for a seasoned hospitality professional, a student looking to break into the industry, and anyone in between. Furthermore, HVS has leading experts for each stage of the process, ready to help you with any of your hotel investment needs from conception to disposition.
The U.S. economy is expected to grow roughly six percent for the year, however with one quarter to go in 2021, this year has done its best to be as tumultuous and volatile as the last. It feels like we’ve been on this road for a while, with the same kinds of bumps to navigate including COVID, deepening supply chain issues, higher energy prices, a recent cutback in consumer spending, and the scarcity of materials. What everyone had hoped would be a more normalized environment has turned out to be anything but that.
At the start of the pandemic, I implemented, when considered in retrospect, was an uncharacteristic experiment. For an entire day, I tried not to touch anything in a public space. After a few hours of what seemed like a long game of playground tag, I realised that it was impossible to shun much of our physical contact outside the home effectively.
There are big hotel projects and then there are even bigger projects. Resorts World Las Vegas tops even that threshold. Just imagine a project covering 88 acres, over 3,000 guestrooms, three separate hotel marques (Hilton, Conrad and Crockfords), five pool experiences, a massive spa, 40 restaurants and bars and gaming, with a total investment of over $4.3 billion. And, for good measure, add in constructing this through the COVID pandemic!