Trump Hotels CEO leaves declining company
Eric Danziger, the outgoing CEO of Trump Hotels and one of the few non-family members to hold the company’s top job, is the latest drag on the hotel brand that has lost properties in recent years.
Here’s a sampling of what the Daily Lodging Report provided its readers with last week. If you’re not a subscriber, you should be. Do not wait. Register now here.
Sunday February 27
The Grand Hyatt Hotel next to the Henry B. Gonzalez Convention Center in San Antonio is listed for sale. Hyatt had made the necessary payments, but after failing during the pandemic, the city began taking over the payments. Now the Grand Hyatt can be sold to an out-of-state nonprofit to settle the debt. The remaining revenue obligations from 2005 total approximately $168.3 million. According to the plan, Hyatt would sell the hotel to Community Funding Corporation. The city would issue another bond of up to $450 million to repay existing bond debt guaranteed by the city. It will also build operating reserves and debt reserves for the hotel in the future. If the plan is approved, SWC would own the hotel and make bond payments over the next 40 years. Hyatt would continue to operate and manage the hotel for at least 30 years. The deposit would be refunded using hotel revenue and the city would not be responsible for compensating for any default. Once the deposit is refunded, CFC would then transfer ownership of the hotel to the City of San Antonio. This could happen around the year 2060 or earlier if paid off earlier. The decision is subject to the approval of the city council, which will consider this point on March 3.
A note on the Skift: This isn’t exactly the kind of sale Hyatt wants to brag about in its continued push to shed real estate and become more of a small-cap company like competitors Marriott and Hilton.
Monday February 28
Ascend Hotel Collection by Choice Hotels International, Inc. and Cambria Hotels achieved national system-wide RevPAR index share gains against its local competitors in 2021 compared to the same period of 2019. At the same time, the two brands combined to increase the number domestic upscale hotel business by 13% year-over-year, excluding the impact of the exit from AMResorts properties following its acquisition. Ascend Hotel Collection now has 325 hotels open worldwide, adding to the collection last year several retreats in mountains, lakes and bays, from Chesapeake Bay in Maryland to Blue Ridge Mountain in North Carolina . In addition to outperforming local competitors throughout 2021, in Q4 Ascend surpassed 2019 RevPAR levels, achieving a 14% increase in ADR, and outperformed the premium segment by nearly 16 percentage points in terms of RevPAR growth, compared to the same period of 2019. Cambria Hotels achieved its strongest RevPAR index share gains against local competition in the brand’s history, drawn by times by occupancy and ADR index gains in 2021. For the year, Cambria achieved RevPAR index share gains over local competitors of more than 12 percentage points compared to 2019. brand also continued to generate positive unit growth for Choice, growing to 57 hotels, opening 8 hotels in 2021 with 17 projects under active construction at the end of the year, including 6 groundbreaking works including 4 in the fourth quarter. In 2022, the brand plans to open more than 20 new hotels across the country.
Note Skift: It’s no wonder Choice Hotels wants to push even further into upscale hotels with its two upscale brands accelerating their recovery last year.
Tuesday, March 1
It’s like a time warp as much of the world is rapidly reopening as Omicron/Covid cases plunge while Hong Kong faces the worst outbreak in over 2 years that Covid -19 has existed. Hong Kong’s new daily infections topped 20,000 over the weekend, prompting officials to admit their system of hospitalizing every patient isn’t working and they’re running out of room. Authorities have agreed to allow vaccinated patients to isolate at home and return to normal life once they test negative twice. It looks like the speed at which the infection is spreading will cause this to end soon, but the problem is that no one is ready to call a spike in infections just yet.
Skift Note: Hong Kong continues to struggle under the grip of the pandemic, but the government shows no sign of letting up in its tough approach to new cases. It is a long-term legacy that hotel companies must take into account in their operations in the city.
Potential buyers have reserved more than half of the 179 luxury residences in the Four Seasons project to be inaugurated next year in Austin, TX. Development is an adventure between Austin Capital Partners, Four Seasons Hotel and Resorts; and hines. The Four Seasons Lake Austin Private Residences will be spread across 18 buildings and will include a private marina, clubhouse, infinity pool, yacht club for owners and a cable car connecting the top of the hill to Lake Austin. Plans also call for a gourmet restaurant, a cafe, a sports center with private training rooms, golf simulators, squash courts, basketball, tennis and pickleball courts, as well as a hall sports and a playground for children.
Skift Note: Four Seasons continues its significant expansion streak under Bill Gates ownership, and its residential push signals, luxury hotel brands, see homes as a sustainable source of revenue going forward.
Wednesday March 2
In South Korea, consulting firm C3 game asked if foreign-only casino resorts would survive the pandemic. For years we have discussed the poor performance of these stations, constantly having problems that have resulted in low revenues, compounded by the opening or construction of new billion dollar stations. The bigger question should be why would anyone want to spend billions more like Mohegan Gaming done, on a mega-IR reserved for foreigners? The reality is that if C3 is correct and most of the foreign-only IRs close, it will benefit Mohegan Gaming’s Inspire project. If it’s just Cebu IRs closing, as the study suggests, that won’t help Inspire or its biggest competitor, the young IR in Paradise City in Incheon which is already open and bleeding from l red ink, even before the pandemic. The borders could open but not the Chinese. Even though China would lift the Zero-Covid policy and allow open borders and the movement of their nationals, China has declared war on cross-border gambling. There are 17 foreign-only casinos in South Korea and none are doing better than surviving. More than half of the country’s gambling revenue is generated by the only casino that allows locals to gamble, Kangwon Land Casino located in Jeongseongun. Jeju has 8 foreigner-only casinos that were barely holding up before the pandemic hit. Only three of the eight casinos are open at this time. outraged city of paradiseMohegan Gaming’s Inspire IR and the Miden City Resort are planned in Incheon. The latter is the one Entertainment Caesars abandoned and we doubt that it has much chance of being developed.
Skift Note: Another Western game company is looking beyond Macau to pump resources into the Asia-Pacific region.
Thursday March 3
After 6 years of employment, most people would not have wanted, Eric Danziger steps down as CEO of Trump Hotels to become CEO of Braintree Group. Braintree is an investment group with businesses that focus on education, multifamily housing, storage and hospitality. Braintree Hospitality is a full-service hotel development and management company that owns and operates 14 hotels in the western United States. Being CEO of Trump Hotels during the Trump presidency has not been an easy task.
Skift Note: The number of Trump-branded hotels is down, so it’s no surprise the brand’s general manager is looking for a new job.
the CBRE Hotels Research State of the Union provides a review of current hotel trends, leading and coincident indicators of hotel demand, and an update on cost pressures and margin flow. The key takeaways from their recent research are: the worst of 2022 is probably behind us. January was a low point, but things started to pick up in February. Recent data on travel trends and leading indicators indicate that trends should continue to improve in the near term. The reopening of the US border in November led to large increases in inbound international travel, with many gateways reaching or surpassing their 2019 levels in December; there is still significant growth avenue in 2022 and markets like New York, San Francisco, Miami and Los Angeles are expected to continue to benefit. OTA and branded websites have recovered to pre-pandemic levels, but group and corporate travel continue to lag. December 2021 GOP levels topped 2019, but full-year 2021 GOP is 35% lower than 2019. Stronger GOP levels resulted in nearly 50% reduction in December 2020 CMBS delinquencies to December 2021. Short-term rental market share normalized as hotels reopened. Large units in southern destinations and drive-through destinations are driving revenue growth. GDP estimates for 2022 have been revised down and rate hikes could be a headwind. Hotel construction spending continues to decline and increases in input costs will continue to dampen incremental supply growth, boosting investor appetite for existing assets.
Skift note: Strong performance in the last month of 2021, even with a push from Omicron, coupled with the now-declining variant, is a major wind in the sails for US hotels looking to accelerate their recovery this year.