COVID-19: Colony considers selling | Lows, highs for U.S. performance

Colony might sell hotels

Tom Barrack-led Colony Capital has hired Moelis & Co to evaluate alternatives for the holdings, which include full-service, extended-stay and select-service hotels, according to Bloomberg. Earlier this month, it was reported that Colony had defaulted on US$3.2 billion in loans backed by hotel and health care properties. The properties accounted for three quarters of Colony’s real estate balance sheet. Barrack plans to step down as CEO later this year.

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Expedia: US$275M for partner recovery

OTA Expedia Group is committing US$275 million to help partners rebound from the impact of COVID-19 and fuel industrywide recovery efforts. Research carried out by Expedia in April indicates lodging partners want support from OTAs in four priority areas as they look to rebound from the pandemic: Demand trends insights on leisure and domestic travel; investments in marketing and demand generation for travel and destinations; increased visibility on Expedia Group’s sites; and financial relief. The company’s recovery program comprises global initiatives to support industry recovery and property-level relief designed to help independent partners and small chains rebuild their business, attract high-value guests, and optimize cash flow. 

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New lows for U.S. hotel performance in April

In April, COVID-19 tightened its grip around U.S. states and cities where stay-at-home orders abounded and travel was at a near standstill. The result was a month’s worth of grim hotel data, according to HotStats. With occupancy rates off 73 percentage points from a year prior, and a steep drop in average room rate, RevPAR fell 95.2% year-over-year to a single-digit number, on a per-available-room basis. And with virtually no ancillary revenue generated, including F&B revenue of below US$1 per-available-room, TRevPAR decreased 95% YOY. While closed hotels or those running bare-bones operations saved on the expense side, including total labor costs down 73.5% YOY, gross operating profit per available room still suffered tremendously, down 122.8% YOY to US$-26.34, the second consecutive month of GOPPAR as a negative value.

But U.S. performance up slightly at May’s end

The week ended May 23 showed another small rise from previous weeks in U.S. hotel performance, according to data from STR. Year-over-year declines remained significant although not as severe as the levels recorded in April.

May 17-23 (percentage change from comparable week in 2019):

  • Occupancy: 35.4% (-50.2%)
  • ADR: US$80.92 (-39.7%)
  • RevPAR: US$28.67 (-69.9%)

Previous weekly U.S. weekly occupancy levels:

  • May 10-16: 32.4%
  • May 3-9: 30.1%
  • April 26-May 2: 28.6%
  • April 19-25: 26.0%
  • April 12-18: 23.4%
  • April 5-11: 21.0%

Aggregate data for the top 25 markets showed larger year-over-year declines than the national averages: occupancy (-58.7% to 32.4%), ADR (-48.5% to US$84.47) and RevPAR (-78.7% to US$27.36).

Four of those markets saw occupancy levels above 40%: New York, New York (44.9%), Tampa/St. Petersburg, Florida (41.5%), Norfolk/Virginia Beach, Virginia (40.5%), and Phoenix, Arizona (40.1%). Of those markets, Phoenix showed the largest gain from its occupancy level the previous week (33.6%). 

Markets with the lowest occupancy levels for the week included Oahu Island, Hawaii (12.7%), Orlando, Florida (22.5%), and Boston, Massachusetts (22.8%).

Of note, absolute occupancy in Seattle, Washington, showed no movement from the week prior (27.6%).

Deutsche Hospitality to reopen hotels in Austria

As travel restrictions begin to ease, the Steigenberger Hotel Herrenhof in Vienna and the Steigenberger Hotel & Spa Krems will both be reopening on May 29. Those will be followed by the IntercityHotel Vienna and the Maxx by Steigenberger Vienna, which will start receiving guests again on June 2 and July 1, respectively. Some of Deutsche Hospitality’s Austrian hotels have been using the break caused by the corona crisis to carry out renovations in their guest rooms and public areas.

Elsewhere: Room Mate signs in Portugal

Madrid-based Room Mate Hotels has signed its second hotel in Portugal in the city of Porto. The new hotel, which was acquired by an international fund managed by Caler Advisory, will be designed by interior designer and antiquary Lorenzo Castillo. Located on Rua Cedofeita, one of the main shopping streets in Porto, the hotel will have 78 rooms, a garden with an outdoor swimming pool, terrace, banquet room, gym and spa.