St. Louis achieved the largest occupancy and revenue-per-available room increases during the week of 13-19 May, according to data from STR, parent company of HotelNewsNow.com.
The market’s occupancy rose 13.8% to 74.1%, its RevPAR grew 16.7% to $66.09 and its average daily rate was up 2.5% to $89.23.
Overall, the U.S. hotel industry’s occupancy ended the week with a 1.1% increase to 66%, ADR increased 3.2% to $106.55 and RevPAR jumped 4.3% to $70.33.
San Diego achieved the only double-digit ADR increase, up 11.1% to $130.41.
A group led by Paulson & Company plans to sell the Arizona Biltmore Resort in Phoenix and the Claremont Hotel Club & Spa in Berkeley, California, as part of an effort to bring the properties and two other hotels out of bankruptcy, according to a Bloomberg report.
Paulson, a New York-based hedge fund, and co-investor Winthrop Realty Trust, are marketing the Arizona Biltmore with an opening price of $425 million, and the 279-room Claremont Hotel starting at $80 million, according to two people familiar with the plans.
The Paulson group placed the hotels and three others in bankruptcy last year after seizing them in a foreclosure auction. Two of the properties, Grand Wailea Resort in Hawaii and La Quinta Resort & Club in California, might also be sold as the group seeks to remove the resorts from bankruptcy, said Michael Ashner, chairman and CEO of Winthrop.
“We are at a point in the process in which we are considering a reorganization in which we would retain ownership of the Grand Wailea and La Quinta, or an alternative approach in which we would sell the Grand Wailea and La Quinta and bid as a stalking horse,” Ashner told Bloomberg.
Equity players with access to capital for projects in Latin America have various ways of securing financing, but still find it difficult to find lenders willing to finance hotel deals, writes HotelNewsNow.com’s Jeff Higley.
Speaking during the Hotel Opportunities Latin America Investment Conference earlier this month, hotel executives said they are placing a lot of emphasis on assets in the region as they look to expand. But, like the rest of the world, the road is a little bumpy.
Homi Vazifdar, managing director for Canyon Equity, which owns and/or operates six luxury boutique hotels, said lenders don’t even want to look at most hotel opportunities.
“The institutional bucket and high net-worth bucket is where you go to raise money—even during the recession there was still liquidity in the market,” he said. “The problem folks like us faced is even if we raised the equity or deployed our own equity, then what? Bankers have run for the hills. The equity is burning a hole in people’s pockets. There are a lot of equity houses in the United States that can’t deploy (capital) because of the lack of debt.”
“Today you look at a resort model, and if you (desire) a return of 15% to 20% you can find private equity,” he said. “The problem is debt, debt, debt.”
When STR increased its RevPAR forecast for the year to 5.5%—expected to be fueled by ADR increases of 4% and demand increases of 2%—the number seemed a bit less optimistic than other data collectors and analysts.
Why is the STR forecast decidedly lower? Jan Freitag, STR’s senior VP of global development, outlines a three-part answer in a blog today.
First, STR’s chain-scale forecast tracks guidance; second, independents hotels underperform the industry and bring down STR’s forecast; and third, STR does not believe—yet—in meaningful group ADR growth.
In the week ending 19 May, the advance figure for seasonally adjusted initial claims was 370,000, a decrease of 2,000 from the previous week, according to the U.S. Department of Labor. The four-week moving average was 370,000, a decrease of 5,500 from the previous week.
The advance seasonally adjusted insured unemployment rate was 2.6% for the week ending 12 May, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending 12 May was 3.26 million, a decrease of 29,000 from the preceding week's revised average of nearly 3.29 million.
Compiled by Jason Q. Freed.