Tag: lodging

European luxury hotel company Kempinski Hotels this week named cruise industry veteran Barbara Muckermann CEO, effective immediately.

Muckermann joins Kempinski from Royal Caribbean division Silversea Cruises, where she served as president and CEO. Her more than 25 years of industry experience includes stints with MSC Cruises and Norwegian Cruise Line. 

“Barbara has always been at the forefront of luxury, and her proven ability to elevate the guest experience while simultaneously maximizing profitability for leading travel brands made her the ideal choice to lead Kempinski Hotels,” said Kempinski board chairman René Nijhof in a statement. Muckermann is the first woman in Kempinski’s 127-year history to serve as CEO, according to the company.

Muckermann replaces former CEO Bernold Schroeder, who had led the company since December 2020. Schroeder in a LinkedIn post said he was “moving on to explore new career opportunities beyond Kempinski.”

Kempinski operates 82 luxury properties in 36 countries, mostly in Europe, the Middle East and China. The company in a statement said it “intends to add another 34 hotels and residences to its portfolio in Europe, the Middle East, Asia and Africa in the coming years.”

As leisure demand wanes and hoteliers find room rate increases harder to implement than in recent years, PwC on Wednesday tempered its projection for 2024 U.S. average daily rate and revenue per available room, while noting significant hikes aren’t likely in 2025 either. Business travel continues to improve, however, according to the company.

PwC in its May 2024 Hospitality Directions US report projected 2024 U.S. ADR would increase 1.2 percent year over year to $157.70 while RevPAR increases 2.2 percent to $100.23. In November, PwC’s most recent projection, the company forecast 2024 ADR growth of 2.4 percent and a RevPAR increase of 2.7 percent.

“A 50 [basis point] increase in the unemployment rate over the past 12 months … now speculative reductions in policy rates, and a perceived lack of visibility in the public markets have resulted in downward pressure on room rates,” PwC wrote in its report.

PwC now projects average 2024 U.S. occupancy of 63.6 percent, up from 62.9 percent in 2023 and higher than the 63.2 percent the company forecast in November. “Occupancy levels have declined year-over-year in each of the past four quarters but are expected to gradually improve through the balance of this year and at least the first half of 2025,” according to PwC. Hotel analytics firm STR this week noted that U.S. occupancy in April increased year over year, the first such monthly increase in at least a year.

As for business travel, “Individual business travel and group demand have continued to improve but have still not been able to offset the softening of leisure demand,” according to PwC. Looking ahead, “for the remainder of 2024 and into 2025, the outlook for markets reliant on individual business travel remains uneven with substantial deviation in office attendance across different metropolitan areas.”

PwC projected full-year 2025 U.S. occupancy to increase 0.7 percent, while the average daily rate holds steady and RevPAR increases 0.7 percent. 

RELATED: PwC November 2023 forecast

Hyatt Hotels Corp.’s business travel demand in 2024 has been “extraordinarily encouraging,” with systemwide first-quarter revenue from the sector up 6 percent year over year, with some segments up even higher, president and CEO Mark Hoplamazian said Thursday during an earnings call. 

Global business transient revenue “increased approximately 6 percent in the quarter with strength in both January and February, and we saw similar trends in the U.S., a clear sign that business travel continues to recover,” he said.

April systemwide business transient revenue was up 21 percent year over year, Hoplamazian said, although that figure was inflated by the shift of the Easter holiday from April last year to March this year.

Still, Hoplamazian shared other statistics to illustrate the strength of the business travel segment. “Business transient, frankly, in the first quarter, into the second quarter is extraordinarily encouraging,” he said. “Our business transient hotels were up 15 percent, almost 16 percent in the first quarter. Convention hotels were up about 11 percent, just as a hotel type. New York City was up 19 percent. San Jose and Seattle are really going strong. Why? Because technology transient, business transient, was up 30 percent in the first quarter.”

It wasn’t clear if Hoplamazian’s figures were year-over-year revenue, and Hyatt didn’t immediately return a request for clarification, but on the call he said, “these numbers are staggering.”

First-quarter group revenue increased 6 percent year over year, Hoplamazian said, with the May-through-December booking pace up 7 percent from 2023. He called the segment “the gift that keeps on giving.”

Q1 Metrics

Hyatt’s systemwide first-quarter revenue per available room increased 5.5 percent year over year to $131.86, while average daily rate increased 2 percent to $202.33 and occupancy increased 2.2 percentage points to 65.2 percent.

In the United States, RevPAR increased 0.2 percent year over year to $132.68, while ADR dropped 0.4 percent to $205.41 and occupancy increased 0.4 percentage points to 64.4 percent. Hyatt CFO Joan Bottarini said U.S. RevPAR increased about 2 percent when the effect of the Easter shift was excluded. 

Hyatt maintained its outlook for a 3 percent to 5 percent year-over-year increase in full-year 2024 RevPAR.

The company’s first-quarter revenue increased to $1.71 billion from $1.68 billion one year prior. Net income increased to $522 million from $58 million in Q1 2023, a figure boosted by sales this year of Hyatt properties in Green Bay, Wis., Aruba and Zurich. 

Net rooms increased 5.5 percent year over year to more than 323,400, while Hyatt’s pipeline increased 10 percent to more than 129,000 rooms.

RELATED: Hyatt Q4 performance

Choice Hotels International’s systemwide first-quarter occupancy, average daily rate and revenue per available room all declined year over year, although its upscale holdings bucked that trend and executives during a Wednesday earnings call said April was a stronger month. 

Systemwide RevPAR in the first quarter declined 5.9 percent year over year, which Choice CFO Scott Oaksmith attributed to the shift into the first quarter of the Easter holiday this year, as well as “tougher year-over-year comps as we were the first hotel company to return to and significantly exceed pre-pandemic RevPAR levels.” 

Choice executives didn’t directly address business travel demand trends, but the company’s upscale holdings, including the Radisson brands the company acquired in 2022, fared better in the first quarter. Choice systemwide Q1 upscale RevPAR increased 1.3 percent year over year, while ADR increased 2.3 percent. Occupancy declined, however, as it did in all Choice tiers.

The company maintained its projection, issued last quarter, that full-year 2024 RevPAR would range from steady year over year to an increase of 2 percent. 

“We expected Q1 to be softer,” said Choice CEO Patrick Pacious. “April did turn positive. So we are feeling pretty good about the trend. And as we expect to see both in our forecast and in our guidance, we expect to see RevPAR improvement from here forward.”

Eyes on Wyndham?

Choice in March abandoned its effort to acquire Wyndham Hotels & Resorts, but Pacious declined to explicitly rule out a scenario posed by an analyst during the call in which the company could renew the pursuit. When asked by Truist Securities analyst Patrick Scholes if Choice could try again if Wyndham’s stock remains around $75 per share—Choice in its hostile bid offered Wyndham shareholders $90 per share—Pacious didn’t say no. 

“You don’t see a lot of opportunities to create over $2 billion in value creation for shareholders on both sides,” Pacious said, noting that the company “felt very confident about the progress we were making” concerning the deal’s possible regulatory obstacles. 

“So it’s really a question, I think, which should be answered by the Wyndham shareholders in the future,” he said.

Wyndham’s stock closed Wednesday at $72.56 per share. 

Choice Q1 Performance

Choice systemwide first-quarter ADR declined 2.1 percent year over year to $89.23 while occupancy declined 2 percentage points to 50.7 percent. Systemwide RevPAR was $45.24, down from $48.06 one year ago.

Total first-quarter revenue declined 0.3 percent year over year to about $331.9 million, while net income declined to about $31 million from $52.8 million one year prior.

Choice said its global development pipeline as of March 31 was about 115,000 rooms. The company reported a pipeline of about 105,000 rooms at the end of December.

RELATED: Choice Q4 performance

Accor has added the first U.S. property to its soft upper-midscale Handwritten Collection brand, the company announced Monday. The 94-room boutique Hotel Stratford San Francisco joins more than 35 properties worldwide as part of the Handwritten Collection, which Accor launched in 2023. The hotel is Accor’s third in San Francisco, joining Fairmont properties in Nob Hill and at Ghirardelli Square, according to the company.

First-quarter occupancy, average daily rate and revenue per
available room at U.S. extended-stay hotels each declined year over year,
according to a new report by The Highland Group. Supply increases remain
relatively low, however, which could lead to increased occupancy soon,
according to the company.

First-quarter ADR for the segment was $116.56, down 0.2
percent year over year, the first such decline since the pandemic. However, the
drop was confined to the economy tier, as the upscale and midprice ADR
increased 0.7 percent and 1.8 percent respectively. 

U.S. extended-stay occupancy declined year over year for the
fourth consecutive quarter and sixth out of the past seven, down 1.4 percent to
71.5 percent. Occupancy declined in each tier. Outside of the pandemic,
Highland said this was the lowest quarterly occupancy level since 2013.

RevPAR for the segment in the first quarter declined 1.6
percent year over year to $111.88. As with ADR, much of the decline was
centered in the economy tier, where RevPAR declined 3.4 percent, with upscale
and midprice RevPAR holding roughly steady. It’s the first such quarterly
RevPAR decline since the pandemic, according to Highland. 

Still, supply growth remains low. Total available
extended-stay room nights increased 3.2 percent year over year, but that
includes the effects of the Feb. 29 Leap Day. Without it, that figure would be
about 2 percent, according to Highland, and almost entirely due to economy-tier
conversions. Sold room nights increased 1.7 percent year over year.

“The last time extended-stay supply growth was at its
current level was from Q4 2010 through Q3 2014, and the federal funds interest
rate was about one-tenth of its current level,” according to Highland. “With
interest rates expected to stay high during the near term and construction
costs rising, extended-stay supply growth should be relatively low nationally
for the foreseeable future.”

Added Highland Group partner Mark Skinner in a statement: “If
most forecasts for overall hotel industry performance are realized,
extended-stay hotels are likely to reverse the trend of declining occupancy in
the near future because demand has increased for 13 consecutive quarters and
supply growth is very low.”

Business travel revenue in the first quarter at IHG Hotels
& Resorts properties fell flat year over year and declined in the Americas
region, executives said on a Friday conference call. Still, overall revenue per
available room increased, and executives suggested business revenue picked up
April.

“Business revenue was flat,” said IHG CEO Elie
Maalouf on the call, “but that reflects the timing of Easter being in
March this year compared to April last year, as the week leading up to Easter
always experiences a lull in business travel.”

Business revenue in IHG’s Americas region declined about 2
percent year over year, according to IHG CFO Michael Glover, and overall
Americas RevPAR was down 0.3 percent, dragged down by a 1.9 percent decline in
the United States. Glover, though, suggested a subsequent upswing.

“When we look at the last eight weeks’ rolling
performance, which smooths out the shift of Easter that impacts not just
leisure travel but also the timing of business travel, our U.S. RevPAR in
aggregate over last eight weeks was ahead of last year,” Glover said. 

IHG systemwide first-quarter RevPAR increased 2.6 percent
year over year to $77.32, while ADR increased 2.3 percent to $123.95 and
occupancy increased 0.2 percentage points to 62.3 percent.

RELATED:IHG
Q4 performance

Hilton Worldwide’s first-quarter business transient travel revenue per available room among large corporate clients increased more than 3 percent year over year on “strong demand in consulting and government contracting,” president and CEO Christopher Nassetta said Wednesday during an earnings call.

“Business transient recovery remained steady,” Nassetta said. 

The company expects full-year overall business transient RevPAR to increase at “the midpoint” of a projected year-over-year systemwide RevPAR increase of 2 percent to 4 percent. 

“When you talk to customers …  you get a very positive view about their people traveling more for business transient,” Nassetta said. “And because the economy has been resilient and employment has been strong, I think it helps with the underpinning.”

Should that projected growth occur, Nassetta said by year-end business transient occupancy and demand could fully return to 2019 levels. Business transient revenue, he noted, already has eclipsed pre-pandemic levels. Demand levels currently are “modestly” below 2019 levels, he said, with small and midsized enterprises already having reached that level but not larger corporate clients.

Still, he noted the “pretty big growth” in demand in that segment in the first quarter. “That’s what we’re hearing from our big corporate customers as they’re traveling more,” Nassetta said. “So that is coming back. Their balance sheets are strong. Earnings are still … relatively strong. And so our expectation is by the end of the year from a demand point of view, we think there’s an awfully good chance that BT will get there, too, with continued growth in the big corporates and very resilient SMB business.”

Group RevPAR continued to show strength, with that segment’s RevPAR up 5 percent year over year, and Nassetta said “corporate groups continue to grow as a percentage of booking mix, and booking windows continue to lengthen.”

RELATED: BTN’s 2024 Meeting Strategy Survey

Q1 Metrics, 2024 Outlook

Hilton systemwide RevPAR increased 2 percent year over year in the first quarter, at the low end of the projection the company issued a quarter before. U.S. RevPAR declined by 0.4 percent. Nassetta blamed “renovations, inclement weather and unfavorable holiday shifts” that “weighed on results more than we anticipated.”

Hilton’s systemwide first-quarter average daily rate was $154.91, up 1.7 percent year over year. Occupancy increased 0.2 percentage points to 67.2 percent.

In the United States, occupancy declined 0.6 percentage points year over year, while ADR increased 0.5 percent to $161.67.

Total first-quarter revenue increased 12.2 percent to $2.57 billion. Net income was $268 million, compared with $209 million in the first quarter of 2023.

The company projected full-year and second-quarter systemwide RevPAR each to increase 2 percent to 4 percent year over year. Nassetta projected U.S. full-year RevPAR would be “towards the low end of the range.”

Hilton’s development pipeline at the end of the first quarter comprised 472,300 rooms, up 10 percent year over year.

RELATED: Hilton Q4 performance

Short-term accommodation provider Sonder Holdings acknowledged Friday it had received a “delinquency notice” from Nasdaq regarding its listing. Sonder has yet to file its fourth-quarter and full-year results, and announced March 15 it had “identified accounting errors related to the valuation and impairment of operating lease right of use assets and related items for the fiscal years 2022 and 2023.” Sonder has 60 calendar days from the time it received the notice—April 2—to regain compliance with Nasdaq listing rules, Sonder said, although Nasdaq could extend that deadline to Sept. 30. Sonder in a statement said it “intends to submit a compliance plan to Nasdaq and take the necessary steps to regain compliance with Nasdaq’s listing rules as soon as practicable.”

Wyndham Hotels & Resorts has partnered to bring extended-stay brand WaterWalk’s 11 properties into its portfolio, the company announced Tuesday. Under the deal, WaterWalk becomes Wyndham’s 25^th brand and its third extended-stay brand, as well as its first upscale extended-stay brand.

The deal isn’t an acquisition, and WaterWalk retains ownership of the brand, a Wyndham spokesperson told BTN. Still, WaterWalk will be “fully integrated” into the Wyndham portfolio, “same as any other Wyndham brand,” according to the spokesperson. WaterWalk will participate in Wyndham’s loyalty program and access Wyndham’s property and revenue management systems.

Financial terms of the partnership weren’t disclosed, nor would Wyndham clarify whether the arrangement was for a fixed period.

“In the last year, guest demand for the extended-stay segment reached record highs, which has been underscored by demand from owners and developers looking for new opportunities to partner with Wyndham,” Wyndham chief development officer Chip Ohlsson said in a statement. “Our vision is to offer the industry’s most robust portfolio of extended-stay brands, and the addition of WaterWalk marks an important step in that direction.”

Founded in 2014 by the late hospitality and extended-stay veteran Jack DeBoer, Wyndham said WaterWalk has 11 properties totaling more than 1,500 rooms. The brand’s calling card is each property’s split between traditionally furnished extended-stay guest rooms and unfurnished rooms, designed to allow long-term guests to decorate to their taste. DeBoer, who launched such brands as Residence Inn and Candlewood Suites, died in 2021. His granddaughter, Mimi Oliver, is CEO of WaterWalk.

Wyndham wouldn’t disclose whether any additional WaterWalk properties are in the development pipeline, but the spokesperson said, “we see long-term opportunity for the brand across both primary and secondary markets, with both new construction and conversion being viable options for growth.” 

Wyndham is “responsible for the brand’s long-term growth, taking point on identifying and selling new franchise opportunities,” according to the spokesperson. 

WaterWalk’s website lists 12 open properties in Atlanta; Boise, Idaho; Charlotte, N.C.; Huntsville, Ala.; Jacksonville, Fla.; Kansas City, Kan.; Minneapolis; Phoenix; Raleigh, N.C.; San Antonio; Tucson, Ariz.; and Wichita, Kan.; the reason for the discrepancy with the 11 Wyndham said was joining its portfolio wasn’t immediately clear. 

WaterWalk joins a Wyndham extended-stay portfolio that includes 72-property midscale brand Hawthorn Suites and Echo, the economy brand Wyndham announced in 2022. Wyndham on Tuesday said about 265 Echo properties were in the development pipeline with six nearing completion. Wyndham CEO Geoff Ballotti in February said the company planned for 75 to be open by 2026. 

WaterWalk in 2019 struck a deal with the serviced-apartment provider then known as Oakwood Worldwide to form an extended-stay brand, but Oakwood soon after shifted its business focus to hospitality management before being acquired by The Ascott Limited in 2022.

IHG Hotels & Resorts on Tuesday unveiled new U.S. prototypes for its three suites brands, designed to allow for more guest rooms per property.

The prototypes, which IHG said would be available in the second quarter with the first properties to include new features set to open in 2025, “supplement–rather than replace–existing choices” for Staybridge Suites, Candlewood Suites and Atwell Suites, IHG said in a statement.

The prototypes “emphasize space optimization and the potential for new efficiencies while retaining key features from current designs,” according to IHG.

The new prototype for upscale Staybridge Suites, which has about 325 existing properties with more than 160 in the pipeline, includes a slimmer guest room—13 feet wide compared with the current 16 feet—”engineered to house shorter-stay guests.” The prototype includes “streamlined kitchen equipment and fixtures and optimized millwork cabinetry,” enabling the slimmer design.

Midscale Candlewood Suites’ prototype also includes a slimmer guest room design, at 12 feet and six inches, compared with the current 15 feet and three inches. The prototype allows for as many as 12 new guest rooms in an existing footprint, according to IHG, and builds upon “the strong performance of the brand’s most recent design,” introduced in 2019. There are about 376 Candlewood properties currently open and another 150 in the development pipeline.

Officially introduced in 2022, upper midscale Atwell Suites this month opened in Austin, Tex., its third property, joining hotels in Miami and Denver. Atwell’s new prototype includes a one-story option with a reconfigured lobby, along with a slimmer room design—12 feet and six inches versus 16 feet and eight inches, allowing for up to 12 additional guest rooms in the same footprint. IHG has 41 Atwell properties in the development pipeline, it said. 

“Our new concepts reflect guest and owner feedback and enable new and existing owners to deliver our modern suite experiences—in various forms—to more markets without compromising consistency or quality,” IHG SVP of development of mainstream brands in the U.S. and Canada Kevin Schramm said in a statement. 

The new prototypes for now will be available only in the U.S. according to IHG, which added that they could be adopted in the future in Canada, the Caribbean and Latin America. “Nearly all” of the three suites-branded properties are in the Americas, said IHG.

Other new prototypes unveiled in 2024 include Hilton Worldwide’s Hampton and Choice Hotels International’s Sleep Inn.