When IREFAC talks, hotel executives listen. Fortunately, the message was mostly positive during the closing general session at the NYU International Hospitality Industry Investment Conference, reports HotelNewsNow.com’s Jason Q. Freed.
Members of the Industry Real Estate Financing Advisory Council said hotel financing is back for nearly all project types, but they advised attendees to be flexible and patient. It still can be challenging to get deals done because many bankers view hotel real estate as too risky, First Fidelity Companies’ Michael Murphy said.
There are more acquisition opportunities on the market than people think, however, according to Strategic Hotels & Resorts’ Laurence Geller. In urban markets, the bid-ask spread is narrow. In the resort segment, it’s still spread wide.
And for those looking to grow from the ground up, debt financing for new construction is finally beginning to loosen—provided you have the right relationships, panelists agreed. New-construction financing is being secured mostly in primary markets. In secondary and tertiary markets, financing can only be secured “off signatures,” or between partners with close relationships, Murphy said.
Speaking of deals, here’s a whopper: Sunstone Hotel Investors announced Wednesday it entered into a purchase and sale agreement to sell the 284-room Marriott Del Mar in San Diego for a contractual purchase price of $66 million, or $232,000 per key. The deal’s expected to close around 30 June.
Sunstone also announced the completion and rebranding of the previously announced acquisition of the 417-room Wyndham Chicago into the Hyatt Chicago Magnificent Mile. The total transaction cost was $88.4 million.
The Houston hotel market topped U.S. performance results for the week ending 2 June, according to HotelNewsNow.com parent company STR. The city’s occupancy rose 23.1% to 64.6%, its average daily rate increased 13.2% to $93.24 and its revenue per available room grew 39.3% to $60.20.
Overall, the U.S. hotel industry’s occupancy ended the week with a 1.9% increase to 59.6%, ADR increased 3.9% to $100.49 and RevPAR jumped 5.9% to $59.87.
Among the chain-scale segments, the luxury segment experienced the largest increases in all three key performance metrics. Its occupancy increased 3.6% to 66.4%, its ADR was up 4.3% to $251.29 and its RevPAR rose 8.1% to $166.77.
U.K. holiday makers aren’t letting a little macroeconomic uncertainty get in the way of travel. According to a new report from Kantar Media Compete (available for download here), 90% of U.K. online shoppers are planning a trip sometime in 2012—up from 82% during 2011—and many are looking to keep their budgets low.
When shopping online for travel, 54% visited Travelodge and 52% visited Premier Inn. By contrast, the Hilton Worldwide and Marriott International websites both saw visits from only 10% of consumers.
A handful of macroeconomic indicators to keep your eye on Thursday:
- Faced with a sharply slowing economy, weak exports and faltering investment, China unexpectedly announced late Thursday it would cut interest rates by a quarter of a percentage point, reports The New York Times.
- European stocks were expected to start positively Thursday on hopes that central banks will, sooner rather than later, introduce some form of monetary stimulus to solve the eurozone's current crisis and boost flagging economies, reports The Wall Street Journal. Hopes were boosted after European Central Bank President Mario Draghi said markets were underestimating political leaders' commitment to addressing the euro crisis.
- The advance figure for seasonally U.S. adjusted unemployment insurance claims was 377,000 for the week ending 2 June, a decrease of 12,000 from the previous week’s revised figure of 389,000. The four-week moving average, however, reported a gain of 1,750 from the previous week’s revised average of 376,000.
- U.S. stocks pared some earlier gains as investors weighed testimony by Federal Reserve Chairman Ben Bernake against earlier comments from Federal Vice Chairwoman Janet Yellen, according to The Wall Street Journal. Dow Jones Industrial Average climbed 83 points, or 0.7%, to 12501, rising on the heels of its biggest one-day advance of the year Wednesday. Standard & Poor's 500-stock index futures advanced eight points, or 0.6%, to 1322 and Nasdaq-100 futures rallied 12 points, or 0.4%, to 2856. Changes in stock futures don't always accurately predict stock moves after the opening bell.
Compiled by Patrick Mayock.
