US hotel construction declines for 7 straight months

Skift grip

Fewer hotels are being built in the United States this year due to rising costs and supply chain issues. Plus, talk about a Star Wars concept hotel and other deals and development news.

Sean O’Neill

Here are some excerpts from Daily Lodging Report of the past week. If you’re not a subscriber, you should be. Get updates on hotel deals, development, inventory and career changes. Register here, now.

Sunday July 24

W Hotels Worldwide announced the opening of West of Toronto. The 11-story property has 254 rooms, including 30 suites; five event spaces covering 4,679 square feet; a reception desk and lounges on the 6th floor, a 5,000 square foot space featuring a communal foyer, circular bar, and access to The Yard and FIT gym.

According STR, The construction of hotels in the United States has decreased for seven consecutive months. Rooms under construction in New York and Nashville represent a significant percentage of the existing supply in these markets. In addition, planning activity continues to increase nationallyalbeit at a slower pace, with markets such as Miami, Nashville, and Phoenix showing increased interest from developers.

Skift Rating: On the positive side, current hotel owners will not face new competition from new US hotels for the rest of the year. Experts said headwinds include rising debt costs due to interest rate hikes combined with supply chain issues.

Monday July 25

Selina announced the opening of Selina Serenity Rawai Phuket in Thailand. This is the first Selina property to be fully operational in Southeast Asia. They currently have a global portfolio of 155 open and secure properties designed for digital nomads and modern travelers.

Virgin Hotels advertised bookings are live for Virgin Hotels in Glasgow for reservations from December 1st. Located on the banks of the River Clyde in Glasgow, UK, the hotel will feature 240 rooms spread over 15 floors. It will house four restaurants and bars. The hotel was developed and owned by Silk Real Estate Group and managed by Virgin Hotels.

With the first half of the year now on the books, 2022 has provided an unexpected and tumultuous ride. The LWHA Q2 2022 US Hotel Top Sales Survey includes 133 unique asset sale transactions over $10 million, which totaled approximately $5.3 billion and included approximately 21,000 hotel rooms with an average selling price of $248,000 per room.

STR RevPAR for hotels in China fell -18.3% year over year for the week ending July 16. Compared to the same week in 2019, the hotel’s RevPAR is down -22%. China has around a fifth of its population under full or partial lockdown, according to one tally, as another rise in coronavirus cases prolongs uncertainty hanging over country’s economyNikkei reported.

Skift Rating: Selina’s expansion into Asia Pacific is notable given its strong ties to Gen Z and Millennial travelers and remote workers. He may be able to tap into the “gringo trail” of expats and gap-year students once international travel resumes.

tuesday july 26

Singapore hotel room rates have jumped last month to the highest level in nearly six years. The Singapore Tourism Board said the average fare in June was S$238.32, the highest since September 2016 and up 63% from a year earlier. Singapore expects between 4 and 6 million visitors in 2022.

Marriott International, Inc.announced the opening of The Ritz-Carlton New York, NoMad in the heart of Manhattan. The newly built 50-story hotel and residences were developed by Flag Luxury Group. The project offers 250 rooms, including 19 suites, with 16 additional one- and two-bedroom penthouse residences. The property offers four dining and beverage concepts, the Ritz-Carlton Sap and Fitness Center, the Ritz-Carlton Club Lounge, and 10,000 square feet of meeting space, including an expansive private outdoor terrace.

Skift Rating: It’s a surprise to see Singapore’s rebound given the lack of outbound Chinese travellers.

Wednesday July 27

Hotel shares has been chosen as the new management company for seven selected full-service hotels owned by Sejwad’s hospitality. The properties, which expand Hotel Equities’ reach in the South Carolina market, include the 180-room Delta Columbia Northeast; 134-room Sheraton Columbia Downtown; 129-room Moxy-Columbia, under construction; 104-room SpringHill Suites-Columbia, under construction; 100-room Holiday Inn Express-Garners Ferry; 83-room Holiday Inn Express-Two Notch; and the 83-room Fairfield Inn & Suites Columbia Downtown.

The team behind the Two Bit Circus micro amusement park in downtown Los Angeles, California, plans to take the Star Wars hotel concept launched by Wall Disney Parks adds a touch of virtual reality video arcade with a pair of new interactive storytelling hotels, according to the Los Angeles Daily News. Two Bit Entertainment has acquired two former conference hotels in Denver, CO and New York areawhere they plan to open the first Revelers Resorts Interactive Gameplay Hotels. The new Star Wars: Galactic Starcruiser at Disney’s Hollywood Studios in Florida is a model for the immersive hotel experience planned for Revelers Resort. The company does not have the Star Wars brand, but will create its own brand. The hotel’s immersive playgrounds are expected to take a year to complete once construction begins. Opening dates have yet to be set for Revelers Resorts in Denver and Stamford, CT, outside of New York.

Skift Rating: On the Star Wars hotel concept, it’s unclear if they can actually get the license to do it, and if not, what exactly would they create instead.

Thursday July 28

American Hotel & Lodging Association 2022 State of the Hospitality Industry Semi-Annual Report expects nominal room revenues in 2022 and state and local taxes will exceed 2019 levels. Hotel room revenue is expected to top $188 billion by the end of 2022, eclipsing 2019 numbers on a nominal basis. Hotels are expected to generate nearly $43.9 billion in state and local tax revenue this year, up nearly 7% from 2019 levels. Additional key findings from the semi-annual State of the Industry report AHLA’s 2022 figures are as follows: hotel occupancy is expected to average 63.4% in 2022, approaching pre-pandemic levels. By the end of 2022, hotels are expected to employ 1.97 billion people, or 84% of the pre-pandemic workforce.

Capital of Arriba closed a $63.9 million syndicated construction loan for the development of a AC Hotel by Marriott in downtown Seattle, WA. The 200 Key Hotel is developed by RevPAR Companies.

Skift Rating: Being a hotelier has been miserable for two years. But 2022 looks profitable, despite some lingering headaches.

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