Sternlicht on future hotel demand
During its Q2 earnings call, Starwood Property Trust Chairman and CEO Barry Sternlicht said two real estate sectors in which demand will not return to pre-COVID levels are hotels and retail. “There’s no question business travel will be injured,” he added, according to The Real Deal. “Underwriting is going to be different. If COVID goes on for years, it’s going to be tough.” During the quarter, the REIT negotiated modifications to 11 loans and is working on one more, offering partial interest deferrals to its borrowers. A majority of these loans are for hotel properties.
Traveler behavior, loyalty and values transforming
A recent report from marketing agency Ketchum examines consumer attitudes and actions related to travel to uncover trends, shifts and insights driven by the pandemic and the state of nonstop disruption that accompanies it. The report finds that 25% of travelers don’t trust hotels to provide a safe experience. Additionally, on average, those surveyed didn’t see themselves staying in a hotel for another seven months.
North Americans eyeing domestic outdoor destinations
The latest findings of a survey of North American travel advisers indicate that travelers are being cautious about their international travel plans by booking with some of the longest windows advisers have ever seen. Meanwhile, according to the survey by marketing firm MMGY Myriad, there is still limited appetite for travel in the more immediate future – but there has been a shift in interest to domestic, outdoor-focused trips continues.
Matching hotels to needed funding
Tampa, Florida-based Plasencia Group has formed the TPG Lodging Capital Nexus, created to match capable providers of capital with owners of hotels and resorts needing funds to address financial challenges brought on by the COVID-19 pandemic. In practice, TPG Lodging Capital Nexus will connect firms, family offices and high-net-worth individuals seeking to invest in the lodging industry with hotel owners who need capital to support property operations, face maturing loans, desire to pay down their existing debt, or prefer to exit their holdings altogether.
Why sustainable consumption will be new normal
Although any semblance of “normal” may seem some distance away, it is unlikely that the trend of being eco-conscious and sustainable will diminish soon, according to reporting from The Telegraph. If anything, consumers will be all the more particular about their relationship with goods. There is also a good chance that sustainability will still be in the forefront of people’s minds as they think about being more responsible with their lives.
U.S. hotel performance up slightly
U.S. hotel performance data for the week ended August 1 showed slightly higher occupancy and room rates from the previous week, according to data from STR.
July 26 through August 1(percentage change from comparable week in 2019):
Occupancy: 48.9% (-34.5%)
ADR: US$100.04 (-25.3%)
RevPAR: US$48.96 (-51.1%)
U.S. occupancy has risen week over week for 15 of the past 16 weeks, although growth in demand (room nights sold) has slowed. Aggregate data for the top 25 markets showed lower occupancy (41.4%) and ADR (US$97.58) than all other markets. Norfolk/Virginia Beach, Virginia, was the only one of those major markets to reach a 60% occupancy level (64.1%). Three additional markets reached or surpassed 50% occupancy: Detroit, Michigan (54.3%); San Diego, California (53.1%); and Philadelphia, Pennsylvania-New Jersey (51.4%). Markets with the lowest occupancy levels for the week included Oahu Island, Hawaii (21.4%), and New Orleans, Louisiana (29.7%).