High interest rates and a recession will make 2023 a challenging year for commercial real estate. Though inflation eased in late 2022, it was still running at more than 7%. The Fed will continue raising rates until it sees a marked reduction in inflation nearer to its 2% target. Weakening fundamentals and higher cost of capital will generally lower asset values.
According to data compiled by STR, in recent years, the luxury segment has fallen 2–5% behind the Washington, D.C. market average in occupancy, while luxury rates have paced roughly $150 to $200 above average. This rate difference is largely due to a few luxury hotels that perform at a higher rate threshold than the remainder of the luxury class, including the Four Seasons, the Waldorf Astoria, both Ritz-Carlton properties, the Hay Adams, and the St. Regis. These higher-rated hotels make up 15% of the total luxury room supply in the District.The 2022 market-wide operating performance for District of Columbia hotels was roughly 62%, at an ADR of just above $240. The 2022 RevPAR falls more than $20 below the 2019 level. The luxury hotel segment, which comprises around 30 hotels, also did not fully rebound to the historical 2019 RevPAR levels in 2022. However, ADR for this segment grew to roughly 115% of the 2019 level.
According to the Q4 2022 Hotel Construction Pipeline Trend Report for Canada by Lodging Econometrics (LE), LE analysts report that Canada’s total construction pipeline stands at 267 projects/35,758 rooms, up 2% by projects and 1% by rooms year-over-year (YOY).
As reported in the fourth quarter United States Construction Pipeline Trend Report from Lodging Econometrics (LE) for 2022, the franchise companies with the largest construction pipelines at the end of Q4 are led by Marriott International (Marriott) with 1,490 projects/180,113 rooms. Following Marriott is Hilton Worldwide (Hilton) with 1,378 projects/154,790 rooms and InterContinental Hotels Group (IHG) with 789 projects/78,951 rooms. Combined, these three companies account for 67% of the projects and 64% of the rooms in the total pipeline.
Unlike in years past when optimism among hotel executives was conservative, the first day of the Americas Lodging Investment Summit proved that leaders are all-out bullish on the health of the industry.
According to the fourth quarter United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the U.S. market with the largest hotel construction pipeline by projects is Dallas with a record high count of 176 projects, accounting for 20,790 rooms. Following Dallas is Atlanta with 145 projects/18,100 rooms, Los Angeles with 122 projects/19,419 rooms, Phoenix with 116 projects/16,229 rooms, and Nashville with 106 projects/14,198 rooms.
Hotel industry veteran Eric Danziger has launched a new company called Resolute Road Hospitality. The company, which was previously known as Braintree Hospitality, aims to rebrand and expand into national third-party management services. According to Danziger, the company promises to act as a true partner, advocate, and fiduciary to hotel owners, by providing the focus, attention, accessibility, and transparency that owners are entitled to but often lack. The company's current portfolio includes 15 properties with 1,732 guest rooms, and a robust growth pipeline.
In the most recent Construction Pipeline Trend Report for the United States (U.S.) from Lodging Econometrics (LE), at the close of 2022’s fourth quarter, the U.S. construction pipeline stands at 5,465 projects/650,626 rooms, up 14% by projects and 12% rooms Year-Over-Year (YOY).
Officials of She Has a Deal (SHaD), a real estate investment platform that creates new pathways to hotel ownership and development for women, today announced that 2022 SHaDPitch Today’s Woman competitor, Amina Gilyard James, acquired the 70-room Quality Inn in the Raleigh neighborhood of Memphis, Tenn.
The Hunter Hotel Investment Conference is pleased to present Fred Cerrone, Founder and Chairman of Hotel Equities, with the 2023 Hunter Conference Award for Excellence and Inspiration. Each year, the award recognizes a hotelier who exemplifies exceptional leadership, citizenship, and innovation. From his start as a desk clerk at the Sheraton Boston hotel more than five decades ago to the founding of Hotel Equities, Cerrone has been a leader that all in the hospitality industry can admire.
Pineapple Hospitality, a Pacific Northwest based real estate holdings company most notably recognized for its ownership and management of the Staypineapple brand of hotels, is announcing the launch of Staypineapple Hotels Inc. as of January 17, 2023. Staypineapple Hotels Inc. will take over the management of all 10 Staypineapple hotels across the United States, as well as open the doors for third-party licensing and property management.
Sandpiper Lodging Trust (SLT) announced today that it completed the acquisition of five operating hotels from affiliates Sandpiper Hospitality III, LLC and Sandpiper Hospitality IV, LLC that operate under the WoodSpring Suites brand. These five properties are located in White Marsh, MD, Greenbelt, MD, Virginia Beach, VA and two in Baton Rouge, LA.
CBRE has arranged the sale of a 65-property, 7,865-key hotel portfolio located across 27 states. Massachusetts-based REIT, Service Properties Trust, sold the portfolio to 21 separate buyers for a total consideration of approximately $514 million.
Heading into a new year, the U.S. commercial real estate industry finds itself in choppy waters amid fears of a recession, rising inflation, and interest rate hikes as market participants await a course correction. Challenges during 2022 including continued supply chain constraints, increasing labor costs and struggles in attracting talent are anticipated to endure through 2023. Combined with international and domestic geopolitical issues and market volatility, many believe during the near term, the U.S will experience a mild to moderate economic recession.
Mission Hill Hospitality, a leading select service and extended stay hotel investor, announced it has acquired the Holiday Inn Steamboat, a 117-key hotel in Steamboat Springs, Colorado. Terms of the deal are undisclosed.
Luxury hotel demand staged a respectable resurgence last year as the dreadful impact of the pandemic continued to fade. Trailing twelve-month RevPAR for luxury hotels in NYC, as of November 2022, has already surpassed its pre-pandemic benchmark from December 2018. This was a welcome improvement for prominent Midtown hotels that had reopened after many months of closure, including the Mandarin Oriental, Ritz-Carlton, The Plaza, St. Regis, The Peninsula, and the Lotte New York Palace.
Global hospitality and entertainment company Delaware North today announced its continued expansion in the parks and lodging sector through the acquisition of the Best Western Premier Grand Canyon Squire Inn.
Consistently on the cutting edge of the lodging industry and now recognizing the growing need for affordable living options throughout the country and beyond, this leading Chicago-based hotel investment and management company announces brand new multifamily venture.
LRE & Companies, a full spectrum real estate development, asset manager, construction, and hotel management company, has unveiled plans for Fernley Promenade, a 13-acre mixed-used development project comprising of industrial, retail, and hotel, in Fernley, NV, one of the fastest-growing cities in The Silver State.
Officials of Everwood Hospitality Partners (EHP), a leading hotel owner/operator with a growing portfolio of lifestyle, full- and select-service hotels nationwide, today announced the company has acquired the 184-room LaQuinta I Drive/Convention Center hotel in Orlando, Fla. from Cavalier Florida, LP.