DiamondRock completes sale: DiamondRock Hospitality Co. completed the sale of the 725-room Lexington Hotel in New York City for US$185.3 million. In addition to the company’s projected capital expenditures, the sale price represents a 14.2x multiple on 2019 hotel EBITDA and a 5.4% capitalization rate on 2019 hotel net operating income. The company plans to utilize the proceeds from the sale to acquire resorts and urban lifestyle hotels. DiamondRock currently owns 29 hotels concentrated in gateway markets and destination resort locations, with more than 8,800 rooms.
Repurposing assets: Broker Marcus & Millichap has announced the sale of nine hospitality properties (including six Crowne Plazas) across eight U.S. states in major metro areas, amassing 1,550,000 square feet with a total value of approximately US$225 million. Acquirer Lockwood Development Partners plans to repurpose these properties and create multi-dimensional assets that will help stimulate the economy and provide essential resources and opportunities to the veteran and senior communities. The repurposed, multifaceted assets will feature a rebranded, eco-friendly, and sustainable hotel operation, affordable multifamily housing and “ghost kitchens.” In conjunction with the Veteran Affairs’ Mission Act, the properties will also serve as a resource for veterans to receive permanent housing, physical and mental assistance, and other support programs through SarahCare, an organization dedicated to providing resources for seniors.
Bleak summer out for UK: U.K. tourism is set to face a bleak summer with international visitor revenue expecting to plummet by £6.2 billion (US$8.5 billion) from pre-pandemic levels. The country’s economic output for travel fell 86% for travel agents and tour operators between February and December 2020, according to a study by the Office for National Statistics. As per the 2021 tourism forecast by Visit Britain, international tourism for 2021 will be 28% of pre-COVID levels, with only 2% more people (11.3 million visitors) visiting U.K. than in 2020. The numbers are likely to get better even by the end of 2021. Despite the thriving staycation and glamping holidays, estimates suggest domestic tourism will reach 56% of 2019 levels. The tourist industry could spend £51.4 billion (US$ 70.8 billion) in domestic tourism spending this year.
Lockdowns in Australia curtail bookings: Key markets in Australia are showing lower levels of occupancy on the books for the coming weeks, amid recent COVID-19 outbreaks and lockdowns in Victoria, New South Wales, Queensland, Northern Territory and Western Australia, according to STR. Sydney’s occupancy on the books is down 13.8%, in comparison to the June 28 data. Occupancy in the week ending July 3 is unlikely to exceed 20%, another decline from the previous weeks. The booking pace for July has slowed drastically across Australian markets, leading to a lagging but sustained impact on actualized occupancy. Australia has been one of the highest-performing countries during 2021, with improving midweek demand alongside continued strength across weekends. Year to date through May, Australia’s RevPAR had reached 74% of 2019 levels.