For sale: Stake in Manhattan hotel portfolio
A Chinese private-equity firm is looking to sell a stake in its large Manhattan hospitality portfolio at a discount, in one of the largest hotel offerings to hit the market since the start of the pandemic. Cindat USA wants to sell a preferred equity stake in a portfolio of seven select-service Manhattan hotels it bought in 2016 as part of a joint venture with Hersha Hospitality Trust. The company, which is backed by China’s Cinda Asset Management and Taikang Life Insurance, is eyeing pricing that would value that 1,087-room portfolio in the low-US$400 million range — a significant discount to the US$571 million the partners paid for the portfolio four years ago.
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Hilton Times Square closing its doors long-term
The Hilton Times Square is about to be one of the most prominent Manhattan hotels to shut down for a long-term period amid the coronavirus pandemic. In a Monday public filing, the company in control of the 478-room hotel announced the “permanent closing” of the hotel and said it would cut 200 jobs, effective in October. A spokesman for Sunstone Hotel Investors, which controls the hotel, told The Wall Street Journal that the company made the filing to indicate that layoffs might last longer than six months. He said the filing was not intended to imply that there is a permanent closure. The hotel, franchised under the Hilton Hotels & Resorts brand, closed to visitors in March and began furloughing workers.
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U.S. occupancy decreases slightly
U.S. hotel occupancy decreased slightly for the second consecutive week, according to the latest data from STR.
August 23-29 (percentage change from comparable week in 2019):
Occupancy: 48.2% (-27.7%)
ADR: US$98.39 (-23.2%)
RevPAR: US$47.38 (-44.5%)
The industry sold 237,000 fewer room nights than the previous week, which represented a demand decrease of 1.3%. Week-over-week demand improvements were a constant since mid-April, but as summer ends and leisure travel fades, hotel performance gains have flattened.
Aggregate data for the top 25 markets showed lower occupancy (42.5%), but higher ADR (US$99.22) than all other markets. Norfolk/Virginia Beach, Virginia, was the only one of those major markets to reach a 60% occupancy level (60.6%). Three additional markets reached or surpassed 50% occupancy: Los Angeles/Long Beach, California (53.0%); San Diego, California (52.3%); and Houston, Texas (51.0%). A week-over-week jump in Houston occupancy (38.9% the previous week) is attributable to evacuations and displaced residents due to Hurricane Laura. Markets with the lowest occupancy levels for the week included Oahu Island, Hawaii (26.6%), and Orlando, Florida (27.2%).
