AMHB INDUSTRY NEWS UPDATE…..
November 12, 2018
Marriott, Hilton, IHG Dominate U.S. Construction Pipeline PORTSMOUTH, NH — According to the third quarter report by analysts at Lodging Econometrics (LE), the franchise companies dominating the U.S. construction pipeline with the largest pipelines are Marriott International with 1,380 projects/181,907 rooms, Hilton Worldwide with 1,350 projects/150,698 rooms and InterContinental Hotels Group (IHG) with 939 projects/95,312 rooms.
The construction pipelines for these three franchise companies comprise an impressive 68% of the total construction pipeline projects with Marriott and Hilton again setting all-time highs for their companies.
The leading brands by project count in the construction pipeline for each of these three companies are IHG’s Holiday Inn Express with 422 projects/39,667 rooms, Hilton’s Home2 Suites by Hilton with 401 projects/41,958 rooms and Marriott’s Fairfield Inn with 284 projects/27,678 rooms. These three mid-market brands are so dominant that they alone account for 21% of the projects in the total construction pipeline.
Other significant brands in the pipeline for each of these franchises are: Hilton’s Tru by Hilton with 302 projects/29,245 rooms and Hampton Inn and Suites with 300 projects/31,013 rooms; Marriott’s TownePlace Suites with 207 projects/21,525 rooms and Residence Inn with 204 projects/25,014 rooms; and IHG’s Staybridge Suites with 147 projects/15,427 rooms and Avid Hotel with 142 projects/13,160 rooms.
Expansion in Chinese Market
Shanghai Hotel Opens With Residential-Style Spaces Thailand-based Onyx Hospitality Group has opened its 50th property—Shama Hongqiao Shanghai. Located in the Hongqiao Business District, Shama Hongqiao Shanghai is close to the National Convention & Exhibition Center, Hongqiao International Airport and Hongqiao Railway Station.
With 132 apartments offering a variety of layouts from studio to two-bedroom residences, all units come with high ceilings, providing an extra element of space for both travelers as well as longer stay residents. For the enhanced feel of home, each apartment is fitted with a customized Shama Slumber bed, fully equipped kitchenette, storage space, dual laundry washer and dryer, LED TV with international channels, WiFi internet access and a work desk. Hyatt Expands in Asia With Business District Property Hyatt Hotels Corporation has opened the Hyatt Regency Xuzhou in China’s Jiangsu Province. As the newest global-branded hotel in the city, Hyatt Regency Xuzhou is located at the center of contemporary Xuzhou within the landmark 873 ft. (266 m.) International Finance Center, in Xuzhou’s Central Business District. The hotel has 344 guestrooms including 25 suites, four executive suites and a presidential suite, four dining options and 8,022 sq. ft. (2,445 sq. m.) of event space. The new hotel crowns the uppermost floors of Xuzhou’s tallest tower. Designed by P49, elements of Chinese art, nature and local Han culture enrich the contemporary spaces. It is the only hotel in the five-tower Suning Plaza development featuring high-end offices, full-service residences and entertainment venues. The hotel is also close to High Speed Railway Station and accessible to the city’s major attractions and business districts. LN Garden Hotel Opens in China’s Bay Area LN Garden Hotel, Nansha Guangzhou, located in the Guangdong-Hong Kong-Macao Greater Bay Area, is open. It is designed to provide guests with one-stop destination experiences, within one of the newly established bay areas of China surrounded by mountains, lake, fields and wetlands. The hotel has 365 guestrooms, six international dining options, indoor and outdoor pools, golf course and meeting and event spaces. BEST WESTERN CEO SAYS FUTURE MORE BRANDS….. Appearing in Australia, CEO David Kong, spoke frankly about his continued desire to expand Best Western into a new base away from just Membership. He further indicated the approach is gathering positive results from the established BW Membership base. Kong repeated earlier remarks reminding the public of Best Western launching new brands starting in 2014 with VIB and followed by PREMIER COLLECCTION soft brands. BW has been aggressive since with GL0, SureStay Hotels, and SureStay Plus, and SureStay Collection, along with the Executive Residency in 2016, and BW Signature Collection in 2017. Best Western is very positive regarding future growth in Australia said Mr. Kong in Sydney. BW has 115 independently owned and managed opropoperties in Australia. While speaking to the audience Mr. Kong favorably voiced Best Western’s interest in owning more hotels as their base of distribution grows both in USA, but also other Countries. The Company’s current Member base is voting this year on changing from the Membership base of Owners to stock base. As an incentive Best Western is offering each current Member sizeable number shares of stock in the new Stock platform.
July 9, 2018
MARRIOTT ANNOUNCES FIRST HOTEL PURCHASE IN FIVE YEARS ! American Motel Hotel Brokers Network, Phoenix Headquarters, relates that Marriott’s ‘first’ real estate purchase in five years occurred as June was coming to an end. Marriott International confirmed they made their first hotel real estate purchase in last five years when they bought The Sheraton Grand Phoenix Hotel for $255 Million Dollars. The $255,000, per key price does not reflect the major renovation Marriott will be undertaking. The ‘down town’ Phoenix hotel will benefit from the rejuvenation of the 1000 guest rooms and the public space. Goal is to transform the Hotel into “today’s prize model” of Sheraton Brand. Arne Sorenson, President and CEO, Marriott International pictures “the hotel as providing a living and breathing showcase of our new vision for the Sheraton brand, underscoring our commitment to restore the brand to its leadership position” | US – CHINA TRADE WAR….”CONSEQUENCES” ! Really little Hotel Investor reaction to President Trump’s first new tariff policy on China. Financial markets also were not shocked. When US enacted the $34B in tariff’s against certain China goods, the markets were expecting it. Currently another $16B of tariffs being reviewed. Again, no negative response from our Hospitality/Lodging Industry to date. However, if the Trump administration needs to implement another sizeable tariff and the “trade war” escalates, some within our Industry, and well as the US Financial Markets, do not know at this time the indirect impact on Hotels, but are showing some concerns that such could lead to a decline in the US Financial Markets including Hospitality/Lodging.
July 10, 2018
NEW PRESIDENT OF MEXICO …..MANUEL LOPEZ OBRADOR ! Former Mexico City Mayor Lopez Obrador became Mexico’s new President for next 5 years and 10 months. Obrador was the first Candidate since 1988, that won by an outright majority. Besides his purposes of correcting security concerns across Mexico he promised major changes in economic goals. This includes building more hotels, and renovating some of Mexico’s showcase of hotels that have been ‘mistreated’ badly in the recent years of unrest in Mexico. Mr. Obrador targets a government that will enable socialization, productivity and personalization featuring elaborate venues and technology that enable unique experiences for the people of Mexico…..and the return of visiting guests especially from America .
July 11, 2018
AMERICAN MOTEL HOTEL BROKERS NETWORK CREATES 360 DEGREE PANORAMAS ! AMHB Network, America’s oldest, continuous Hospitality and Lodging Company is adding another Major Marketing Feature for both its Sellers (Owners), and it’s Buyer (Clients). Mike Sprinkle, Chairman and CEO of this 48 Year, Eleven Billion Dollar Brokerage Network, announced today, “American Motel Hotel Brokers, and it’s nationwide Member Broker base, is launching the First, Creative augmented and virtual reality platform for our tens of thousands Clients. Beautiful 360 degree Virtual Tours with the VR Editor using panoramas capturing the true experience of ‘being within the Hotel’ and ‘on its grounds’ which gives the purest feel of the Hotel being offered For Sale.” AMHB Network’s Marketing team’s deadline for entry into the market is July 30!
Industry News…. BANKS EAGER FOR HOTEL LOANS ! The timing is ready for borrowing cash from banks. Troy Miller of Starwood Property Trust spoke to Hotel and Lodging stating, “It’s time…If I am a borrower. You borrow all you can borrow right now.” Hoteliers are in concurrence with the Banking Industry that with lending rates ready to rise, now is the time to Buy or Refinance. According to industry bankers who also cite rising interest rates, banks are in fact prepared to lend at once on refis and hotel acquisitions.
May 1, 2018
Hyatt is Contemplating Changing Group Commission Policy…… Mark Hoplamazian, CEO of Hyatt, announced at the World Travel & Tourism Global Summit that Hyatt is considering lowering its rate on group commissions because of several factors. Marriott lowered its group commission rate from 10% to 7% for North America bookings last month, and Hilton will follow suit in October.
Airbnb is Forcing Everyone to Up Their Game: How Hotels are Changing Tack….. There are multiple ways hotels can compete with Airbnb, such as targeting a different audience and offering excellent service. According to a report by Morgan Stanley, 42% of Airbnb users have replaced traditional hotel stay with an Airbnb property.
NEW AMERICAN TAX LAW CAN REALLY BENEFIT INVESTORS…BOTH THE SELLER AND THE BUYER ! Tax Specialists including CPA’s see the new American Tax Law as a real prize for Hotel investors….both Sellers, and, Buyers !
Here are a few basic examples. American Motel Hotel Brokers strongly recommends before acting one should consult with their CPA, or other Tax Advisor. The Tax Law has more Depreciation Options. One really big option is the “Bonus Depreciation”. There is a 100% “depreciation bonus” on acquisition of existing assets. This Bonus is in effect until year 2022. Previously there were some laws favoring ‘new built’ bonus depreciation, but now for next few years can also be used on new acquired Hotels. There is a 20-% deduction of ‘Pass Through’ income that Partnerships such as LLC and Real Estate Investment Trusts can achieve. The 1031 can now be moved from just ‘asset to common asset’. May now also be used to defer taxes on Investments gains in ‘other forms of real estate’ via referred to “opportunity zones”. New Equipment can now be covered immediately as a write off in many instances. The Summation of these new Tax Rules can greatly benefit Hotel Investors that have a good generating cash flow asset, but depreciation has been, or is being, used up. They may now have choices of assets to select new cash flow opportunities and gain new accelerated depreciation.
ARTICLE: MAY 1, 2018
HIGH DEMAND MARKETS FOR BUYERS….CONTINUE TO SHOW GROWTH ! The 2018 Hospitality and Lodging business continues to ‘shine brightly’ in markets serviced by American Motel Hotel Brokers Member Brokerages, reports AMHB Network corporate office in Phoenix. Demand in such markets as Arizona, California, Colorado, Dakota’s, Florida, Georgia Illinois, Kansas, Montana, Nebraska, etc., is actually exceeding the supply of well-priced-well financed Hospitality properties. The earlier fear that a slowdown would occur in 2018, has been mostly erased. Based on the hundreds of calls received daily, Bruce Barnes Vice President of AMHB’s Development Department reports, buyer demand is equal to, and in most instances, greater than 2017. Barnes’ went on to say that due to fact that AMHB Network has continuous conversation with their Members, he has ‘1st hand’ facts regarding Buyer demand. Because of this, American Motel Hotel Brokers Network Members have been especially active in acquiring ‘New Product’ to Offer the Buyers contacting AMHB. Today the Inventory is turning over more quickly than the prior two calendar years. To further support these facts, AMHB Network Research Staff has found all year a continuing upward trend in Occupancy, Rate and Revenue Per Room at Hospitality and Lodging properties.
INDIA HOTELS CONCERNED…. Luxury hotels in India fear business drop from 28% Tax assessed to luxury hotels in India. Many expect stiff declines in inbound tourism that will hurt hotel’s growth reports India’s The Economic Times.
BLACKSTONE AND SPAIN’S HISPANIA…. Blackstone is preparing to make a full takeover bid for the Spanish property group Hispania. Hispania is valued at approx.. $2.3 Billion (American). Blackstone is reportedly offering to purchase 16.65 % of Hispania stock for $386.1 Million (American).
NEW RETAILER HOTEL TREND…. Japanese homeware and lifestyle brand Muji, and brewer BrewDog are opening new branded hotel space. These are examples of a new Hospitality sector trend. Laura Ashley, already ventured into hotel retailing, is opening additional locations in Middle East and the Asia Pacific.
CHINESE TRAVELERS CAN NOW USE DIGITAL PAYMENT…. Millennium Hotels in partnership with digital payment platform, Alipay, now offers travelers from China the ability to book and pay for hotel rooms and misc. services at their Hotels. Alipay has more than 600 million Chinese users.
AMERICAN STATISTICS UP ACROSS THE BOARD…. From STR Reports, week March 4 – 10, US Hotel occupancy increased by 1%….to 68% average; ADR up 2% to $131.46; and, RevPar rose 3.1% to $89.53. American Motel Hotel Brokers Network from their recent sales and new Listings of over 30 for January and February agree that rates and occupancies are trending upward. With the expected increase of Bank Lending, Mike Sprinkle, AMHB Network Chairman and CEO feels, following the anticipated changing of some aspects of Dodd Frank banking regulations, travel will continue to grow in 2018.
EXPECT LARGE INCREASE OF FAMILY TRIPS THIS YEAR ! Based on AMHB Network Research Department, research indicates from study that 88 million are planning “family trip” in 2018. These 88 million Americans plan to take FAMILY vacations this year. According to AAA Travel, 44% of millennials are planning a family getaway. This is actually more than the members of Generation X that stand at 39%; or the baby boomers at 32%. As families have done for prior generations, these family oriented trips are the one time in many families ‘to be together’. Therefore, hospitality and lodging are main events in planning the trips.
EXPECT BANK LENDING TO EXPAND….. Eased Bank lending rules should increase given this week’s banking changes….including spreading into smaller Regional banks……
LIVE PLANTS KEEP HOTELS VIBRANT….. Top hotels in America are keeping their public spaces more vibrant with live plants American Motel Hotel Brokers Network learns from outside reports. Top hotels, though more expensive, are finding that using live plants in public areas are receiving very positive comments from their guests. The overall guest experience, is well worth the cost of the upkeep. Comments,and return reservations, further support this friendly amenity.
IF IT WALKS LIKE A DUCK….AND QUACKS LIKE A DUCK !!!!…… Miss Ricca, Editor, writes that the ‘new’ Airbnb is looking more and more like a hotel company. What will ‘you’ do about it?
THE FUTURE OF HOSPITALITY/LODGING ! That future lies squarely in hospitality companies and management employing advanced technologies land solving marketplace challenges. This will be done in ways that exploit their competitive advantages….their people, says Mr. Kerry Ranson, HNN columnist. In doing this, Mr. Ranson states, the challenge is to attract quality individuals to tour organizations which will foster the genuine experiences that guests savor.
“SHRINKING ROOMS GIVE WAY TO MEETING SPACE…..” Construction Dive reports that today’s hotel makeover tend to downsize the room square footage in favor of more vibrant social spaces, upscale retail, and more usable meeting space. In most of these revisions of space usage, experts state that security will command priority.
“PARK HOTEL AND RESORTS EXERCISING PURCHASE OPTION” Park has announced that underwriters are exercising option to repurchase 5,171,929, additional shares of common stock. This repurchase option comes on the heels of a secondary offering to shareholder HNA Tourism Group
TIDBITS : Hospitality Owners and Executives of publicly traded companies and Investment Trusts concur that 2019 will see increases in dollars spent on renovation and group travel.
USA HOTEL TRANSACTIONS & PRICE PER ROOM UP….
Contrary to early Spring, 2018, reports, Hotel Transactions have enjoyed a pleasant surprise. Number of Transactions rose 11.3% during first half compared to same time 2017.
Jan – June – 2017: $9,084,012,000 Transaction Dollar Volume
Jan – June – 2018: $10,112, 740,000 Transaction Dollar Volume
2017 Price per Room was at $196,000.
2018 Price per Room was at $220,000
Florida and New York were the busiest states for overall transactions at 24 and 20.
*as reported by STR Hotel Transaction Almanac
AMERICAN MOTEL HOTEL BROKERS NETWORK TRANSACTIONS “BEAT” PROJECTIONS …..
With the addition of New Member Offices in California, Louisiana, Texas, Georgia, Florida, Illinois total sales transactions increased to 24% over beginning of 2018 projected goals. The Company’s Network and Headquarters increased jobs by over 25%. “The last half of 2018, has started as strongly as the first half ended. Our forecasts for total sales transactions were increased by the Board in late Spring”, commented CEO Mike Sprinkle.
BEST WESTERN INTERNATIONAL FILES TO BECOME “FOR PROFIT”
BW International filed on August 10 with US Securities Exchange Commission that it will convert from a ‘not for profit’ business to become a ‘for profit’ business entity. The Issue will be 55 million common shares, and Best Western has set beginning of December to start the Issue.
USA early August STR indicates Occupancy up 2% to 75%; ADR up 3% to $132; RevPar up 5 % to $99.
Canada reports Occupancy down by 1.3% to 80%; ADR up 1.6% to $139*; RevPar up .3 to $146 (American $111)
* Canadian Dollar
RED ROOF INN ANNOUNCES BRAND EXPANSION
Red Roof is adding two Extended Stay brands to its collection. They are Home Towne Studios; and, Home Towne Suites. The Company intends to launch over 30 properties across more than 20 markets with expected total rooms over 4000.
Q2 STRONG QUARTER AT CHOICE HOTELS……
Choice Hotels reports RevPar increase of 2.7% across the board for Second calendar quarter this year. This increase was stimulated by increases of 2.4% rise in ADR, and a smaller increase of 0.2% in OCC.
BUILDING CONTINUIES IN USA !
STR reports that 190,260 rooms are under construction in United States through July, 2018.
This is up 0.8% year to year. The top five Markets for new Hotel development are:
#1 New York
#4 Los Angeles/Long Beach
UNITED KINGDOM LEADS EUROPEAN BUILDING !
HNN reports that the United Kingdom is Europe’s leading builder of new hotel rooms. They are seeing a 5.8% increase year over year.
MIDDLE EAST AFRICA IS ‘TOPS’ FOR HOTEL DEVELOPMENT INCREASE !
Yes, the United Arab Emirates leads Mid East Africa with an amazing 32.4% increase year over year .
SBA 504 AUGUST 2018 INTGEREST RATE UPDATE….
25 Year Purchase Rate = 5.346%
20 Year Purchase Rate = 5.294%
20 Year Refinance Rate = 5.343%
10 Year Purchase Rate = 5.289%
AMHB ARIZONA OFFICE REPORTS RECORD TOURIST VISITS….
The State of Arizona generated $22.7 Billion from tourist visits last year.
AMHB of Arizona Hotel Brokerage Firm went on to state, “Arizona welcomed American and Foreign visitors who had 43.,9 million overnight stays in 2017. This staggering fact directly supported 187,000, jobs largely within the Hotel and Hospitality industry. The Brokerage Firm went on to say that the number of Hotel Buyers received by their Phoenix office has more than DOUBLED THE LAST SIX MONTHS of 2018.
US Q2 Hotel Performance P/STR…….
United States Hotel occupancy rose 1.1% for Quarter two to 70.2%; ADR increased 2.9% to $131.02; and ‘all important’ RevPAR rose 4% to $91.94.
Europe Q2 Hotel Performance P/STR….
Europe’s Hotel occupancy increased 1.1% to 75.5%; ADR increased to 115.54 European…$135.37 American; and RevPAR increased 4.9% to 87.20 E….$102.17
SBA (Small Business Administration) July Effective Rates…..
20 Yr: 5.254 %….Note rate 3,957%
10 Yr: 5.289%….Note rate 3.308%
20 Yr. Refi: 5.303%…Note rate 3.597%
25 Yr. 5.316% …note rate 3.724%
Rates include fees to CDC, SBA, central service agent
US STATISTICS WEEK END JUNE……
Occupancy: Up .2%…..across America
ADR: Up 3.1%….across America $131.56
RevPar: Up 5.2%…across America $99.57
CANADIAN HOTEL STATS WEEK END JUNE….
Occupancy: Up .2%…..across Canada 74.1%
ADR: Up .6%….across Canada $ 175.46
RevPar: Up .7%….across Canada $130
($ = Canadian Dollar)
AMHB NETWORK JOINS THE FAVORABLE END OF JUNE STATS…..
As the Hospitality / Lodging Industry continues to show very favorable “Statistics”, American Motel Hotel Brokers Network ‘joins the upward spiral’!
AMHB announced today Transactions of Hotels/Motels/Resorts/ Assisted Living Hotel Conversions for first half of 2018 were up over 37 Per Cent. Their Inventory of Properties For Sale now exceeds $600,000,000, from large hotels/resorts at over $100M asking price, to, smaller “starter’, and, ‘upside potential’ properties at $1,000,000, and up.
HOTELIERS BE ALERT ……
HNN reports that as many as 28.5 million hotel stays, representing a cost of $5.2 billion, are direct result of fraudulent phone and online scams since 2017. This is from AH&LA new research study……
US TAX REFORM CAN BENEFIT HOTEL INVESTORS……
Sean McCracken, News Editor, writes that recently adopted tax rules offer some big changes for real estate investors. This comes according to a panel of experts. These changes are largely positive…….
US ECONOMY CONTINUES IT’S GROWTH……
Old news stated US Economy grew 2.3% during 2018, 1st Quarter….however though comparative statistics for Q2 are not yet out, most within the Hospitality/Lodging business experienced continuing Q2 growth also……..
AMHB RESEARCH REACTS FAVORABILY WHILE SOME ‘WONDERING’……
The American Motel Hotel Brokers research team finds continued strong demand for hotel rooms by guests….BUT….also, subject not discussed often is Selling and Buying of Hotels. For 48 continuous years that has been AMHB’s business. This past weekend, early research reports indicate a growing demand for purchasing Hotels/Motels/Resorts. From AMHB Member offices that cover over 50 US markets, every office reported ‘up stats’. Pat Green, 35 year Hospitality/Lodging Broker within the AMHB Network is projecting their Offices largest Sales Year this Decade……
American Motel Hotel Brokers Member Network reports very good success in their recent ‘drive’ to increase Inventory of Hotels for sale. This increased inventory now provides over $500,000,000 of hotels, et al, ready to be purchased. Many markets in the United States need more Hotels for sale to meet Buyer demand. In AMHB Network’s Corporation home state, Arizona, Paul Parashar, Regional Director for a portion of Arizona emphasized recently that the Phoenix, and many surrounding markets, have an abundance of qualified buyers but fewer hotels available for sale at this time. The Arizona Member Agency, AMHB of Arizona, is actively contacting Owners interested in selling.
USA NEW CONSTRUCTION DROPS……
STR reports a 2.2% decline in new Hotel construction compared to April, 2017. Construction of new hotel rooms in USA has declined in 6 of last 7 months.
FRANCE…AT LAST…SEE GROWTH…..
European sources report finally Paris is seeing new hotel supply as the return of travelers grows.
USA HOTEL REVENUES ‘HIT’ $208 BILLION….
from STR comes word that USA Hotel revenues exceeded $208 Billion in 2017. That is an increase of $10 Billion !
CENTRAL/SOUTH AMERICA ‘SLOWS’….ASIA//PACIFIC ‘GROWS’…..
From the HNN Newswire comes word that hotel construction in Central/South America decreased 17.9% in April compared to April 2017. Simultaneously, hotel growth increased in Asia and the Pacific by 27.1% during same period.
ARIZONA ‘BRIGHT SPOT’ FOR JOB CREATION….
Arizona State University in a new forecast writes that the Arizona economy will continue to expand ion 2018, with no recession on the radar ! Jobs will gain, as will population. In 2017, Arizona placed among the top 10 states for job creation, domestic immigration, population growth and other key measures. ASU ended by forecasting further momentum likely this year, and perhaps beyond.
RED ROOF HAS ANNOUNCED their “Red Collection”, John Garry, Franchise Development Director advises.
It is featured as an ‘Upscale Economy’ segment soft brand that is focused as unique hotels that are hper-local and inspired by a city’s vibe and culture.