HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s review covers the Americas.
Americas performance continues upward trend
The Americas region recorded positive results in the three key performance metrics when reported in U.S. dollars for January, according to data compiled by STR and STR Global, parent and sister companies to HotelNewsNow.com, respectively.
In January 2012, the Americas region reported a 3.9% increase in occupancy to 49.8%, a 3.7% gain in average daily rate to $103.98 and a 7.7% jump in revenue per available room to $51.81.
Among the region’s key markets, Chicago reported the largest occupancy increase, rising 15.4% to 47.4%. Three markets reported RevPAR increases of more than 15%: Chicago (+24.3% to $46.39); Rio de Janeiro (+23.2% to $179.71); and Miami (+15.8% to $148.71).
On the development side, STR and STR Global recently reported pipeline numbers from their respective Construction Pipeline Reports.
The Central/South America hotel development pipeline comprises 202 hotels totaling 30,002 rooms. In January, the region opened one project with 95 rooms. For the remainder of 2012, the region is expected to open 67 properties with 10,948 rooms.
The Caribbean/Mexico hotel development pipeline comprises 128 hotels totaling 17,771 rooms.
HoteI Investors Gauge shows optimism
Investors and lenders are showing growing signs of optimism, according to the most recent Hotel Investors Gauge, a quarterly survey from HotelNewsNow.com and its sister company STR Analytics.
Key findings from the Hotel Investors Gauge include:
• Investors’ return expectations for acquisitions declined to 18.5% from 20% in our prior survey, illustrating that investors are getting more confident in the hotel sector’s recovery.
• Developers’ return expectations also declined slightly to 20.6%.
• The median cap rate on trailing 12-month net income for stable assets was 7.9%. Although the cap rate is relatively stable compared to the previous Hotel Investors Gauge, the increasing cash flows and lower return expectation will likely increase asset pricing.
• Most of the lender terms remain relatively unchanged from the prior survey. Loan-to-value ratios generally ranged between 62.5% and 70%. The average Libor spread was 350 basis points. Most loan terms were five years.
Mandarin Oriental to open hotel in Atlanta
Mandarin Oriental Hotel Group signed a long-term management contract to rebrand and operate the former Mansion on Peachtree in Atlanta. The rebranded hotel is expected to open in May.
The hotel and residences are housed in a 42-story mixed-use building designed by architect Robert A.M. Stern. The hotel comprises 127 guestrooms and suites and an all-day dining restaurant and lounge bar.
The project is owned by a wholly owned subsidiary of iStar Financial Inc.
“We are delighted to introduce Mandarin Oriental's renowned services and facilities to this important destination,” said Edouard Ettedgui, CEO of Mandarin Oriental Hotel Group, in a statement. “This agreement provides the group with an opportunity to establish our brand in one of America’s fastest-growing, cosmopolitan cities.”
Mandarin Oriental Hotel Group now operates, or has under development, 42 hotels, with 12 in the Americas.
Hilton, Orbitz can’t reach agreement
Due to the expiration of its multiyear agreement with Hilton Worldwide, Hilton hotels will be less prominently displayed on Orbitz websites, Orbitz Worldwide said,
Hilton confirmed to Travel Weekly that it didn’t renew its Orbitz contract “in the best interests of our guests and our more than 3,800 hotels around the world.”
The company said that, in addition to Hilton-family websites, it will “continue to have other booking options available through valued third-party channels.”
Orbitz said the expiration of the contract means Hilton is no longer a preferred supplier. However, the online-travel agency said it will continue to work with Hilton to try and reach a long-term agreement.
Mexico City hotels rebound
Mexico City is one of the most significant economic centers in Latin America and its hotel market is showing strong growth, according to a Jones Lang LaSalle Hotel research report, Hotel Intelligence: Mexico City.
The report shows the city’s jump in demand, coupled with limited new supply, set the stage for robust growth in hotel operating performance over the next several years, which may translate into favorable investment prospects for opportunistic investors.
Amid robust economic recovery, occupancy in the city’s upper-tier hotels surpassed previous peak levels in 2011, driving a second year of double-digit growth in RevPAR.
“Mexico City’s average daily rate is expected to grow and accelerate further in 2012 and beyond. This will, in turn, lead to a continued increase in RevPAR growth of approximately 10% in 2012 and 2013,” said Clay Dickinson, executive VP for Jones Lang LaSalle Hotels.
Hyatt reflags Avia Hotels in California and Georgia
The Avia hotels in Napa, California, and Savannah, Georgia, will be re-flagged as Andaz Napa and Andaz Savannah, respectively, this summer, according to a Hyatt Hotels Corporation news release.
The reflags bring the total number of hotels in the Andaz brand to eight. Local architecture and design firms will work to showcase the surrounding areas through their design of the Andaz Lounge in both the Napa and Savannah hotels.
“Andaz hotels are a distinctive part of the neighborhoods in which they’re located, and the addition of these two hotels to Napa and Savannah will be a great complement to the growing number of hotels in places where our guests want to travel,” said Chuck Floyd, COO of Hyatt Hotels’ North American division.
Red Lion opens 3 New Mexico properties
Red Lion Hotels Corporation opened three hotels in New Mexico earlier this month. The hotels expand the company's western U.S. footprint from eight states to nine.
The 192-room Red Lion Hotel Farmington, located in the Four Corners region of New Mexico, opened 6 March. The 126-room Red Lion Hotel Grants, located on the historic Route 66 about 80 miles west of Albuquerque, opened 7 March. And the 126-room Red Lion Hotel Gallup, also located on the historic Route 66 about 130 miles west of Albuquerque, opened 8 March.
All three hotels previously operated under Best Western flags. The RLH franchising team reported targeting full- and limited-service Red Lion Hotels in 11 western states and British Columbia for conversion to the Red Lion brand.
Ascend Collection opens first hotel in Costa Rica
The Ascend Collection made its debut in Central America with a new member hotel in the capital city of San Jose, Costa Rica. Expansion continues in Canada as well, with new properties in Québec and Ontario, according to a news release from parent company Choice Hotels International.
The hotels are Gran Hotel, San Jose; St-Christophe Hotel & Spa, Granby, Québec; and Hidden Valley Resort, Huntsville, Ontario.
“Each hotel is in a prime location,” said Stacy Ragland, VP of operations for Ascend Collection. “We are thrilled to offer our guests these exceptional properties and new destinations to explore and enjoy. We look forward to continuing our international expansion in the coming year.”
Accor opens its 150th hotel in Brazil
With 900 million travelers a year, Brazil remains one of Accor’s development priorities. Accor recently opened its 150th hotel in Brazil—the Novotel Porto Alegre Aeroporto.
In 2011, Accor opened nine hotels in Brazil, comprising 1,300 rooms, according to a news release. By 2015, the network should boast 250 Brazilian establishments, said Roland de Bonadona, Accor's COO for Latin America.
“Brazil is currently experiencing a period propitious to economic activity in general and to the hotel industry in particular,” he said. “(Gross domestic product) growth causes an immediate increase in demand and boosts the development of the hotel industry."
Carlson Rezidor opens first Park Inn in California
The 204-room Park Inn by Radisson in Fresno, California, opened in early March, becoming Park Inn’s 125th hotel globally. The brand currently has 65 hotels in development, according to a news release.
“The opening of the first Park Inn by Radisson in California represents the continued momentum of our Ambition 2015 growth strategy and is aligned with plans to grow Park Inn by Radisson as a winning midscale brand in North America,” said Thorsten Kirschke, president of the Americas region for Carlson Rezidor.
Key openings, transactions
• The 165-room Cassa Hotel and Residences in Manhattan was sold for $130 million or $787,879 per key to HNA Property Holding from Assa Properties.
• The 146-room Hampton Inn Manhattan was sold for $69.5 million or $476,027 per key to RockBridge Capital from Magna Hospitality Group.
• The 209-room Element Miami International Airport opened in Miami.
• The 173-room Tryp by Wyndham Times Square South opened in New York.
• The Crowne Plaza Houston North Greenspoint was reflagged as the 335-room Hyatt North Houston.
• The Iowa Best Western was reflagged and will become the 144-room Magnuson Hotel Des Moines Airport.