Hotel Investors Sidestep Omicron

take the change

Hotel companies, developers and investors all indicated this week in their various deals that they are all taking a long look at the hospitality industry. Omicron and the rest of the pandemic is a peek into the timeline of building and expanding the brand.

Cameron Spirans

Here’s a sample of what the Daily Lodging report had for its readers last week. If you’re not a subscriber, you should be. do not wait. Subscribe now here.

Sunday December 12

css Trump International Hotel and Tower Vancouver It reopens sometime in 2022. The Daily Hive Urban has confirmed that the luxury hotel’s Second Life will carry the brand. Paradox Hotel, a new international hotel chain, which also plans to open locations in Phuket, Thailand and Singapore in 2022. Paradox Hotel is also an operator Summit Lodge Boutique Hotel. Summit Lodge and the former Trump-branded tower are owned by Holborn Group. It is not clear if Paradox is a new hotel division in Umm T Global Berhad, which is closely related to the Holborn Group under the same ownership and leadership. Holborn Group opened the Trump-branded Vancouver hotel in February 2017, with TA Hotel Management, the Canadian subsidiary of TA Global Berhad, operating the hotel. The hotel was permanently closed in August 2020 due to the effects of the pandemic, with TA Hotel Management declaring bankruptcy. The 63-storey tower contains 147 guest rooms, amenities and a ballroom on the first 15 floors and 217 luxury residences on the upper floors.

Skift Note: Another Trump hotel finds new life (and brand). At what point does capsular bleeding stop?

Monday December 13

Hilton And Jin Jiang International about the extension Hampton by Hilton Management license agreement, to extend the contract to 2034 to build a network of more than 600 Hampton by Hilton hotels in China. The exclusive license agreement between Hilton and Jin Jiang to push It was first signed in 2014. The extension represents a strong collaboration between Hilton and Jin Jiang as they launch a new phase of joint development in an ambitious plan to operate more than 600 Hampton by Hilton hotels in China. 155y Hampton in China opened in Beijing on December 7y. There are more than 355 Hampton by Hilton hotels under development in China.

Skift Note: Asia, and particularly China, already has a grip on Hilton’s future development pipeline. Expect more deals like this for other Hilton brands.

Tuesday 14th December

MGM Resorts And Hard Rock International Announced a deal for Hard Rock to buy operations The Mirage Hotel and Casino on the LV Strip for $1.075 billion in cash. In essence, Hard Rock will take over the long-term lease with VICI . Characteristics The basic annual basic rent is $90 million a year. Hard Rock will license the Mirage brand for three years while it begins to relocate the property to the guitar-shaped Hard Rock property on the LV Strip. VICI may fund up to $1.5 billion for the Mirage redevelopment plan through VICI Partner Property Growth Fund. Analysts described the price as higher than expected, once again showing the appetite for LV Strip assets. Add to that the news last night that Las Vegas will host the 2024 Super Bowl and LVS without having to rely on conventions and teamwork is reflected in that value. MGM continues to add what is surplus cash stock.

Skift Note: Las Vegas casino resort ownership is starting to look a lot different than in the past. Established players such as MGM Resorts park are resources that were once reserved for property ownership in online gaming and newer gambling destinations.

Wednesday 15 December

Demonstrated average daily rate gains and a 35.1% year-over-year increase in hotel occupancy in the third quarter The demand for hotel accommodations in the US continues to face the delta variable. The continuous improvement in domestic travel and the undoing of many international travel restrictions has resulted in CBRE To revise its outlook significantly in the short and medium term. RevPAR is now expected to reach nominal 2019 levels by the second half of 2023, instead of 2024, as previously forecast. still Variable Omicron and ongoing concerns about the pandemic continue to discourage business, conferences, and large group travel. CBRE expects these categories of travel to accelerate in the latter half of 2022. Going forward, existing hotels will benefit from below-average new construction deliveries, as the cost and availability of construction inputs, including labor, will limit supply growth to 1.2 % to 1.3% through 2025. This is well below the long-term average of over 2%.

AAA He predicts busy roads and skies, with air travel nearly tripling through 2020. More than 109 million people, nearly 34% more than in 2020, will travel 50 miles or more when they hit the road, board planes, or take other transportation out of town. Between December 23 and January 2, a dramatic recovery, with an additional 27.7 million people traveling, will push this year’s numbers to 92% from 2019 levels. Airlines will see an 184% increase from last year. Road trips remain the best way to travel during the holidays, with more than 100 million planning to head to their destinations in cars. More than 6 million people are expected to travel by air, while 3 million people are booking buses, trains and cruises. Booking data from AAA through October shows that theme parks, beaches, and Las Vegas are popular locally. According to AAA, travel prices go up this holiday season. A recent analysis of AAA’s flight booking data revealed that ticket prices for Christmas Week are up 5% from last year. Mid-range hotel rates are up 36% for AAA-certified hotels for Christmas travel; The average car rental rate increased by 20% for Christmas travel.

Skift note: Omicron will moderate an expected winter recovery for business travel, but backtracking on border closures may mitigate the impact of this expected pickup in speed. The growing demand for leisure travel and the US’ avoidance of any domestic travel restrictions will continue to make the country a world leader in hotel recovery.

Thursday 16 December President James Liang believes that international Chinese travelers will likely return to their old travel habits and preferences once borders are reopened. He expects China to start reopening its borders to the world in the middle of 2022. While it may pull things out of the blue, by the end of the third or fourth quarter, it will be back to normal and once the borders are fully open, we will see pent-up demand for travel Out of China for sure. Liang should have a crystal ball to say things like those when the first omicrom cases were reported in China, and everyone there is preparing for lockdown to try to eradicate Covid before the Winter Olympics in February. Liang is confident that popular destinations of choice in the pre-pandemic period will see a very strong rebound – including Japan, Thailand, South Korea and Macau. The epidemic taught the Chinese what they could do locally and saw the spread of small groups or private groups of tourists, as opposed to large tour groups of 30-40 people. He noted the presence of a single gloomy cloud, referring to the blacklist of Chinese tourism. Presumably, the Chinese government has a list of countries that have been identified as targeting Chinese citizens for gambling. While Beijing has acknowledged this list, no one really knows what countries it is on.

Skift note: China detected its first case of Omicron this week, so take any expectations for a recovery seriously. But if the reopening of China’s international borders ends in mid-2022, it will be very difficult to find a hotel room in some of the world’s largest cities.

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