Selina, a hotel and experiences brand focused on youth travelers, said on Wednesday that its financial metrics were trending in the right direction as it reported earnings results.
25.08.2023 - 14:43 / skift.com / Asia Pacific / Mark Hoplamazian / Ihg / Sean Oneill
Earnings seasons for the hotel sector is nearly over, and one striking aspect of executive comments on calls with investors was the resilience of development pipelines for hotels belonging to brands run by global groups. For new construction, conversions, and franchise signings, hotel companies painted an optimistic picture.
The U.S. market was still among the world’s robust during the third quarter. Choice Hotels, which has a heavy presence in the U.S., reported that in September it saw a 23 percent increase year-over-year in new domestic franchise agreements awarded. A majority were for conversions. Demand for its new construction brands rose by about 30 percent in the third quarter, year-over-year.
New construction in the U.S. has faced a relative slowdown for more than a year, first because of supply-chain and labor disruptions and then because of interests rates rising making it somewhat harder for developers to get debt to finance projects. But southern states have held up better.
In the North American market, owners tend to get financing through regional banks, which have been generally slower to approve loans this year, noted IHG’s chief financial officer, Paul Edgecliffe-Johnson. By contrast, owners in some parts of the Middle East and Asia Pacific get loans through relationships to banks built on links to other businesses. This liquidity has remained comparatively more fluid, he said.
Hilton said its construction starts outperformed expectations in the quarter, largely due to better activity in the U.S. as the cost of materials stabilized and demand for residential construction declined. It has been the only major U.S. hotel company to deliver year-to-date growth in its under-construction pipeline, according to data benchmarking firm STR.
During the quarter, Hilton signed about 20,000 rooms, bringing its pipeline to a record 416,000 rooms — half of which are under construction. While its international signings are below the historical average, the company still forecasted net unit growth of about 5 percent for the year — not too far off its historical growth rate of 6 percent to 7 percent.
IHG continued to hold onto an aspirational goal of having 4 percent year-over-year net system growth. Edgecliffe-Johnson implied that the owner of at least one significant portfolio of hotels of an average or above average worth would join its system by year end. Without the deals, the company will likely be at 3 percent year-over-year.
Over at Hyatt, when asked whether the company would be able to sustain its 6.5 percent year-over-year growth in its network next year, President and CEO Mark Hoplamazian said yes.
“Things are firming and we have actual openings to point to in the near term, and we’ve got
Selina, a hotel and experiences brand focused on youth travelers, said on Wednesday that its financial metrics were trending in the right direction as it reported earnings results.
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Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.
Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.
Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.
Good morning from Skift. It’s Monday, January 9, and here’s what you need to know about the business of travel today.
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Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.
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