Ronn Thomas and Tim Storey were featured in an article entitled “Hot Time for Hotels” in the February 2019 edition of Twin Cities Business.
Economists are regularly faced with the challenge of squaring the micro and macro—seeing how conditions on the ground can be understood in the larger context of data. Comparing the two angles is not always the perfect means, but there are often good lessons to learn.
In late November, Minneapolis Fed outreach staff took a brief tour of central South Dakota, sharing macro data on state and local economic conditions with state banking officials, along with business and community leaders in Pierre, Huron, and Brookings.
Downtown St. Paul has a new hotel alongside a remnant of the city’s past.
The 100-suite Residence Inn by Marriott opened Monday next to the city’s oldest surviving fire station on Grand Avenue close to W. 7th Street on the outskirts of downtown.
“We are pleased to introduce Residence Inn hotels in the downtown St. Paul area,” said Diane Mayer, vice president and global brand manager, Residence Inn, in a statement.
The Hope Engine Company No. 3 firehouse, which was built in 1872 and operated until 1965, had been destined for the wrecking ball as part of the hotel development until neighbors and local history advocates organized to save it two years ago.
The historic Grand Hotel Minneapolis has sold for $30 million to an entity related to Warwick, R.I.-based Magna Hospitality Group.
The 140-room upscale hotel was previously owned by Bethesda, Md.-based Pebblebrook Hotel Trust. The sale price is $3 million less than what Pebblebrook paid for the property in 2010. The company, in a press release, said the sale will amount to $4 million in taxable losses.
The buyer was not disclosed in Pebblebrook’s announcement, but a Securities and Exchange Commission filing shows MHF Properties VI LLC, a Magna affiliate, is the buyer. Neither Pebblebrook nor Magna could be reached for comment.
Hotels are doing better than ever. More rooms have been occupied in 2018 at higher rents than ever before.
“We are at peak performance—and we don’t expect that to change much,” says Jan Freitag, senior vice president of lodging insights for research firm STR.
Hotel owners still worry about the rising costs to operate their businesses, however. Even though the average revenue produced by hotel rooms is likely to keep rising, room rates are not growing as quickly as the cost of operations.
“The name of the game is cost control,” says Freitag.
The Kahler Grand Hotel, Rochester’s oldest hotel property, is getting a major upgrade starting next month.
Kahler Hospitality Group on Thursday announced a $30 million renovation project for the hotel, a plan that will include nearly all hotel floors and expand the size of nearly 200 rooms. The 660-room hotel will cut the number of units to 605 as a result of the project.
The on-again, off-again courtship of Four Seasons Hotels & Resorts by United Properties looks like it’s going to end in a marriage.
The Toronto-based luxury hospitality company has committed to opening a 280-room hotel and restaurant in the 37-story downtown tower that United Properties is planning at the northern end of Nicollet Mall.
It’s hard to imagine how things can get much better for the U.S. hotel sector, and that can make it surprisingly difficult for investors to find acquisition deals that make sense.
“Right now, we are in the strongest occupancy environment ever recorded,” says Jan D. Freitag, senior vice president of lodging insights for research firm STR, based in Hendersonville, Tenn.
That’s great news, but many potential buyers of hotel properties now hesitate to assume that they can squeeze much more income out of new acquisitions because average occupancy rates are already so high. Many potential sellers are also hesitant. That’s because even if they can get a good price for a hotel property, after the transaction closes they may not be able to find another attractive property to buy.
Bloomington officials are ramping up their effort to sell the Thunderbird Motel site just north of Mall of America.
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