Electra America, AKA launch US$500M fund: A multifamily investment firm and a luxury hotel residences company have partnered to launch a US$500 million hotel investment fund, seeking to take advantage of opportunities created by the pandemic. Electra America Hospitality Group, a joint venture between Electra America and AKA, plans to focus on properties in New York City, Miami, Los Angeles, Washington D.C., Toronto and London, said Russ Urban, CEO of the new partnership. The joint venture recently closed on US$100 million in capital. Urban said the cities that the fund is targeting are “the deepest and [most] diverse markets” where it can take advantage of some level of distress and where the fund feels confident the market will return to pre-pandemic levels. The group will target hotels with 150 to 300 rooms that are independently run and managed, and will continue to operate the properties as hotels.
Soho House IPO?: Private members’ club Soho House is reportedly considering an NYSE listing with a valuation of up to US$3 billion, according to The Financial Times. Soho House, which operates 27 clubs around the world, has hired JP Morgan and Morgan Stanley and is looking to file with the U.S. Securities and Exchange Commission next month. In the past year, the group was forced to cut 1,000 jobs from its 8,000-strong workforce as well as ask landlords for rent holidays after lockdown restrictions forced the club to close its doors. However, it has also been reported that the company was able to keep more than 90% of its paying members during the pandemic. Soho House reportedly made £293 million (approximately $411 million) in revenues in 2019, about half of which originated from food and drink revenues and 20% from recurring payments by members.
S Hotels & Resorts acquires full stake in UK hotels: Thailand-based S Hotels & Resorts Public Co. Ltd., a subsidiary of Singha Estate Public Co., announced their acquisition for the remaining 50% stake of 26 hotels located in the United Kingdom. The 500,000 ordinary shares of the company, FS JV Co Ltd., would be acquired from S Hotels’ existing partner, FICO Holdings UK Ltd., for TBH560 million (US$18 million). The current portfolio of FS JV consists of 26 hotels with a total of 2,886 rooms across the UK, which are currently operating on France-based multinational hospitality company, Accor’s Mercure franchise model.
China’s pipeline dips slightly: According to the China Construction Pipeline Trend Report from Lodging Econometrics, China’s hotel construction pipeline dipped slightly at the end of Q4 ’20 to stand at 3,375 projects/639,811 rooms, down 4% by projects and 1% by rooms year-over-year (YOY). This is the second quarter off the peak reached in Q2 ’20, where construction pipeline totals stood at 3,574 projects/647,704 rooms. However, due to China’s robust manufacturing and export industry, their GDP has remained strong throughout the pandemic, as has their construction industry. China currently has 2,293 projects/413,874 rooms under construction, an increase of 3% by projects and 2% by rooms over last quarter’s totals.
Branson one step closer to Mallorca: Sir Richard Branson is now a step closer to transforming the Manor House at the Son Bunyola estate in Banyalbufar, Mallorca, into a luxury hotel — a dream of his for over 20 years. “We have now been granted permission to develop the Finca building on our Son Bunyola Estate into a small luxury 29-bedroom hotel. We are hopeful to start construction work later this Spring to open in 2023 and bring a beautiful historic Mallorcan building back to life in one of most ancient areas of Banyalbufar,” a Virgin source told the Majorca Daily Bulletin.
Iris Capital acquires Raffertys Resort: Sydney-based private hospitality group Iris Capital is paying an undisclosed sum for Raffertys Resort, located just outside Sydney, according to reporting from HVS. The freehold property has 73 villas, restaurants, reception, five conference rooms, bistros, and additional spaces available for future expansions and further development. This acquisition follows Iris Capital’s AUD180 million (US$139 million) transaction in November 2020, where 17 Ibis-branded hotels in Sydney, Melbourne, Brisbane, and Canberra were added to their portfolio.
Hyatt takes heat: Hyatt Hotels is defending its decision to host a conservative convention, at a time when the U.S. political climate has become increasingly volatile, citing its belief that individuals and organizations should be able to peacefully gather and express their own views. The three-day event is being held at the Hyatt Regency Orlando in Florida, featuring a slew of prominent Republican speakers from lawmakers and former administration officials to former U.S. President Donald Trump. A spokesperson for Hyatt told Fox Business in an emailed statement that its primary goal was to provide a safe and inclusive environment for its colleagues, guests and customers.
Radisson Individuals comes to Americas: Radisson Individuals, the newest brand addition for Radisson Hotel Group, has arrived in the Americas. Radisson Individuals initially launched in Europe, the Middle East, Africa and Asia Pacific in Q4 2020 and is now making its mark in the Americas with a hotel opening in St. Augustine, Florida, at the 94-room Sebastian Hotel.
Evanston, Illinois, hotel with US$50M foreclosure suit: The owner a prominent hotel in Evanston, Illinois, is poised to give up control of the property after being hit with a nearly US$50 million foreclosure lawsuit, the latest casualty of a COVID-19 pandemic that has crippled the hospitality sector. A venture of New York-based real estate firm Olshan Properties defaulted on its loan for the 269-room Hilton Orrington after failing to make its mortgage payments since August, according to a complaint.
CGI to invest in college with US$30M project: CGI Merchant Group, a minority-owned global investment management firm with a focus in real estate and private equity, will make a US$30 million investment in Atlanta, Georgia’s Morris Brown College to convert existing facilities into a 150-key upscale hotel and hospitality management training complex. Construction of the 90,000-square-foot state-of-the-art facility is expected to begin later this year. With the announcement, Morris Brown becomes the only historically black college nationwide with both a flagged hotel and a hospitality management training program on its campus. The hotel will join the Tapestry Collection by Hilton and will offer two food and beverage outlets, an outdoor terrace and instructional space for the school’s hospitality students.
Omni Jacksonville sells for US$35M: Omni Jacksonville Corp. has sold the Omni Jacksonville Hotel Downtown in Jackson, Wyoming, for US$35.1 million. The sale price for the 354-room hotel, which first opened in October 1987 and has been on the market since August, amounts to US$99,152 per room.
NewcrestImage buys Magnolia in Dallas: Dallas-based NewcrestImage has acquired the 325-room, 29-floor Magnolia Hotel in downtown Dallas, Texas, from Denver-based Stout Street Hospitality. It’s the first investment by NewcrestImage’s new US$100 million real estate fund, which has raised more than US$25 million since being announced on January 4, 2021. Various luxury re-branding options are being considered for the hotel, which currently has 115 suites with seating areas and full kitchens; 24-hour fitness and business centers; a library; a restaurant; two lounges; seven elevators; and 11 meeting rooms.
Kempinski expands wellness and wellbeing: Kempinski has completed the acquisition of shares of the international and independent wellness company Resense Spa S.A. Resense will continue to operate as an individual spa company and Kempinski will use the Resense infrastructure and expertise to further integrate wellness and “wellbeing” into the Kempinski hotels’ operation.
Baxter acquires one in Cape Cod: Cape Cod, Massachusetts-based Baxter Hospitality has acquired The Compass Rose, a boutique inn on Cape Cod. Over the next five months, the family-owned management company will lead a renovation and rebranding of the inn, which will debut as Chapter House this summer. The hotel is Baxter Hospitality’s second renovation project in New England. The group also owns and operates Sesuit Harbor House, another boutique inn.
Hotel workers added to NY’s vaccine eligibility list: New York’s COVID-19 vaccine eligibility has now been expanded to include hotel workers, the state’s governor, Andrew Cuomo, said February 26. It will be up to local health departments to determine how, where and when to schedule the workers’ appointments, Cuomo added. The move comes after the hotel industry urged Cuomo to designate its staffers as crucial front-line workers so they can be vaccinated against the coronavirus.
Chinese New Year travel was down 69.3%: Research undertaken by travel analytics firm ForwardKeys indicates that domestic air travel in China during New Year Golden Week (February 11-17) was 69.3% down on the equivalent period in 2019, when travel was at normal, pre-pandemic levels. Domestic travel during the fortnight before, which is traditionally a busy period for Chinese people returning home to spend the holiday with their families, was 62.3% down. Domestic travel to China’s two most important cities, Beijing and Shanghai, suffered especially badly, owing to mini COVID-19 outbreaks and associated travel restrictions.
Business travelers are still at home: Even as more and more people get vaccinated against COVID-19 despite a slow rollout, most companies have business travel plans on hold at least for now. Brian Kropp, chief of research in the Gartner HR research, said that executives are still very early in their planning process around starting normal business travel. Gartner research indicates that only 11% of companies have resumed travel or plan to return to historical levels within the next six months. Another factor in the business travel equation is employee relations. Many tech companies are not requiring employees to return to the office any time soon, and the prediction is that traveling will likely take even longer to gain wide acceptance.
Canada frustrations over quarantine bookings: There are growing reports of chaos and confusion for people flying home to Canada from abroad. For one mother, whose two sons play hockey in Russia, trying to get them home and book their hotel quarantine stay has been nothing short of an ordeal. A video from Global News captures this frustration.
Remote work kickstarts a hotel subscription movement: The past decade has seen the rise of subscription giants like Netflix, Spotify and HelloFresh and now, potentially, accommodation. In response to the challenges of COVID-19, hotels are switching their focus to flexible monthly subscriptions, often at a much lower price point. The price points of these hotel subscription schemes vary. The initial offering from micro-apartment hotel Zoku Amsterdam costs €2,750 (US$3,319) for 30 days, with discounts for bookings of multiple months. In the budget space, trendy hostel brand Selina recently launched a co-living subscription for stays across South and Central America, starting at just US$300 per month.
Finding resilience: With traditional travel coming to an all-time low, hotels have little choice but to converge with their local and domestic society, creating several interdependencies, according to the latest industry report from Horwath HTL. These interdependencies can be classified into four main categories – economic, environmental, social, and health. The report additionally highlights mechanisms and ideas through which the hospitality industry can engage with society, under these four dimensions.