HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s review covers the Americas.
Americas pipelines continue to decrease
In the United States, the total active hotel development pipeline comprises 2,716 projects totaling 290,989 rooms, according to the February 2012 STR/McGraw Hill Construction Dodge Pipeline Report. This represents a 5.6% decrease in the number of rooms in the total active pipeline compared to February 2011. STR is the parent company of HotelNewsNow.com.
In Central and South America, the hotel development pipeline comprises 213 hotels totaling 30,657 rooms, according to the February 2012 STR Global Construction Pipeline Report.
Among the chain-scale segments, the midscale segment accounted for the largest portion of rooms in the total active pipeline with 23.9% and 7,336 rooms.
In the Caribbean and Mexico regions, the hotel development pipeline comprises 128 hotels totaling 17,616 rooms, according to the February 2012 STR Construction Pipeline Report.
Among the countries in the region, Mexico ended the month with the most rooms under construction, reporting 4,771 rooms.
Negative meetings rhetoric back in spotlight
More reports of lavish spending in Las Vegas—this time from the federal government—couldn’t come at a worse time for the U.S. Travel Association, which last month embarked on a 20,000-mile nationwide bus tour to combat negative rhetoric about the meetings industry that’s still lingering from 2009 for its Vote Travel campaign.
Blain Rethmeier, senior VP of public affairs for the U.S. Travel Association, spoke on a conference call in early April as the Vote Travel tour bus left the Navy Pier in Chicago and headed to the Mall of America in Minneapolis. He said the bus already was touring the U.S. when news came Monday that the head of the General Services Administration resigned after reports of inappropriate spending at the agency’s 2010 conference outside Las Vegas.
Rethmeier said the report will not deter U.S. Travel’s efforts to emphasize the importance of business meetings to the travel industry and the overall economy, although he added it could lead to more travel cuts by companies who want to avoid the stigma.
Hyatt will open Hyatt Place in Bayamon, Puerto Rico
A Hyatt Hotels Corporation affiliate signed a management agreement with an affiliate of Island Hospitality Partners for Hyatt Place Bayamón and El Tropical Casino. It will be the first Hyatt-branded select-service hotel in Puerto Rico and, upon opening, will mark the return of Hyatt-branded hotels to Puerto Rico after a nine-year absence.
Hyatt Place Bayamón and El Tropical Casino, expected to open during the first quarter of 2014, will be a seven-story building offering 156 guestrooms with an adjoining casino, free-standing restaurant and bar, and a multilevel parking garage with space for 250 vehicles.
More adults taking leisure trips
The share of U.S. adults taking a leisure trip edged up to 69% in February compared to 68% a year earlier, according to the “Travelhorizons Quarterly Report” by MMGY Global and the U.S. Travel Association.
Looking at intentions 56% of adults in the U.S. reported they plan on taking a leisure trip in the next six months. This is lower than the 59% who answered similarly in February 2011 but the same as February 2010.
As for business travel, after falling from 39% in February 2008 to 24% in February 2011, the share of U.S. adults who took a business trip in the 12 months ending in February edged down to 22% in February 2012.
Business travel intentions for the next six months remain essentially flat compared to a year earlier (15% versus 16%), indicating that economic growth will likely be moderate in the near term.
Thriving Brazil attracts investor interest
Brazil is among the world’s 10 largest economies and is Latin America’s strongest economic force by a wide margin. Solid macroeconomic policymaking during the past 10 years and the government’s commitment to structural reform have led to significant rebounds in investor sentiment, according to HotelNewsNow.com contributors Clay Dickinson and Roberta Oncken. The country’s long-term growth potential is generating considerable interest among property investors.
A contrast to the underwhelming economic growth in Western Europe and the U.S., Brazil provides a more upbeat picture, with economic growth during the next several years to be twice as high. With approximately 195 million inhabitants, Brazil is the world’s fifth most populous country. Not to mention, 40 million residents joined the middle class during the past five years.
The country’s revenue per available room marked double-digit growth during 2011 and is expected to continue to rise at a similarly high level during 2012 as strong economic growth, a rapidly increasing middle class and healthy inbound tourism levels—all amid constrained supply—combine to produce solid operating fundamentals.
Hilton Hotels & Resorts will open two in Latin America in 2012
The explosive economic growth in Latin America has seen business and leisure travel drastically increase in the region both from within South America and North America. In conjunction with this growth, Hilton Hotels & Resorts is opening two properties in Latin America in 2012, and recently welcomed Hilton Bogota located in the capital city of Colombia. Upcoming hotel openings include Lima, Peru, and an all-inclusive resort in Puerto Vallarta, Mexico.
The Hilton Lima Miraflores is scheduled to open during the third quarter of 2012; and the Hilton Puerto Vallarta also is scheduled to open in the third quarter 2012 as an all-inclusive resort.
The Hilton brand’s Latin American expansion is led by the Hilton Bogota, situated in the heart of the financial district and near the renowned “Zona G” dining and entertainment quarter.
Hilton Worldwide, parent company of Hilton Hotels & Resorts, has 46 hotels and resorts in Latin America and is expanding with a robust development pipeline that includes properties in Argentina, Brazil, Colombia, Mexico, Panama and Peru.
Investors give college towns high marks
Universities and colleges have always been a unique driver of demand for hotels, and with the sting of a deep recession still throbbing, investors are finding hotels near a steady demand driver that much more appealing.
“What’s attractive to companies about college towns—especially coming off such a bad couple of years and going through a downturn like that—you like to stay around the markets that are more stable,” said Roy Kretschmer, executive VP of operations for Valencia Group, which recently debuted a roadside hotel concept targeting university markets in the Southeastern U.S.. “Government business, medical business, educational business—that demand is not so cyclical. It’s pretty consistent, and you’re not going to see big cycles where there are huge demand peaks and valleys.”
Parkside rebrands Whistler Resort & Club
Parkside Hotels & Resorts has rebranded the Parkside Whistler Resort & Club in Whistler, British Columbia. The 40-room hotel seeks to upgrade its local, regional and national market position through its affiliation with the Parkside Hotels brand designation.
Atlantic City market betting big on Revel
Revel, a sprawling beachfront resort, marked its “preview opening” in early April, providing hope this historic vacation city can become more of a Las Vegas-type destination and overcome challenges from nearby gaming venues that have diminished the city’s tourism and revenue prospects.
“You can see and feel the excitement and energy building in town,” said Jeff Albrecht, GM of the Sheraton Atlantic City Convention Center Hotel. “We need to focus on customers who come for a few days for a lifestyle experience and not just day players. Everyone is raising the bar on quality, and Revel will really help us kick-start our comeback.”
Revel will hold its grand opening 25 May, with the first performances by Beyoncé since her first child was born earlier this year. All of the hotel’s 1,898 rooms and many of its facilities are available, but more restaurants and other facilities will open during the next several weeks.
New Castle will assume ownership of Algonquin
New Castle Hotels and Resorts has entered into a joint-venture purchase of the Algonquin Resort with Halifax, Nova Scotia-based real-estate developer Southwest Properties The luxury resort, located in St. Andrews by-the-Sea, New Brunswick, was purchased from the provincial government of New Brunswick, which has owned the historic hotel since 1971.
“The Algonquin Hotel & Golf Course has been owned by the provincial government for 40 years, and the iconic resort facility has served visitors for more than a century,” Trevor Holder, New Brunswick’s culture, tourism and healthy living minister, said in a news release. “It continues to have enormous tourism appeal and potential, however, it is in need of refurbishment and a new marketing approach. The time has come to place it in the hands of an experienced team of new managers who have solid turnaround success credentials within the tourism destination industry.”
Super 8, Wyndham Garden will debut in Brazil
Wyndham Hotel Group has entered into an agreement with Brazilian real-estate company EmCorp to launch the Super 8 and Wyndham Garden brand offerings in Brazil.
The agreement calls for 3,000 guestrooms to be developed in the country through 2014. Six deals have been finalized to open Super 8 hotels in Congonhas do Campo, Sete Lagoas, Betim, Lagoa Santa and Pouso Alegre, with additional agreements anticipated to be executed this year.
Red Lion to explore 'strategic alternatives'
Red Lion Hotels Corporation has authorized Bank of America Merrill Lynch to explore strategic alternatives to maximize shareholder value, including a potential sale of the company or a strategic combination with a third party. The board has formed a Strategic Alternatives Committee comprising independent directors to work with Bank of America Merrill Lynch in its review.
"The Red Lion Hotels board of directors and management team are committed to maximizing shareholder value," Jon E. Eliassen, president and CEO of Red Lion Hotels Corporation, said in a news release. "We have been working with Bank of America Merrill Lynch since mid-February, and authorizing the exploration of strategic alternatives, including a potential sale of the company, demonstrates our commitment to achieving this important objective. Our board and management team are open minded about the process and intend to evaluate all options thoughtfully and carefully."
Ascend Collection adds first gaming resort
The Ascend Collection membership program from Choice Hotels International has added its first casino hotel, Cadillac Jack’s Gaming Resort, in Deadwood, South Dakota.
The 103-room, full-service hotel is located in the heart of Deadwood. Membership in Ascend Collection grew 35% in 2011.
Spring break hotel markets: Winners and losers
Certain destinations have developed a reputation for hosting the best spring break bashes in the world. U.S. News (the same group that puts together reputable rankings of universities and hospitals) lists the following 12 locales as providing the best combination of sun, fun and affordability.
1. South Padre Island, Texas
2. Miami Beach
3. Cancun, Mexico
4. Puerto Vallarta, Mexico
5. Puerto Rico
6. Bahamas
7. Cabo San Lucas, Mexico
8. Jamaica
9. Playa del Carmen, Mexico
10. Daytona, Florida
11. Punta Cana, Dominican Republic
12. Puerto Plata, Dominican Republic
Key openings, transactions
• A three-hotel portfolio featuring 1,422 guestrooms sold for $262.5 million from DiamondRock Hospitality Company to Inland American Real Estate. The hotels involved in the deal are: the 409-room Griffin Gate Marriott Resort & Spa in Lexington, Kentucky; the 521-room Renaissance Waverly in Atlanta; and the 492-room Renaissance Austin in Austin, Texas.
• The 591-room Fairmont San Francisco sold for $200 million from Maritz, Wolff & Company and Prince Alwaleed bin Talal to Woodbridge Capital Partners LLC.
• Blackstone Group invested approximately $70 million for a controlling stake in the1,015-room Parc 55 in San Francisco. The new deal gives Blackstone a 75% ownership with Rockpoint holding 25%. Highgate Holdings will continue to manage the property.
• The 463-room Conrad New York, owned by Goldman Sachs and managed by Hilton, opened in March.
• The 105-room Out NYC in New York, owned by Parkview Developers, opened in March.
• The 63-room AmericInn Fairfield in Fairfield, Iowa, owned by Apollo Development and managed by Three Rivers Hospitality, opened in March.
