Summit Hotel Properties has big plans for expansion, said Dan Hansen, president of the South Dakota-based company. Hansen discussed with HotelNewsNow.com Editorial Director Jeff Higley the process of going through an initial public offering and the company’s relationship with Choice Hotels International and InterContinental Hotels Group.
Three months after concluding its IPO, the Sioux Falls-based company already has acquired three properties—with more deals in the pipeline and an ambitious growth plan in place.
Following the three acquisitions, Summit owns 68 properties with 6,888 guestrooms.
“The IPO was more of a transaction than evolution for us,” Hansen said. “It gave us a chance to de-lever the balance sheet, and it gave us capital to execute on the strategy we’ve employed for almost 20 years.”
Following a high-octane 2010, New York’s hotel industry performance is lagging while new supply continues strong, writes Shawn A. Turner, finance editor, and Stacey Higgins, international news editor for HotelNewsNow.com.
Year-to-date through March, New York’s occupancy slipped 2.6% to 70.2%, average daily rate is up 4.6% to US$197.29, and revenue per available room ticked up by 1.9% to US$138.45, according to data from STR, the parent company of HotelNewsNow.com.
All of those metrics are down when compared to the market’s 2010 performance. Last year, occupancy was up 5% to 81%, ADR increased by 7.5% to US$232.60, and RevPAR jumped 12.9% to US$188.38.
One factor behind the muted performance this year is an uptick in supply. New York City added 37 hotels with 5,638 rooms in the past 12 months—more than any other top U.S. market.
New York also has the largest active pipeline in the United States. As of April, New York has 173 hotels with 20,650 rooms in the active pipeline, according to STR/ McGraw-Hill Construction Dodge. If everything planned to open in 2011 comes to fruition, this would be a 4.2% increase in supply for the market.
The Hotel Chelsea—subject of numerous transaction rumors recently—has an official buyer. New York real-estate investor Joseph Chetrit, who previously upgraded the Empire Hotel, has signed a contract to purchase the hotel for more than US$80 million, according to a report in The Wall Street Journal.
The newspaper initially reported last month the landmark property was under contract, but the buyer's name remained a mystery. Property investor Aby Rosen, singer Marc Anthony, hoteliers Ian Schrager and André Balazs were reportedly among interested parties.
Forrester Research estimates that, in 2011, hotels will produce US$27 billion in online sales from U.S. leisure and unmanaged business travelers, according to a news release from VP and Principal Analyst Henry H. Harteveldt.
Harteveldt says that number could be much bigger. “To optimize selling performance, travel eBusiness pros should examine the relevancy, visibility and usefulness of their sites' basic functionality in areas like navigation, planning, and mobile and embrace innovative, relevant functionality in planning, purchasing, and social media that can contribute to greater growth,” he said.
Both realized losses and delinquencies in commercial mortgage-backed securities increased notably in April, according to Fitch Ratings’ most recent U.S. CMBS Market Trends report.
CREL CDO asset managers reported approximately US$164 million in realized losses from the disposal of defaulted and credit impaired assets in April, which is substantially higher than last month’s total of US$73 million, the report said. In total, CREL CDO realized losses total approximately 9% of par.
CREL CDO delinquencies rose to 14.8% in April from 14.1% in March, according to the latest index results from Fitch Ratings. “The CREL CDO delinquency rate is likely to fluctuate between 13% and 16% for the remainder of the year as asset managers continue to resolve troubled assets," said Director Stacey McGovern. While 18 assets fell out of the index through resolution at a loss, payoff or extension, more assets became delinquent.
Compiled by Jason Q. Freed.
