Editor's Note: Some linked articles may be behind subscription paywalls.
1. MCR and Island Capital Acquire Times Square Sheraton for $373 Million
Hotel investment firms MCR and Island Capital Group have acquired the 1,780-room Sheraton New York Times Square for a price tag equating to $210,000 per room.
A news release from the seller, real estate investment trust Host Hotels & Resorts, said the sale price represented a 28-times multiple on 2019 earnings before interest, taxes, depreciation and amortization.
"The EBITDA multiple includes approximately $136 million of estimated foregone capital expenditures over the next five years," the release states. "In connection with the sale, [Host] is providing a $250 million bridge loan to the purchaser.”
2. Corporate Travel Return Still Two Years Away, Says Deloitte
Corporate travel is expected to continue increasing across the rest of 2022, but remains approximately two years behind a full recovery, according to research from business advisory Deloitte, which said the ending of the mask mandate in the U.S. and the general return of employees to offices will both result in an uptick in travel.
The three challenges of inflation, the Russian invasion of Ukraine and the continuation of COVID-19 in the general population will continue putting pressure on the sector. Late last year and into 2022, the omicron variant of COVID-19 added more strain, with Deloitte stating “when surveyed in June 2021, 34% of corporate travel managers expected to reach half of 2019 travel spend by the end of 2021. However, only 8% did.”
3. Benchmark Pyramid’s Provenance Acquisition Not Just About Scale
Benchmark Pyramid’s agreement to acquire Provenance Hotels, announced earlier this week, is about the combined company being better, not larger, according to Benchmark Pyramid President Alex Cabañas, speaking to Hotel News Now’s Bryan Wroten.
“It wasn’t about just being big, and I find a lot of the consolidation tends to talk more about scale and not enough about specialization,” Cabañas said.
The deal caps off a very busy few months for Benchmark Pyramid, which was created in September when Benchmark Global Hospitality merged with Pyramid Hotel Group for a total portfolio of 210 hotels, a development covered also by Wroten. The Provence deal, when completed, will see a further 12 hotels added to that number.
4. More Than 200,000 Used UK Quarantine Hotels in 2021
According to the United Kingdom’s National Audit Office, more than 214,000 people traveling from “Red List” countries into the U.K. were housed in official quarantine hospitals between Feb. 15 and December 15, 2021, and the cost of implementing COVID-19 tests and checks at is borders in 2021 and up to the present moment equaled 486 million pounds sterling ($634 million).
The government’s Department of Health & Social Care initially said its Managed Quarantine Service would break even, but the NAO’s report published on April 21 said this did not happen and the U.K. taxpayer has supplemented the scheme to the cost of almost 400 million pounds sterling ($522 million), about 50% of the total 786 million pounds sterling ($1.02 billion) bill.
5. Weekly Results for US Hotels
Year-on-year performance metrics in the U.S. hotel industry for the week ending April 16 saw both average daily rate and revenue per available room improve noticeably above year-on-year 2019 levels, according to data from STR, CoStar Group’s hospitality analytics firm.
ADR came in at $147.25, 14.4% over the comparable period in 2019, and RevPAR came in at $91.25, an 8% increase over 2019. Occupancy for the week was 62%.
Among the top 25 U.S. markets, Tampa achieved the highest occupancy increase over 2019, up 3.2% to 76.6%.