In this week’s roundup of news from the Americas region: Hilton keeps eye on LatAm growth; resort fees reach record high; wildfires disrupt California hotel performance; and more.
Hotel News Now each week features a news roundup from a different region of the world. Today’s review covers the Americas.
Brand’s role in deals equation
A key part of new builds or hotel transactions is what brand the hotel is and what options that opens up for the developers and owners, reports HNN’s Bryan Wroten.
Hotels that can be reflagged are the best hotels to sell, said CBRE Hotels SVP Nate Sahn, because they will get interest from the buying community. There’s more opportunity when moving a hotel up a brand, he said, and hotels that lose flags or are “down-branded” create trickier deals.
“They require more equity going in,” he said. “If it’s going upstream, it’s great.”
For more from the HNN Deals Roundtable, click here.
Hilton’s LatAM growth driven by select-service brands
For Hilton, Latin America continues to be a priority for expansion, reports HNN’s Stephanie Ricca, with select-service brands driving the company’s pipeline, largely due to demand from a growing middle class of travelers in Latin America, according to development executives.
“It’s a recurring theme that the middle class is growing and continues to grow (in Latin America),” said Ted Middleton, SVP of development in Latin America for Hilton, during a break at the South America Hotel Investment Conference in September. “All the major hotel chains have expanded footprints down here, but as the supply of hotels increases, there hasn’t been a significant decrease in occupancy.”
Hoteliers see, adapt to changes in resort fees revenue
Total resort and facility fees are expected to reach a record high for 2017 in U.S. hotels, but some fees, such as internet access, are decreasing and hoteliers are adjusting to the changes, reports HNN’s Dana Miller.
Sean Mullen, president of acquisitions at Noble House Hotels & Resorts, said hotel and resort guests now view Wi-Fi access as essential, and thus they don’t want to see a separate charge for it on their bills.
“I think Wi-Fi is a must-have for consumers, and it’s evolved to now being that there is a basic Wi-Fi service,” Mullen said. “As far as the fee, that is either included in your room rate or included in the resort fee, and consumers are fine with that if they then are presented the option of higher speed in Wi-Fi with an additional cost.”
Wildfires disrupt hotel performance during peak season
Hotels in California’s wine country took large hits during peak tourism season because of the outbreak of wildfires, with about 245,000 acres burned, 8,400 structures destroyed and 42 people killed since 8 October, according to an analysis from Raquel Ortiz, senior analytics manager at STR, parent company of HNN.
During October, hotels in Sonoma County would typically report occupancy in excess of 81%, but within the first two weeks of October this year, revenue per available room decreased 15.3% compared to last year. Largely this was due to a 10.2% decrease in occupancy, Ortiz writes.
STR: Q3 hotel performance
During the third quarter of 2017, Mexico saw mixed results in the three key performance metrics compared to last year, according to data from STR.
Occupancy dropped 1.6% to 63.1% while average daily rate increased 4.1% to 1,994.03 Mexican pesos ($104.20) and RevPAR rose 2.5% to 1,258.06 Mexican pesos ($65.74).
The Canadian hotel industry reported positive year-over-year results in the three key performance metrics.
Occupancy grew 1.8% to 78.7%, ADR increased 5.7% to 174.44 Canadian dollars ($135.23) and RevPAR rose 7.6% to CA$137.55 ($106.63).
The Central/South American region also reported mixed year-over-year results in the three key performance metrics.
Occupancy was up 2.3% to 57.9%, while ADR dropped 8.4% to $100.36 and RevPAR was down 6.3% to $58.14.
Buzz in atmosphere brings hotels midday F&B business
Generating a livelier atmosphere in a hotel’s lobby and food-and-beverage space can help draw in lunchtime crowds at hotel F&B venues, reports HNN’s Dana Miller.
Placement of where the F&B options are within the hotel are key to getting guests’ attention, said Jeff Rostek, regional VP of full-franchise operations at the Hyatt Regency Los Angeles International Airport.
“We placed (the Unity LA Restaurant, Open Market and Bar) kind of strategically right next to the elevator, so when you come out of the elevators, or you’re going into the elevators, you’re basically looking right at the market,” he said.
Deals and developments
- El Cid Resorts will open the 290-room Ventus at Marina El Cid Spa & Beach Resort Cancún Riviera Maya in November. This will be El Cid Resorts seventh property in Mexico.
- NewcrestImage opened Dallas’ first dual-branded hotel with the 128-room AC Hotel by Marriott and the 121-room Residence Inn by Marriott.
- HRI properties announced they have financially closed and began construction on the dual-branded Hyatt Place and Hyatt House hotel in the Wholesale District in Indianapolis. The property is expected to open in Q2 of 2019.
- Choice Hotels International signed an agreement with Sandalwood Management and KPG Hotels to begin development on its first Cambria hotel in Baltimore. The 114-room property is expected to open in the end of 2018.
- The 106-room Hyatt Place Santa Cruz, in Santa Cruz, California, opened through EB-5 financing and help of the American Lending Center.
- M&R Hotel Management announced the opening of the 250-room Hilton Garden Inn New York Times Square.
- Interstate Hotels & Resorts obtained three management agreements: a dual-branded 132-room Hyatt House and the 237-room Hyatt Place SeaTac International Airport and a 251-room luxury resort tentatively named Twelve Oaks in Southern California’s Temecula wine region.
Compiled by Dana Miller.