In this week’s roundup of news from the Americas region: Tracking post-hurricane recovery; ownership in Mexico; and more.
Hotel News Now each week features a news roundup from a different region of the world. Today’s review covers the Americas.
Tracking recovery of Texas, Florida hotels post-hurricane
In the months following the devastation of Hurricane Harvey in Texas and Hurricane Irma in Florida, the entirety of these two states saw double-digit demand and revenue-per-available-room growth, according to STR, parent company of Hotel News Now.
RevPAR growth in the fourth quarter of 2017 was so significant, it rose nearly 2 percentage points above U.S. RevPAR growth. Both Florida and Texas make up 17.2% of total U.S. supply as well as 20% of demand in the winter months, which makes it unsurprising their performance had such a large impact on the country as a whole, writes Hannah Smith, STR consultant.
For five months after Hurricane Harvey hit Houston, demand and occupancy showed double-digit growth and average daily rate saw a double-digit increase for the first time four months after the storm hit. Hurricane Irma hit the Florida Keys market hard, dropping its available room supply by 19.4% in October and November.
Pebblebook in pursuit of LaSalle
LaSalle Hotel Properties rejected a proposed share-for-share merger by Pebblebrook Hotel Trust, which amounted to $30 per LaSalle share, at the end of March, but analysts believe investor pressure could push this deal along, writes HNN’s Bryan Wroten.
For the most part, investors have reacted positively to the proposed merger, said Wes Golladay, VP and equity research analyst at RBC Capital Markets.
“If you turn down a materially higher offer, it will be a very difficult road for the company for the next year or so,” he said.
The current state of ownership in Mexico
According to hotel owners in Mexico, the Mexican hotel industry is maturing, writes HNN’s Sean McCracken, and panelists at the 2018 Mexico Hotel & Tourism Investment Conference said the country has many opportunities for investors.
FIBRAS—the Mexican equivalent of real estate investment trusts—are becoming more prominent in the industry, but FIBRA executives say there’s still some education needed in the investment community to understand what they are.
“Those who are not part of the daily business may have trouble understanding the drivers,” said Fernando Rocha, director of acquisitions and development for Fibra Inn. “So, I believe it’s part of our task to explain the asset class.”
Despite rising labor costs, deals still possible
Hotel owners and developers in the United States are largely pressured by the shortage of skilled labor and rising labor costs; however, the right deals under the right conditions are still possible for the savvy owners and developers, writes HNN contributor Brendan Manley.
“A lot of us have been forced, in multiple industries, to really take a step back and look at the resources we have—the available resources, the shortages—and really approach things a little differently,” Bill Wilhelm, president of R.D. Olson Construction, said. “For example, (we may look at) going from ground-up to adaptive reuse, seeing where we can cut costs and minimizing some of the trades you might deal with in a different environment. Over the last 18 months or so, we’ve seen the continued increase of major renovations and adaptive reuse-type properties.”
Deals and developments
- Virgin Hotels along with a group led by Juniper Capital Partners and Fengate Real Estate Investments and its partners Dream, Cowie Capital Partners has purchased the Hard Rock Hotel & Casino in Las Vegas. A re-conceptualized property is expected for late 2019.
- The 1,399 room Ocean Resort Casino in Atlantic City, New Jersey, joins Hyatt Hotels Corporation as the newest addition to Hyatt’s Unbound Collection through a franchise agreement between a Hyatt affiliate and AC Ocean Walk.
- Marriott International opened the 271-room Marriott Irvine Spectrum in Orange County, California—the brand’s first new-build, full-service property to open in more than a decade.
- Hilton opened the 282-room Embassy Suites by Hilton Seattle Downtown Pioneer Square, the first of its brand in the area.
- Mexico-based Hoteles City Express opened the 108-room City Express Atlixco in Atlixco, Puebla, marking the company’s 137th property.
- Four Seasons Hotels and Resorts is planning development of the Caye Chapel in Belize, scheduled to open in 2021.
Compiled by Dana Miller.