Analysts signaled they like Hyatt’s push into more leisure-oriented properties after a nearly $2.7 billion acquisition.
Here is a selection of what the Daily Lodging Report has made available to its readers over the past week. If you’re not a subscriber, you should be. Do not wait. Register here now.
Sunday January 16th
STR said the number of US hotel rooms under construction is around 61,000 less than the country’s all-time high reached in early 2020. STR’s December 2021 pipeline data showed rooms under construction decreased -19.2% to 158,906 compared to December 2020, while rooms in final planning decreased -20.6% to 185,231 and rooms in of planning increased by 38.9% to 284,502. STR said that as of January 5, 2022, NYC still leads the pipeline with 15,069 rooms under construction. Las Vegas is second with 5,368.
Skift Note: The construction pipeline may be down from the US all-time high, but the data shows no waning interest in New York City. The death of the Big Apple may have been greatly exaggerated, at least from a developer perspective.
Monday January 17th
accord announced a new signing for its MGallery brand with Shenzhen Longhua Construction and Development Co. Ltd. on. This will be the first MGallery Hotel Collection address to Shenzhen. Shenzhen Dalang – MGallery will be the first international premium hotel to enter the city’s prominent district. The hotel will be located in Dalang, which occupies the northern part of Longhua District. The MGallery will feature 250 designer rooms and suites, an all-day dining restaurant, a specialty restaurant and a gourmet Chinese restaurant with private dining. The hotel features an upstairs executive lounge and lobby lounge, extensive banquet and meeting facilities, a state-of-the-art fitness center, swimming pool and a luxurious spa.
Accor announced that more than 300 hotels and resorts will open worldwide in 2022. Southeast Asia has 14 hotels scheduled to open this year, starting with the 257-room Pullman Lombok Mandalika Beach Resort and the Mercure Rayong Lomtalay. The Pacific region will have three openings beginning with Porter House Hotel, Sydney, MGallery and Hotel Morris, Sydney. In Greater China, Accor will open six hotels, with Raffles at Galaxy Macau and Silveri Hong Kong – MGallery flagged as opening in early 2022. The Middle East is seen as a stronghold for Accor, particularly with the 2022 World Cup in Qatar as Accor has been chosen as the official accommodation provider for visitors to the event. Accor will also expand its Rixos portfolio in Qatar and across the region with three openings and new Raffles, Fairmont and Banyan Tree properties to open across the Middle East region in 2022. Regarding their joint venture with Ennismore, they will continue to grow lifestyle brands incl Mondrian, SLS, The Hoxton, Morgan’s Originals and Mama Shelter. The first Mondrian in China opens this year, while TRIBE Phnom Penh Post Office Square will bring bold design to Cambodia’s hotel scene. A larger than life Mama Shelter Dubai opens, expressing the idea of a resort in the heart of the city with apartments, pools and an outdoor cinema.
Skift note: only because of Accor’s stake in Chinese hotel company Huazhu is diminished Doesn’t mean the Paris-based company is slowing down its Asia-Pacific development streak.
Tuesday 18 January
shop steward he said Hotel companies that continue to favor them the most are those that are more leisure-oriented, namely Wyndham Hotels for Hotel C-Corps and vacation ownership companies BVH, HGV, TNL and VAC. The company upgraded Hyatt to $106 on buy from hold with a price target of $78. you look good Hyatt‘s long-term transition to a more asset-centric leisure company. Truist said they don’t love hotel REITs given the many concerns, but would be wary of being too negative given NAV discounts and the prospect of private-equity offerings. They continue to see the biggest driver/wildcard and source of volatility for 2022 accommodation stock performance as advances and/or pullbacks in the global battles against Covid and its variants.
Morgan Stanley upgraded Sunstone Hotels to overweight, while Choice Hotels was downgraded to underweight. They increased pricing targets for their covered names and increased 2022/2023 RevPAR and EBITDA estimates to reflect stronger pricing power. However, they believe pent-up demand, Covid and virtual meetings pose growth risks. MS forecasts US industry RevPAR in 2022 to be 7% below the 2019 peak, a recovery of 48% below the 2020 peak and 18% below in 2021. Their AlphaWise surveys of 200 travel managers of companies since the outbreak of Covid indicate a shift of 20% of travel to virtual meetings in the long term. Leisure continues to outperform in the current environment. MS expects this to continue, but at a slowing pace. In terms of price target changes, their largest was Hyatt hotels, increasing it by 9% from $81 to $88 while maintaining the equilibrium rating.
Skift Note: Investors and analysts appear to be rallying behind Hyatt’s increased focus on leisure travel recent acquisition of Apple Leisure Group.
Wednesday January 19th
Oyo hotels expects to be valued at approximately $9 billion at its proposed IPO. That’s a big drop from the $12 billion that was audaciously forecast last year, and reportedly OYO came down to earth after talks with potential investors. The SoftBank-backed company is expected to receive approval and begin a formal roadshow in the next week or so. Keep in mind that OYO was valued at $10 billion in 2019, but initial talks had been about a 15% discount off the $10 billion valuation, so this isn’t all bad news. OYO’s offering in India will be its biggest IPO since the disastrous Paytm, which raised $2.4 billion in November, only to see its share price halved. OYO plans to raise $1.1 billion through the sale of new shares and some secondary shares owned by existing investors.
Skift Note: Oyo finally goes public with realistic expectations on its business model.
Thursday January 20th
Jefferies said they are their top accommodation picks Hilton and Wyndham and while they’ve lowered 1Q22 estimates across the room, they believe the historically high valuations are secondary and that property names will continue to rise as demand recovers.
Change notice: Grind, indeed. Earnings season is upon us, so let’s see if Jefferies’ selection is accurate.