AH-July-2024
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News
10
www.asianhospitality.com
July 2024 | Issue 227
ilton Hotels & Resorts retained its
title as the world’s most valuable
hotel brand for the ninth consecutive
year, while Hyatt Hotels & Resorts secured
the second spot again, according to the
latest data from Brand Finance. Meanwhile,
India’s Taj Hotels is the world’s second-
fastest-growing brand, primarily due
to revenue growth and improved brand
strength.
Hilton’s brand value is estimated at $11.6
billion in the Brand Finance Global 500 2024
ranking. Hyatt holds a value of $6 billion,
and Taj increased its brand value by 45
percent to $545 million, Brand Finance said
in a statement.
“Many top hotel brands have struggled
to grow their brand value as robustly as in
the years leading up to 2020, and the Brand
Finance Hotels 2024 ranking shows that
these challenges are ongoing as the industry
recovers,” said Henry Farr, Brand Finance’s
associate director. “Despite an uptick in
travel and hotel demand, the actual growth
hasn’t matched expectations, resulting
in slight declines or minimal brand value
growth for the world’s leading hotel brands.”
Hilton and Hyatt are the only two U.S.
hotel brands to feature in the list, Brand
Finance data showed.
Eight of the top 10 brands in the ranking
decreased in brand value, and more than
60 percent of U.S. brands featured also saw
a decrease. This indicates that the industry
is struggling to fully capitalize on brand
growth potential despite rising demand, the
London-based brand valuation consultancy
said.
Rise of Taj
Taj became the world’s second fastest-
growing brand, after Sheraton’s Four Points,
climbing three positions in the Brand
Strength Index (BSI) ranking to become the
world’s strongest hotel brand, according
to Brand Finance data. With an improved
BSI score of 92.3 out of 100, Taj earned a
AAA+ rating, the highest awarded by Brand
Finance.
Indian Hotels Company Ltd, owned by
Tata Group, operates the Taj Group of
hotels.
Brand Finance noted that Taj excelled
in crucial brand strength metrics like
familiarity, consideration, recommendation,
and reputation, reinforcing its dominant
position in India's hotel sector.
“We are delighted for the iconic brand
Taj to be honoured as the World's Strongest
Hotel Brand yet again, in its milestone 120th
year. Receiving this recognition for four
years, thrice as number one in the world,
is a testament to the brand’s century-old
legacy of pioneering destinations, setting
global benchmarks, and showcasing Indian
hospitality to the world,” said Puneet
Chhatwal, IHCL’s managing director and
chief executive ofÏcer.
“This achievement underscores the trust
and affection of our guests and the steadfast
dedication and commitment of our
colleagues in delivering warm and sincere
service, a true hallmark of Taj,” Chhatwal
added.
Report: Hilton, Hyatt lead in
value, Taj is strongest brand
Hilton and Hyatt are the only two U.S. hotel brands to
feature in the list
Hilton remains the world’s most valuable hotel
brand for the ninth year in a row, with Hyatt
holding onto second place, according to Brand
Finance. India's Taj is the world’s second-fastest-
growing brand, driven by revenue growth and
enhanced brand strength.
eachtree Group Recently issued a
$40-million retroactive Commercial
Property Assessed Clean Energy loan to BLG
San Diego LLC for the newly opened 147-room AC
Hotel San Diego Downtown Gaslamp Quarter. The
proceeds enabled BLG to reduce its senior loan
with California-based Preferred Bank and E.Sun
Commercial Bank to under $20 million, thereby
mitigating the banks’ exposure, Peachtree said in a
statement.
“This innovative capital structure significantly
alleviated the immediate financial pressures,
enabling the hotel to establish a solid cash flow
foundation during its initial years of operation,”
said Greg Friedman, managing principal/CEO,
Peachtree Group.
Peachtree is led by Friedman, with Jatin Desai as
managing principal and chief financial ofÏcer, and
Mitul Patel as principal.
The CPACE financing is amortized over more
than 30 years, with no payments required for the
first year, followed by five years of interest-only
payments.
“When we opened the AC Hotel San Diego
Downtown Gaslamp Quarter in March 2023, there
was a sizeable disconnect between hospitality
fundamentals, which are strong, particularly in San
Diego, while the debt markets were deteriorating
meaningfully,” said Brad Honigfeld, the New Jersey-
based Briad Group’s founder, chairman and co-
CEO. “The Fed’s tightening process and rising fund
rates drove up the cost of debt considerably.”
The new hotel is in downtown San Diego’s
Gaslamp Quarter, known for its restaurants, shops
and nightlife.
“Our hotel was benefiting from its location and
performing to its original underwriting, but the debt
costs were straining cash flows,” Honigfeld said.
Retroactive CPACE funding provides advantages
for property owners, Peachtree said. It operates
like standard pre-project funding but 100 percent
of the loan proceeds can reimburse owners for
previously incurred costs. This allows for better
loan terms and improved cash flow after project
completion.
“The financial relief it provides not only ensures
the hotel’s success but also positions it for long-
term stability,” said Friedman. “By reducing the
financial burden in the early years, owners can
focus on delivering exceptional guest experiences
and achieving operational excellence.”
By 2024, $5.8 billion in U.S. hotel-securitized
loans will need repayment, refinancing, extension,
or sale, according to Peachtree, citing JLL Research.
In this tough lending market, CPACE financing has
become a liquidity source as owners face upcoming
debt maturities and limited refinancing options.
It has quickly gained traction in commercial real
estate, reaching $7.2 billion in the U.S. in just over a
decade, according to PACENation.
Peachtree issues $40 million CPACE financing for AC Hotel San Diego
BLG San Diego LLC opened the 147-room hotel in March 2023
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