From the desks of the Hotel News Now editorial staff:
- Wyndham completes acquisition of La Quinta
- AccorHotels wraps up buy of Mantra Group
- Lenders to borrowers: Now is the time to buy, refinance
- CBRE revises up its 2018 outlook for US hotels
- US economy growing at slower pace than predicted
Wyndham completes acquisition of La Quinta: The acquisition of La Quinta Holdings’ hotel franchising and management business, which closed today, adds more than 900 franchised hotels comprising nearly 89,000 rooms to Wyndham Hotels & Resorts’ portfolio, Wyndham Worldwide announced in a news release.
When Wyndham Hotels & Resorts spins off into its own publicly traded company, effective at close of trading Friday, it will be the world’s largest hotel franchising company by number of properties, according to the release. It will trade on the New York Stock Exchange under the symbol “WH.”
During Wyndham Worldwide’s first-quarter earnings call with analysts, EVP and CFO David Wyshner said the La Quinta acquisition is expected to contribute about $8 million of earnings before interest, taxes, depreciation and amortization a month immediately, “subject to some seasonality, growing to around $13 million a month by 2019 as the business is fully integrated.”
AccorHotels wraps up buy of Mantra Hotel Group: In other transactions news, AccorHotels announced today that it has closed on its acquisition of Mantra Group, according to a news release.
The deal, valued at $1.3 billion Australian dollars ($985.4 million), grows AccorHotels’ portfolio by 127 properties with more than 20,000 rooms in hotels, resorts and serviced apartments across Australia, New Zealand, Indonesia and Hawaii.
With the closing of the acquisition, AccorHotels is the only shareholder in Mantra.
Lenders to borrowers: Now is the time to buy, refinance: Lenders speaking at the Meet the Money conference earlier this month in Los Angeles were bullish about financing projects at existing hotels, but less so about financing new construction, reports Hotel News Now’s Jeff Higley.
Alice Gao, SVP and head of commercial banking for Industrial and Commercial Bank of China, said the strength of the U.S. economy is behind that trend.
“For the traditional banker, we are aggressive in the beginning of the year, just because we do have a target to fill and we need to bring more business into the bank,” she said. “What I’m seeing for the traditional bank, hospitality lending for (loan-to-value) side, normally we do up to 65%. Alternatively, borrowers can go to (commercial mortgage-backed securities), they can probably get LTV up to 70%, a little high rate on the bank. For the floating CMBS loans, probably they can go LTV up to 80% for the highest rate.”
CBRE revises up its 2018 outlook for U.S. hotels: After a better-than-expected performance in the first quarter, CBRE Hotels’ Americas Research projects that U.S. hotel industry revenue per available room will grow 2.8% in 2018, according to a news release. That’s up from the firm’s previous projection of 2.5% RevPAR growth.
Behind the enhanced RevPAR guidance is the expectation that U.S. lodging demand will grow 2.1% (up from a projection of 1.8% in March), occupancy will be up slightly (+0.1%) versus down (-0.1%, projected in March) and average daily rate will increase 2.7%.
“With sustained record occupancy levels, we also are starting to see the return of some pricing power for U.S. hoteliers,” John B. (Jack) Corgel, Ph.D., professor of real estate at the Cornell University School of Hotel Administration and senior advisor to CBRE Hotels’ Americas Research, said in the news release.
U.S. economy growing at slower pace than predicted: A report by the U.S. Commerce Department indicates that U.S. GDP grew at an annual rate of 2.2% during the first quarter of 2018, which is slower than the projected 2.3%, Fortune reports.
The slower growth is attributed to inventory growth that proved weaker than preliminary calculations (valued at $20.2 billion, down from $33.1 billion), the magazine reports. Consumer spending growth also slowed moderately (1%, down from an earlier projection of 1.1%).
Compiled by Robert McCune.