U.S. Hotels Likely to See Softening in Leisure Travel Bookings

25.08.2023 - 14:31 / skift.com / Sean Oneill

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.

It was a subdued NAREIT REITworld conference in San Francisco, judging by the analyst reports. Truist said that some U.S. lodging REIT management teams expressed concerns about cracks in demand forming with technology customers soon after recent layoff announcements. Truist said they found most management teams are resigned to leisure travel softening but are more positive and focused on the continued recovery of the laggard demand segments and markets, specifically higher-rated corporate travel, group/convention, and non-leisure urban markets such as San Francisco.

Jefferies said its takeaways from NAREIT include that with the era of cheap capital concluding, developments and acquisitions no longer pencil. The investment bank’s research analysts found most REITs believe they don’t have much to do other than sit back and wait for everything to settle out. REITs’ main defense is capital preservation and driving organic growth. They believe that urban, business transient, and group travel recovery is continuing, bullish for Lodging & Gaming REITs.

First Hospitality assumed management of the Inn on Sheridan, a boutique hotel in Zion, IL. The company also added the Holiday Inn Express Cincinnati West to its extensive roster of branded hotels. This marks First Hospitality’s first properties in both markets. 

Skift Note: Real estate investment trusts have a delicate dance to do as they try to grab plentiful and lucrative opportunities while not getting surprised by recessionary trends. For example, it’s hard to judge the difference between pent-up group bookings demand versus a likely re-normalization of group trends in 2023 and beyond.

The supposed reopening trade for China stocks hit a speed bump as the realization set in with investors that Covid cases are not going down, in fact they continue to go up. For the sixth straight day, the number of new cases topped 20,000 with a new seven month high today of more than 26,000. Guangdong is once again has doubled their cases, reporting more than 9,000 today. A five day lockdown of the Baiyun district has been ordered. On another note, Hong Kong Chief Executive John Lee brought back a present from the Asia Pacific Economic Cooperation Forum in Thailand, testing positive for Covid when he returned to Hong Kong.

ONYX Hospitality Group said they reinforced their expansion plan with a strategic focus on its home territory of Thailand and neighboring destination, Malaysia. Their neighbor will be the first outside Thailand to operate all three brands. ONYX is also expanding