StaySmart Insights: Rate Trends & Hospitality Headlines

Good day to our insightful readers! Gabriel Wacker here with another issue of Viciniti Corporate Housing 's StaySmart Newsletter, your guide to the pulse of the corporate housing and travel industry. This week we're dissecting the extended-stay market's pricing dynamics, a bold new alliance in travel by Frontier Airlines , key points from the hospitality giants' annual reports, and a peek into the legal battles shaping rental pricing. Grab your cup of coffee and join me on this investigative journey.

Watch Gabriel's Full Recap:

Extended-Stay Economics | Sluggish Supply Spike

Extended-stay hotel room supply sees smallest growth, with rates climbing.

In 2023, the U.S. extended-stay hotel room supply grew by a record-low 1.8% year over year, with the economy tier witnessing the highest increase at 6.6%. Average daily rates rose, driving revenue per available room growth despite a decline in occupancy. This minimal growth reflects a trend observed since 2011, and experts predict a similar pattern in the next two years due to higher interest rates and construction costs. Despite a recent rebound in the extended-stay pipeline, the risk of oversupply is deemed low nationally. Extended-stay hoteliers are expected to maintain pricing power following a year of rate increases in 2023.

Artilce Link in Comments

Frontier & Landing | Nomad Pass Unveiled

Frontier Airlines and Landing introduce a game-changing travel and stay pass.

Frontier Airlines has partnered with apartment leasing company Landing to launch the Nomad Pass, combining unlimited flights with furnished rentals. Priced at $1,495 per month, the pass offers unlimited Frontier flights and stays in Landing's 20,000 units across 375 U.S. cities. The pass caters to digital nomads, allowing flexibility in planning accommodations up to a month in advance. Passholders can choose from various apartment types, with Landing's amenities and social events accessible. The pass suits extended stays and overlaps well with Frontier's key markets. Landing's two-tier membership accommodates Nomad Pass holders, offering a cost-effective, all-inclusive travel and accommodation solution.

Artilce Link in Comments

Marriott vs. Hilton | Annual Insights

Annual reports reveal Marriott Hotels and Hilton Hotels & Resorts 's latest strategies and numbers.

The latest 10-K filings for Marriott and Hilton highlight key aspects of their financial performance and business strategies. Hilton is rapidly gaining ground in loyalty program membership, boasting 180 million members, a 19% YoY increase, compared to Marriott's 196 million members with a 10.7% gain. If growth rates persist, Hilton could surpass Marriott in loyalty members by mid-2025. However, Marriott's loyalty program generates higher total rewards for members.

Both companies have seen increased profitability over the past six years. Marriott's adjusted EBITDA margin rose from 62% in 2017 to 72.9% in 2023, while Hilton's margin increased from 56% to 69%. Marriott's vacation rental business, Homes & Villas by Marriott Bonvoy , is small compared to Airbnb , while Hilton avoids the alternative accommodations segment.

Hilton prioritizes diversity and inclusion, with 43% of its global workforce being women. In terms of debt, Hilton has a higher debt load (59% of total assets) compared to Marriott (46%). Both companies attribute 78% of their total revenue to the U.S. market.

Marriott has gained U.S. hotel market share, increasing from 15% to 16% between 2017 and 2023. The overhaul of Marriott's 喜来登 brand has underperformed despite a $500 million renovation investment. Marriott disclosed details on its City Hotels acquisition, costing approximately $85 million.

Hilton outlined climate goals, aiming to reduce carbon emissions intensity by 75% for managed hotels and 56% for franchised hotels by 2030. Marriott committed to science-based emissions reduction targets, with validation expected in 2024. Marriott also increased fees for its food and beverage services to hotel owners, raising the royalty range from 2-3% to "up to 4%."

Artilce Link in Comments

?

RealPage Controversy | Antitrust Allegations

RealPage, Inc. faces legal heat over rental price collusion claims.

Tenants in a Jersey City building, 20 minutes from the World Trade Center, allege inflated rent hikes facilitated by RealPage software. The class-action lawsuit involves 527 units, accusing RealPage and 34 landlords of violating the Sherman Antitrust Act. The U.S. Department of Justice and Washington, D.C.'s attorney general support the case, claiming RealPage fosters a housing cartel by manipulating rental market prices through shared data. RealPage argues its tools use anonymized data, offering pricing recommendations to increase landlord revenues. The company, acquired for $10.2 billion in 2021, denies liability for alleged acts. Tenants discovered the issue after a 2022 ProPublica investigation.

Artilce Link in Comments

As this edition of #StaySmart wraps up, we invite you to ponder the shifts and strategies that are reshaping our sector. From pricing power in a tight market to innovative travel solutions and the legalities influencing corporate decisions, the landscape is ever-changing. If you're curious to discuss these developments or want to share your perspective, reach out or comment below—we value your voice in the conversation. Stay on the forefront of industry news, strategies, and more with Viciniti. Until next time, keep learning, keep leading, and always... Stay Smart.

?? Don't miss out on future insights—subscribe to our #StaySmart Newsletter now!

?? For deeper dives into each week’s topics, subscribe to our YouTube channel.

?