David Eisen

🏨 U.S. hotel transaction volume peaked at $45.7 billion in 2015, then dropped to $8.1 billion in 2020 due to COVID-19 and recovered to $42.5 billion in 2022. September 2024 saw the Federal Reserve cut rates by 50 basis points, the first reduction since 2020, followed by a third consecutive cut in December to 4.25%-4.5%. Portfolio sales decreased to 8.3% of total volume in Q3 2024. SOFR is forecasted to fall to 3% during 2025-2027. Construction costs increased by 4.10% in Q2 2024, contributing to limited hotel development, with an increase in supply unlikely before late 2027 or early 2028.

🏕 Marriott International, the world's largest hotel company, has announced deals with Postcard Cabins and Trailborn for an outdoor-centric accommodations collection set to launch next year. Postcard Cabins, known for its tiny cabins within two hours of major cities, has over 1,200 cabins across 29 U.S. properties. Trailborn offers bespoke hotels near outdoor destinations, with 559 rooms across five locations and more in development. Both brands will integrate into Marriott Bonvoy in 2025, expanding Marriott's portfolio following the outdoor travel trend heightened by the pandemic. Marriott's move follows Hilton's partnership with AutoCamp in February 2024 and Hyatt's collaboration with Under Canvas in July. Marriott's CFO, Leeny Oberg, emphasizes the company's commitment to nature-immersive travel.

🏖️ Keswick Hall, an 80-room luxury resort in Virginia, originally built in 1912 as a manor house, underwent a multimillion-dollar renovation led by Robert and Molly Hardie after their 2017 acquisition. The resort fully reopened in summer 2022 with features like a Jean-Georges Vongerichten restaurant and a Pete Dye-designed golf course. Room rates start at $500, peaking during weekends and summer. The Hardies also own The Hermitage Hotel in Nashville, sharing an excellence in customer service and luxury experience. Both hotels highlight Jean-Georges Vongerichten's culinary expertise.

🏨 Hotel cap rate spreads decreased to 2.44% in Q1 2024, nearly 50 basis points below their long-run average since 2001, suggesting normalization in hotel investment risk. During the pandemic, hotel mortgage interest rates doubled, but by Q1 2024 spreads to 10-year Treasuries and 15-year residential mortgage rates returned close to pre-pandemic levels, at approximately 100 basis points and 124 basis points, respectively. The CBRE report indicates that these trends in the capital market signal a stabilization in the relative pricing of hotels.

🏨 Cody Bradshaw, CEO of L+R Hotels for two months, was previously with Starwood Capital for over 13 years. Joe Pettigrew, after 11 years with Starwood and six months as CCO at EOS Hospitality, joins L+R Hotels as Group Chief Commercial Officer. Pettigrew will oversee commercial strategies for the group’s approximately 23,000-room global portfolio, targeting efficiency and growth in North America, Palm Beach, Marbella, Venice, and beyond. He will be based in London, reporting to Bradshaw.