What a difference a few months make. Last November, merger discussions between Morgans Hotel Group and SBE Entertainment Group collapsed. But just yesterday it was announced that Morgans Hotel Group agreed to be purchased by Sam Nazarian’s SBE for $2.25 a share in cash—a per-share price 69 percent higher than Morgans’ May 5 closing price. The total enterprise is valued at about $794 million. SBE, with the SLS, Hyde, and Redbury hotels under its umbrella, will acquire all Morgans’ brands in the deal. This purchase gives Morgans a needed jump in shares—after falling 68 percent in the past 12 months, shares for the company jumped 10 percent yesterday. This deal puts an equity value on Morgans of about $82 million. To read more, click here.
According to analysts at Lodging Econometrics (LE), through March of this year there were 186 hotel transactions where selling prices were reported into the public domain for an Average Selling Price Per Room (ASPR) of $148,918, a 7 percent decline over the record level set in 2015. LE additionally said that they expect both transaction volume and ASPR to return to their upward trend line pace later in the year.
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At Marriott International’s annual shareholders meeting on May 6, openly broadcast to the public, CEO Arne Sorenson updated shareholders and listeners about the highly talked-about Starwood deal. He said that the transaction still needs to clear regulatory hurdles, is expected to close mid-year, and will ultimately provide value to Marriott’s shareholders and owners, as well as Starwood and Marriott associates. During the meeting, Sorenson emphasized that Marriott owns less than 10 hotels, which will eventually all be for sale. According to Skift, this means Marriott will likely encourage the sale of Starwood’s 23 owned real estate assets–two that could soon be sold to the Qatar Investment Authority, and five of which will be transferred to Inverval Leisure Group upon the closing of Starwood’s timeshare spinoff. To read more, click here.
In line with the performance of the broader hotel industry, Ashford Hospitality Prime reported 2.1 percent RevPAR growth for Q1. Despite facing a relatively tough year-over-year comparison, Prime generated strong adjusted EBITDA and adjusted funds from operations per share growth of 32 percent and 46 percent, respectively. Read more here.
Although online hotel booking numbers continue to grow, a study released in 2015 by AH&LA found that an estimated 15 million hotel bookings are fostered through fraudulent websites and call centers that have no affiliation to the hotel being advertised. For more information on how this deception impacts guests and hoteliers, click here.