Atlas in the news

Through the end of 2016, the California hotel market enjoyed a record six-year run-up in increasing room revenues, profitability and values. This led to a much more positive environment for new hotel construction; we are definitely seeing a jump in new hotel rooms completed and in planning. For additional information: Atlas Hospitality Group California Hotel Development Survey 2016 YE 201701

Los Angeles Business Journal 03/31/17 Extended Stay Pays for Hotels HOSPITALITY: King’s move to China yielded investors. By Daina Beth Solomon http://labusinessjournal.com/news/2017/mar/31/extended-stay-pays-hotels-hospitality   When the 2008 financial crisis crushed developer Grant King’s vision of opening a hotel in Hollywood, the co-founder of Relevant Group did more than call wealthy investors for help. He moved to Shanghai for face time with potential backers. Nearly a decade later, his $110 million Dream Hollywood Hotel is set to open this month, backed by financing from Chinese investors, including those using the EB-5 program to ease their paths to green cards. “This type of money really sets a project up to succeed. … For developers, it’s the cheapest form of capital you can get,” King said. More than helping Dream Hollywood get off the ground, Relevant was able to tap additional Chinese EB-5 funding to back three other hotels it plans to build on neighboring blocks at a cost of $185 million. It is also planning to use Chinese money to bankroll a $220 million downtown project, dubbed the Morrison Hotel. That activity caught the attention of Colony NorthStar, which recently took a minority stake in the developer. Hotel projects in particular can benefit…

Atlas Hospitality Group President Alan X. Reay on a panel at the RAR Hospitality Lodging Industry Forecast Event (March 24, 2017) https://www.facebook.com/rarhospitality/videos/840078036132321 https://www.facebook.com/rarhospitality/videos/840092306130894

WEHOville 03/29/17 Mayor Meister Calls for a Moratorium on New WeHo Hotel Construction By Staff http://www.wehoville.com/2017/03/29/mayor-meister-calls-moratorium-new-weho-hotel-construction/ Mayor Lauren Meister will ask the West Hollywood City Council on Monday to declare a moratorium on the development of new hotels in WeHo until the city can conduct a new study on their impact on the existing hotel market. In her proposal, Meister notes that last September the Council was given an analysis of the WeHo hotel market that projected a major decline in hotel occupancy and in the rate per hotel room if the city grants permits to hotel projects currently under review on top of those that already under construction or that already have been approved for construction. Yet, she said in an interview with WEHOville, the Council simply “received and filed” the analysis without acting on it. The analysis, by PFK Consulting and CBRE Hotels, noted that WeHo hotel projects under review, under consideration and already approved for construction would add 1,229 rooms to the city’s current 2,060 hotel rooms, an increase of 60%. The study projected that by 2020 the hotel room occupancy rate would fall to 68% from the rate of 83% in 2015. It also said that…

The Real Deal 03/29/17 West Hollywood Mayor Seeks Moratorium on Hotel Construction By Hannah Miet https://therealdeal.com/la/2017/03/29/west-hollywood-mayor-seeks-a-moratorium-on-hotel-construction   West Hollywood Mayor Lauren Meister is wary of the hotel boom sweeping the city. So wary, in fact, that she will bring a proposal to City Council on Monday calling for a moratorium on new hotel development until West Hollywood conducts a study on the economic impacts of a room surplus. In her proposal, Meister cites a study conducted by PFK Consulting and CBRE Hotels last year, which predicted the volume of projects in the pipeline could reduce occupancy and hotel room rates, Wehoville reported. If all 1,229 rooms in hotel projects in the pipeline are completed — an almost 60 percent increase in inventory — WeHo’s hotel room occupancy rate could fall from its current average of 80 percent to 68 percent in 2020, the report predicted. In response to the report, Atlas Hospitality Group said the surplus of rooms would “cannibalize the market” and potentially decrease the hotel room tax taken in by the city by as much as $1 million in 2020 and 2021. Meister argues these warnings were not given enough attention. The council “received and filed” the information…

San Diego Business Journal 03/26/17 Lodging Forecast: How Long Can Post-Recession Uptick Last? By Lou Hirsh http://sdbj.com/news/2017/mar/26/lodging-forecast-how-long-can-post-recession-uptic/   San Diego County’s lodging and tourism industries have been on a tear for the past six years. Can they go for a seventh in 2017? The local region in 2017 is expected to maintain its highest hotel occupancy levels seen in the last 30 years, at least matching its lodging performance of 2016, according to the latest forecast from San Diego’s RAR Hospitality Inc. At his consulting and management company’s annual lodging industry forecast event in Carmel Valley on March 24, CEO Robert Rauch said barring an unforeseen terrorism-related or other “black swan event,” the national tourism economy should remain strong in 2017. The San Diego region’s tourism and lodging fundamentals generally fall in line with what’s happening nationally, and local metrics have generally been improving year-over-year for the last six years straight. Rauch said the 2017 forecast calls for a regional occupancy rate of 77 percent — on par with 2016 — with an average daily room rate of $160 and revenue per available room (RevPAR) of $123. The room rate and RevPAR numbers, if they come to pass, would both…

San Francisco Chronicle 03/22/17 After Renovation, Berkeley’s Hotel Durant Keeps Quirky Charm By Kathleen Pender http://www.sfchronicle.com/business/networth/article/After-renovation-Berkeley-s-Hotel-Durant-keeps-11021092.php   It’s not often that you walk into an old hotel under renovation and can’t tell what’s new and what’s not. That’s by design at Berkeley’s Hotel Durant, which has been taken over and remodeled by Graduate Hotels, a Chicago chain that specializes in college towns. Ben Weprin, the chain’s 38-year-old founder, said he wants to create a sense of “vuja de” at the 1928 hotel. Vuja de is what happens when you go somewhere you’ve been many times and it feels eerily new. It’s the opposite of deja vu, which happens when a new experience feels weirdly familiar. In Henry’s, the hotel’s popular restaurant and bar, the maple floor has been refinished but the ornate oak bar and pine walls remain. Los Angeles restauranteur Bill Chait, a Cal alum, and Carl Shuster are taking over Henry’s food and beverage service, Weprin said. He is also talking to the Tartine Group about opening a bakery or cafe in a space on Durant Avenue formerly used as a meeting room. In Henry’s men’s room, a urinal in cardinal red with a Stanford logo is replacing…

Orange County Register 03/20/17 Montage International Debuts Pendry Hotel Brand with More on the Way By Hannah Madans http://www.ocregister.com/articles/montage-747037-pendry-residences.html   It’s been a busy start to the year for Irvine-based Montage International’s Pendry brand. In January, Montage Hotels & Resorts unveiled a new parent company brand, Montage International, which encompasses Montage Hotels & Resorts, Pendry Hotels, Montage Residences and all other operations previously managed under the Montage Hotels & Resorts name. The Pendry brand, which debuted in February in San Diego, is less expensive than the luxury Montage resorts but offers similar amenities. For example: the Pendry San Diego has a “Superior King” room Monday, March 20 listed online for $275, plus $38 in tax and $25 in amenity fees. On the same night, the Montage Laguna Beach has an “Ocean Horizon King” room for $795, plus $38 in resort fees and $112.10 in estimated taxes. The Pendry San Diego in the Gaslamp Quarter includes 317 rooms, six restaurants and bars, a spa and event spaces. A second Pendry hotel, the Sagamore Pendry Baltimore hotel, is scheduled to open Monday, March 20. The 128-room hotel has a whiskey bar, restaurant, outdoor pool and event spaces. Ahead for Montage International is…

Orange County Register 03/16/17 Three More Hotel Projects Planned in Anaheim’s Resort Area Around Disneyland By Joseph Pimentel http://www.ocregister.com/articles/anaheim-746764-hotel-hotels.html   With a “Star Wars” land under construction at nearby Disneyland and the Anaheim Convention Center expansion nearly complete, Bobby Bhagat decided now was the time to redevelop his aging Arena Inn & Suites. “It was an eyesore to the city. It was rundown,” said Bhagat, who purchased the 2.06 acres property at Harbor Boulevard and Katella Avenue in 2007. “The previous owner owned it for 30 years, made no upgrades. … My whole plan when I bought it was to redevelop it, but the recession hit so my plan hit a snag. But things have gotten better.” Bhagat, 37, president of the Arena Group, struck a deal with Prospera Hotels, the developer of the resort district’s Hyatt Place, Homewood Suites and Hyatt House, for a 178-room, five-story Hampton Inn & Suites to replace his motel at 100 W. Katella Ave. The property will feature a modern contemporary design and a second-level pool deck, meeting rooms and a fitness center. “Prospera is a long-term owner and operator at the Anaheim Resort, and we are helping to bring about a new generation…

Los Angeles Times 03/16/17 Does It Make Sense to Spend Up to $289 Million to Repair the Queen Mary? By Hugo Martin http://www.latimes.com/business/la-fi-queen-mary-repairs-20170315-story.html   Buried in a nearly 400-page study on the dire repairs needed for the venerable Queen Mary is a diagram of the 81-year-old ocean liner that looks like something out of an autopsy report. From the bow to the stern, from the keel to the crow’s nest, arrows point out more than 20 repair projects needed to prevent a hull collapse and flooding that threaten the stability of the ship. The most immediate fixes would cost $5.7 million, with a total budget of $289 million for all repairs over the next five years, according to the engineering report handed to Long Beach city officials this month. The question now facing the coastal town is whether the overhaul would be a good investment for a floating tourist attraction that has struggled over the years to remain profitable. City officials have committed to preserving the ship, saying they can pay for the repairs using revenue generated by the ship and the surrounding developments. Those revenues would have otherwise been diverted to the city’s general fund. “The Queen Mary is…

Los Angeles Business Journal 03/10/17 Hotel Books New Owner HOSPITALITY: Host pays $219 million for W property that resurrected Hollywood. By Caroline Anderson http://labusinessjournal.com/news/2017/mar/10/hotel-books-new-owner   A Bethesda, Md., real estate investment trust has acquired the W Hollywood hotel, which has been credited with kick-starting development in the Hollywood and Vine neighborhood. Host Hotels & Resorts paid $219 million for the 305-room hotel, more than 10,000 square feet of retail space, and seven billboards at the property, the company said last week in a press release. The purchase didn’t include the W Residences, a collection of condos. Dallas-based hotel developer Gatehouse Capital and Norwalk, Conn., hotel owner-operator HEI Hotels & Resorts spent $600 million developing the franchise of the W Hotels & Resorts brand owned by Marriott International Inc. The W opened in early 2010 on Hollywood Boulevard, where it is connected to the Red Line subway station, and the surrounding area has since flourished with new retail, restaurants, and hotels. The price of more than $718,000 a room is in line with other recent transactions in the area, said Alan Reay, president of Irvine hotel brokerage Atlas Hospitality Group. Leron Gubler, chief executive of the Hollywood Chamber of Commerce, said…

HotelNewsNow 03/06/17 What California’s Transactions Dip Means for Owners The 2016 California Hotel Sales Survey shows hoteliers couldn’t keep up the record pace in transactions last year, but owners are still looking for deals in the Golden State. By Bryan Wroten http://www.hotelnewsnow.com/Articles/122235/What-Californias-transactions-dip-means-for-owners   REPORT FROM THE U.S.—With high barriers to entry in the California market and, in some cases, seemingly endless demand, hoteliers have scoured the West Coast, looking for any possible way in. However, after riding years of record transaction numbers, the cycle has caught up with California. The latest California hotel sales survey by Atlas Hospitality Group shows sales volume decreased by 30% from 2015 to 2016 to $6.6 billion, and Atlas President Alan Reay said he expects that trend to continue through 2017. “In large part I think it’s because we had such a phenomenal year in 2015, there really was nowhere to go but down,” he said. “It’s unusual to have $9 billion a year for California sales.” Atlas Hospitality Group has been tracking these figures for 20 years, and Reay said in relation to any other year but 2015, 2016 was still a good year for hotel sales. “It’s only when you compare it to…