The U.S. hotel industry reported a double-digit increase in revenue per available during the week of 17-23 March 2013, according to data from STR, parent company of HotelNewsNow.com.
The metric was up 10.1% to $74.61 for the week. Occupancy (+4.4% to 66.4%) and average daily rate (+5.4% to $112.42) also increased.
Among the top 25 markets, New Orleans reported the largest occupancy increase with an 18.8% jump to 89.5%, followed by Minneapolis-St. Paul (+15.5% to 69.9%) and Detroit (+13.1% to 64.1%). Norfolk-Virginia Beach, Virginia, fell 0.9% in occupancy to 49.7%, posting the largest decrease in that metric.
Starwood Hotels & Resorts announced that Le Méridien and its ownership groups will spend more than $200 million to renovate 13 properties in the Middle East and Africa in the next three years. In addition, a new property will open this year in the region, a 350-room hotel at the Cairo airport.
The 13 hotels set for renovations are in Saudi Arabia (three properties), Dubai (three) Egypt (two), Gabon (two), United Arab Emirates, Mauritius and Abu Dhabi.
Globally, the brand plans 10 new hotel openings in the next year.
InterContinental Hotels Group sold its leasehold interest in the InterContinental London Park Lane for £301.5 million ($457 million) to an affiliate of Constellation Hotels Holding Limited, a Middle Eastern private investment group. IHG secured a 30-year management agreement for the 447-room hotel, with three 10-year extensions at IHG’s option.
The hotel opened in 1975 as an InterContinental, and IHG purchased it in 1999. According to the company, the property had revenues of $89 million in 2012.
Since 2003, when it became a standalone company, IHG has sold 191 hotels for $6.1 billion.
Currency exchange rates have an impact on the performance of U.S. hotels, but the magnitude varies significantly depending on the location and chain scale of the hotel, according to a whitepaper released today from PKF Hospitality Research. At a national level, the correlation between exchange rates and hotel demand is “modest,” but hotel demand is most sensitive to swings in exchange rates in gateway markets, said the report.
While hotels in gateway cities benefit the most during periods of increased demand and when exchange rates result in a relatively weak U.S. dollar, the benefit isn’t shared equally among all properties. The report showed a strong correlation between exchange rates and demand for upper-priced properties but not so for lower-priced hotels.
“When the U.S. represents a bargain destination, the value proposition for upper-tier hotels is greatly enhanced and the international travelers will take advantage of the opportunity,” said Jamie Lane, an economist at PKF-HR and co-author of the whitepaper. “On the other hand, price-sensitive travelers who seek accommodations are more consistent with their travel patterns and less reactive to changes in the relative value of their currency.”
Apple REIT Companies will continue to be an active player on the hotel transactions scene during 2013, reports HotelNewsNow.com’s Shawn A. Turner. The firm plans to be both buyers and sellers this year, Executive VP and Chief Investment Officer Nelson Knight said last week during an interview at the 25th annual Hunter Hotel Conference in Atlanta.
Overall, Knight said Apple REIT, which counts 290 hotels among its five acquisition funds, will be a net buyer of assets this year. “It’s a blend of one-off deals and portfolio deals,” he said. “Right now, we’re more weighted toward portfolio deals, but it’s a mix.”
On the company’s deal checklist, Knight said Apple REIT puts a lot of emphasis on institutional-quality assets that have strong brand affiliations. The company also considers the internal rate of return an investment could generate as well as whether the hotel can be purchased at a discount to replacement cost.
Compiled by Ed Watkins