First Hospitality Opens Up Investment Arm to Outside Capital
Baird reported on investor meetings they held with Summit Hotels management. Their takeaways included that INN believes lodging fundamentals are stable, with a 5% drop in RevPAR for the same store portfolio in April. When you exclude the Easter shift and last year's eclipse, INN said normalized performance would have been flattish. They have seen softer demand in recent weeks with a shorter booking window, but have not seen incremental demand deterioration in April and so far in May. Corporate transient demand has held in reasonably well with no broad-based cancellations. Government demand is down 20% to 25%, and INN's portfolio has been the subject of cancellations from Canadian travelers in Boston, Scottsdale, and South Florida. They used the description stable to describe expenses and margins as well, which is good news. On the capital allocation front, INN management told investors they are committed to repurchasing shares under its newly authorized $50 million program. Baird said their sense is that the company is already an active repurchaser.
First Hospitality has opened up its decades-old investment arm, First Investors, to outside capital and launched the First Investors GP Fund to deploy $400 million in hotel acquisitions. The GP Fund is expected to supply sponsor capital for investment in six to ten hotels over the next two to three years, targeting 150 to 350 key premium-branded or independent lifestyle hotels in growth markets. The GP Fund platform is led by First Hospitality CEO David Duncan. About 20% of the fund will be First Hospitality's own capital. The GP Fund platform is led by Duncan and governed by an ownership group under Executive Chairman Sam Schwartz and Founder and Chairman Emeritus Stephen Schwartz.
The first AC Hotel by Marriott in Kansas will open its doors on July 16, 2025. The AC Hotel Wichita Downtown will be in the restored Brown/Broadway Plaza Building. The 118-room boutique property will offer European-inspired accommodations in Kansas, tapas-style dining, flexible meeting space, and one of the largest hotel fitness centers in the region. Greenwood Hospitality, a strategic partner of Hotel Equities, will manage the AC Hotel Wichita Downtown.
The Commercial Observer reported that the first casualty of the Los Angeles City Council voting to raise the minimum wage for hospitality workers to $30 an hour is the Hilton Los Angeles Universal City Hotel's expansion plans. Sun Hill Properties manages the 495-room hotel, and they had already signed a room block agreement to reserve hundreds of rooms for the 2028 Summer Olympic and Paralympic Games. The future of the $250 million expansion that was expected for that is now in doubt. The expansion would have added 395 rooms. If this goes through, that minimum wage would be the highest in the United States. Unite Here's (typical) response was to call the industry participants 'chicken little,' saying this must end.
IHG Hotels & Resorts, in collaboration with owner DM Miramar Beach Hotel LLC and management DHRUV Management, finalized the opening of a newly converted Holiday Inn Express & Suites hotel in Destin, FL. The Holiday Inn Express & Suites Destin - Miramar Beach offers 74 guest rooms, an outdoor pool, and a fitness center. It is located across from what is described as the nation's largest shopping outlet, Silver Sands Premium Outlets.
The Kissimmee Place Development Group has proposed a 60,000-square-foot Hyatt Studios hotel with 3,000 square feet of conference space at the Florida city's airport. The hotel is one of two that the Cape Canaveral-based developer has proposed on city-owned land. The city is going to consider this proposal, which also includes the addition of a flight training campus for the rest of the property.
Hard Rock International unveiled development plans for REVERB by Hard Rock Mazatlan, Mexico. Operadora Martres S.A. de C.V. is the project developer. The new build project is expected to open in June 2028 with 170 rooms with beachfront views.
The Rosewood Mandarina in Nayarit, Mexico, opened, Rosewood's fourth property in Mexico. RLH Properties developed the resort and includes 134 ultra-luxury accommodations, including three specialty suites and two expansive standalone villas offering private plunge pools, expansive terraces, and bespoke design elements. The highlight of the rooms is the Canalan Beachfront Villas and the Cora Four Bedroom Mountaintop Villa, complete with infinity pools. Amenities include the Mandarina Golf Club, multiple dining venues that will continue to open through the year, four oceanfront pools, a fitness center, and the signature Asaya Spa.
The Gold N Silver Inn in Reno, NV, will be undergoing significant renovations. Jacobs Entertainment owns the property and has pledged to preserve the inn with the renovations. The Inn's breakfast and lunch items will remain, but will be joined by new offerings. The Inn will close temporarily on June 1 with plans to reopen in time for New Year's Eve. The renovations are part of Jacobs Entertainment's broader investment in downtown Reno, with projects also being done on the J Resort and the J Resort's Reno Neon Line.
Five parcels of land tied to the Reno Kimpton project were sold in a quiet auction at the Washoe County, NV courthouse steps. The trustee sale resulted in only one bidder, Court Street Ventures LLC, bidding $1 million. This is the LLC that triggered the foreclosure sale of the parcels over an $11.3 million loan to project developer CAI Reno Hotel Partners LLC, which went into default last year. Court Street Ventures is still locked in a legal battle with CAI over the Reno Kimpton project's bankruptcy, but Court Street said they plan to sell the property so they can recover as much as they can. CAI filed for Chapter 11 last year while continuing operations. Court Street wants it converted to a Chapter 7 to bring in a trustee to oversee and liquidate assets. A decision on the bankruptcy case will be made on June 2. CAI said they reached out to Court Street, offering a $2 million payment and payments of $1 million per month to delay the trustee sale until June 20th, but the offer was rejected.
The 73-room Cobblestone Hotels & Suites has opened in Foley, Alabama. Eddie Spence of Gulf Shores is a partner with Cobblestone on the $10 million hotel development. This is the second Cobblestone hotel in Alabama. Cobblestone said they also plan to break ground on a 54-unit hotel off the two square in Bay Minette, with Spence also being a partner there.
Personnel News
Remington Hospitality announced the appointment of Ben Perelmuter as their new Chief Executive Officer effective June 2. Perelmuter joins Remington from TPG Hotels & Resorts where he was President and Chief Operating Officer. Perelmuter succeeds Dean Sloane who served as CEO for the past eight years. He announced in April he was leaving.
Dreamscape Hospitality announced the appointment of Ryan Miyamoto as Vice President of Operations. He will oversee the operational performance of Dreamscape's portfolio. Miyamoto spent the past 18 years with Aimbridge Hospitality in various capacities, most recently as VP of Operations.
Europe Highlights
Hyatt Hotels has opened its first hotel in Croatia, the Hyatt Regency Zadar, located on the Adriatic Coast, close to Zadar's UNESCO-listed Old Town. Hyatt Regency Zadar features 133 guestrooms and suites, dining spaces, and over 7,965 square feet of event space.
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