Maryland’s hotel sector enjoys broad uptick

Recovery seen in sales, openings, renovations, profits

by Kevin James Shay

Staff Writer – Gazette.Net

Hotel activity is picking up in Maryland, with revenue and jobs rising, at least one new hotel opening recently and several more being upgraded.

“Activity in the hotel sector has increased,” said David Reel, president and CEO of the Maryland Hotel & Lodging Association. “The economy seems to be improving. A lot of hotels are seeing a better year.”

For the first 10 months of 2012, occupancy at Maryland hotels increased by 1.0 percent to 63.5 percent from the same period in 2011, according to Smith Travel Research, a Hendersonville, Tenn., market research company that tracks the hotel industry. That’s the highest occupancy rate since 2007. Revenue per available room rose by 3.3 percent to $73.10.

Moreover, hotels and restaurants in the state gained about 6,000 jobs in the past year, a 3 percent increase, according to the latest federal labor figures.

On Monday, a 171-room DoubleTree by Hilton reopened in Pikesville after about $1 million worth of upgrades that included new carpeting, bathrooms and furniture. The hotel is owned and operated by Pikesville Hotel LP under a franchise agreement with a subsidiary of Hilton Worldwide.

In addition, executives with Modus Hotels of Washington, D.C., said Monday they plan to make “several million dollars” worth of renovations to the 97-suite Brookshire Suites in downtown Baltimore after purchasing the hotel. Renovations will begin in phases next month and are expected to be completed by the end of 2013.

“We believe the hotel will be well positioned as an affordable, lifestyle hotel experience, something not offered by the existing hotels in the Baltimore market,” Aaron Katz, president and CEO of Modus Hotels, said in a statement.

Another boost to the industry was last month’s opening of the 120-room TownePlace Suites by Marriott, a $14 million hotel in Frederick. Hyatt also is interested in putting a new hotel in the Jefferson Place Corporate Campus & Town Center, which will be built on the U.S. 340 and Md. 180 corridor in Frederick, and Hilton also has shown interest in opening a hotel in the city, according to Blaine R. Young (R), president of the Frederick County Board of County Commissioners.

Stronger bottom line

Maryland hotel companies report stronger financial results so far this year than last year. Franchiser Choice Hotels International of Silver Spring has seen revenues rise by 9 percent to $513.2 million during the first nine months of 2012 over the same period last year. Net income rose by 12 percent to $96.2 million.

Marriott International in Bethesda saw revenues rise by 7 percent in the first nine months this year from the same period last year to $8.1 billion, while net income jumped by 23 percent to $390 million. Marriott on Monday also welcomed back former Republican presidential candidate Mitt Romney to its board of directors. Romney was on the board from 1993 to 2002 and then from 2009 until 2011. The Romney and Marriott families have a long history together.

In another deal announced Monday, Bethesda real estate investment trust RLJ Lodging Trust agreed to acquire the 231-room Hilton Cabana Miami Beach for $71.6 million. The hotel was closed in 2007 to be converted to condominiums but went into foreclosure. RLJ plans to reopen the hotel by the end of 2013.

“We see this acquisition as an excellent opportunity to enter a gateway market with multiple demand generators,” Thomas J. Baltimore Jr., president and CEO, said in a statement. “The Hilton brand is underrepresented in this market, which should provide for outsized performance from this hotel.”

And still another deal announced Monday was a European joint venture involving Bethesda lodging real estate investment trust Host Hotels & Resorts buying five hotels in Paris and Amsterdam for about $572 million.

The Ritz-Carlton Hotel Co. of Chevy Chase also is expanding — into Kazakhstan with a 145-room hotel. The Ritz-Carlton, Almaty is expected to open in late 2013.

Voters’ passage last month of gambling expansion should provide a huge boost to Maryland hotels, Reel said. Existing slots parlors could start offering table games early next year, depending on regulators, he said.

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