Skift Take

Is the third time the charm for JetBlue’s takeover of Spirit?

Edward Russell

Spirit Airlines has delayed a key vote on its proposed merger with Frontier Airlines for a third time, suggesting that a hostile bid by JetBlue Airways may be gaining support on its board.

Florida-based Spirit postponed the shareholder vote on the Frontier bid to July 15 from July 8, a statement late Thursday said. The move allows the airline to “continue discussions with Frontier and JetBlue.” The delay was first reported by Reuters.

This is the third delay to the shareholder vote, which was originally scheduled for June 10. Experts say Spirit can see the results of before the meeting, suggesting that each postponement means the airline may not like what it sees.

“We are encouraged by our discussions with Spirit,” JetBlue CEO Robin Hayes said in a statement Thursday following the delay. He reiterated his view that JetBlue’s offer provides “superior value” to shareholders.

JetBlue is offering nearly $3.8 billion in cash for Spirit, while Frontier is offering a mix of cash and stock that equaled roughly $2.4 billion on June 27, a Raymond James analysis found. Frontier, and Spirit, executives argue that their offer is superior because it gives shareholders the opportunity to take advantage of the benefits of the merged airline.

Whichever way the deal goes, the resulting airline would be the fifth largest in the U.S. behind American Airlines, Delta Air Lines, United Airlines, and Southwest Airlines. A combined JetBlue-Spirit would move ahead of Alaska Airlines, while a combined Frontier-Spirit would leap both Alaska and JetBlue.

Updated with statement from JetBlue CEO Robin Hayes.

Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.

Sunday, July 3

Baird added Apple Hospitality REIT as a Bullish Fresh Pick. Baird said slowing growth and recession fears are getting priced into Hotel REIT share prices. While actual and perceived risks are higher today, Baird believes stock prices are much lower to better reflect the uncertainties. They believe Hotel REIT stocks are approaching valuation levels where they have bottomed historically. They did reduce price targets on their coverage. The rank order of their Outperform rated names for 2H22 is APLE, XHR, RLJ, INN, and DRH.

The Points Guy reported that Witkoff Group and Access Industries’ One High Line project hotel will now be a Faena hotel instead of a Six Senses brand. The founder of Access Industries, Len Blavatnik, is also a founding partner of the Faena brand. The new owners took over the stalled mixed-use development in Manhattan’s West Chelsea neighborhood some months ago.

Watermark Capital sold the 226-room Holiday Inn, in New York City’s Chelsea neighborhood, to Two Kings Real Estate for $70.3 million. Watermark Capital reportedly has been marketing the property for sale all year. It fell behind on its mortgage payments in October 2020, and the loan was transferred to a special servicer in January 2021. Watermark was said to have paid $111 million for the hotel in 2013 and invested $8 million in renovations and improvements, according to Crain’s New York.

San Antonio’s Historic Design and Review Commission granted White Lodging final approval to develop a 10-story hotel along South Alamo Street. Originally a nine-story boutique hotel, the revised scope of the project will include a nearly 360-room hotel with a rooftop bar and pool and a street-level restaurant.

Skift Note: The Faena deal is interesting. IHG (InterContinental Hotels Group) lost the deal and won’t be able to open its first U.S. outpost of the Six Senses brand as soon as hoped.

Monday, July 4

CapitaLand Investment Limited’s unit, The Ascott Limited, announced it is acquiring Oakwood Worldwide from Mapletree Investments Pte Ltd. The acquisition of the premier global serviced apartment provider will increase Ascott’s global portfolio by 81 properties and about 15,000 units, leapfrogging Ascott to more than 150,000 units in about 900 properties across over 200 cities in 39 countries. It will add new markets for Ascott’s portfolio, including Cheongju in South Korea; Zhangjiakou and Qingdao in China; Dhaka in Bangladesh; as well as Washington, D.C..

Skift Note: Oakwood has the most inventory of serviced apartments worldwide through its network. Perhaps Ascott will help juice its growth.

Tuesday, July 5

Hyatt Hotels Corporation announced a Hyatt affiliate entered into a management agreement with NTT Urban Development Corporation for Hyatt Centric Sapporo. The 216-room hotel is slated to open in 2024 and will be the third Hyatt Centric property in Japan and the first Hyatt Centric in Hokkaido in northern Japan. The hotel will be part of a new 26-story building complex that is currently under construction.

Fort Partners Puerto Rico LLC announced the acquisition of the Palazzo Marini (3-4), in Rome, for €165 million with plans to develop the property into a luxury hotel that will be managed by Four Seasons Hotels and Resorts. 

Rex LLC is planning a $100M+ renovation and expansion of the historic Hotel Ella, in Central Austin, TX, that will quadruple the number of guest rooms and add a flurry of amenities. Plans include the addition of a fine dining restaurant, a cigar and scotch bar, and a basement wine bar. A rooftop garden and substantial underground parking could also be added. The 47-room Hotel Ella is anchored by the historic Goodall-Wooten Mansion. Rex’s expansion would boost Hotel Ella to 213 rooms with 172 parking spaces. The Goodall-Wooten Mansion will remain as is and become home to the new restaurant, cigar lounge, and wine bar, but the rest of the hotel will be razed to make room for the expansion. 

Hilton announced the opening of Hilton Maldives Amingiri Resort & Spa, marking the expansion of Hilton’s flagship brand into the Maldives. The all-villa resort is the fourth resort under the company’s portfolio of brands in the country.

Marcus & Millichap announced it negotiated the $7.5 million sale of Beach House Inn located in Daytona Beach, FL. The two-story, 50-room beachfront hotel has direct beach access. The buyer is an opportunistic investor out of Georgia.

Skift Note: We’ve been noticing a growing flurry of hotel deals and development news for Japan, though recent currency fluctuations have complicated things.

Wednesday, July 6

Sotherly Hotels (SOHO) gave an update on 2Q22, saying overall occupancy was 69.5% in the quarter, up 17.3% from a year ago. That was still down -10% from 2Q19. RevPAR was $125.05, up 43.2% from 2Q21 but still down -2.7% from 2019. SOHO also said occupancy fell to 67.8% in June from 68.4% in May and 72.4% in April. June RevPAR also dropped to $116.10 from $124.72 in May and $134.33 in April. SOHO tried to make it sound like they were very pleased with the results, but given the uncertainty on how inflation, gas prices, and the airline situation is impacting what was supposed to be another solid summer of leisure, SOHO shareholders may take some solace given the stock is trading like they are heading into trouble. But those caring about the rest of the industry will not like this. 

ARA US Hospitality Trust entered into a partnership and sale agreement to sell a four-property portfolio of Hyatt Place hotels for $32.5 million to Three Wall Capital. The four hotels are: Hyatt Place Pittsburgh Cranberry in Pennsylvania; Hyatt Place Birmingham Inverness located in Alabama; Hyatt Place Cincinnati Northeast in Ohio; and Hyatt Place Cleveland Independence in Ohio. The sale is expected to be completed in Q3 2022. Proceeds from the sale will be used to lower the bank debt or might be redeployed to acquire new assets. 

The Dorian, Autograph Collection and Courtyard by Marriott Calgary Downtown, is getting ready to open on July 21. Located in the heart of Calgary, Alberta’s business district, Marriott’s dual-brand Autograph Collection and Courtyard by Marriott will feature 306 guestrooms and be the city’s first “stacked” hotel.

Stonehill originated a $79.8 million, three-year, floating-rate bridge loan for Churchwick Partners to support the recapitalization and acquisition of a 12-property, extended-stay hotel portfolio consisting of 1,432 rooms. 

Skift Note: We continue to see the “stacked hotel” concept spread worldwide because of the various efficiencies it can bring.

Thursday, July 7

The World Travel & Tourism Council said the travel & tourism sector in Japan will provide a significant boost to the nation’s economic recovery next year, with its GDP contribution set to reach near pre-pandemic levels. The forecast shows the sector’s contribution to Japan’s GDP could reach nearly 40 trillion yen by the end of 2023, just -2.2% below 2019 levels. The data also reveals employment will surpass pre-pandemic levels. Over the next decade, the council expects Japan’s travel & tourism GDP to grow at an average of 2.6% annually.

Over in Indonesia, WTTC expects the travel & tourism sector to create more than five million new jobs over the next decade and will be a driving force behind the country’s economic recovery. Over the next ten years, Indonesia’s travel & tourism sector is expected to grow at an average annual rate of 10%, twice the rate of the overall economy, which is forecasted to grow by 5.1%.

The first Fusion Originals property, the Fusion Original Saigon Centre, will welcome guests this month. Located in Saigon Centre, atop the Takashimaya Shopping Mall, the 99 bespoke accommodation units occupy 10 floors in one of Ho Chi Minh City’s largest and most fashionable mixed-use developments. Fusion is considered Vietnam’s most recognized hotel group. The company has big plans for the Fusion Originals brand and is exploring multiple locations around the country. Like the Saigon Centre facility, these Fusion Originals will be designed to capture local fashion & culture. The Original branding is because Fusion will make sure no two properties are alike, each with its own distinct personality. Fusion Original is one of eight brands that come under the Fusion umbrella. With the new Saigon opening and the recent acquisition of Glow Hotels & Resorts from Thailand, Fusion has more than 4,000 rooms in Vietnam and Thailand.

Skift Note: Japan has surprised some observers by having higher coronavirus vaccine adoption rates than the historical trend for vaccines. The country is eager for tourism to rebound. Meanwhile, Indonesia is often overlooked by Westerners as a growing powerhouse for hotel growth.

A host of travel brands are ramping up efforts to tap into remote workers and digital nomads.

Many are trying their hand at developing new apps or features to build loyal communities, evolving their proposition to include digital spaces as well as physical spaces. It’s a classic case of turning your customers into brand ambassadors. Marketing and customer acquisition costs go down, repeat business goes up.

It’s a risky commercialization of a demographic who in essence represents being a free spirit, but then the travel industry can’t ignore the potential for more profits.

Remote workers are arguably set to be one of the fast-growing markets; just this week the Dutch parliament approved legislation to establish work-from-home as a legal right, while more governments are offering nomad visas (including Indonesia which is looking at a five-year, tax-free option.)

Here are three ways travel companies are reacting.

1. Connecting Solo Travelers

Travel companies seem keen to promote themselves as social connectors, and even the solution to loneliness.

As borders reopened earlier this year, online travel agency Hostelworld was quick off the mark to launch a networking platform called The Solo System for both its app and website. Before the pandemic about 60 percent of its guests were single travelers. It’s now building a platform to help guests work together and organize events.

Selina updated its app last month too with a new “guest connection” feature. After confirmation of booking, guests can opt in to find out who else is staying at the Selina property during their trip. Those who participate can see the first name, photo, and nationality of fellow guests before arrival, which it said makes a helpful ice breaker.

“Our entire platform is designed to inspire meaningful connections, and by adding the capability for our guests to connect with each other and form relationships leading into their stays, we’re creating the opportunities for them to have even more impactful experiences that lead to lifelong friendships,” said global chief marketing officer Elad Nir.

The company has also just published a research project that looked at social connections and remote work.

2. The Entry Point

Another stance travel brands are taking is that of reassurance. Remote Year (a division of Selina) this week restructured its business model with a new Facebook-like, community-focused platform, called RY Nation Hub — “designed to address what we’ve learned from our customers: there is strong demand for community building amongst remote and hybrid workers,” the company said.

Its new entry level “community membership” is designed for the first-timers interested in Remote Year’s curated resources, events and community connections, the company said.

“We’ve pieced together a number of different platforms and technologies to support this one (hub),” Shaun Prime, CEO of Remote Year, told Skift.

3. A Way to Build a Business

Perhaps the strongest proposition, however, is capturing the wandering entrepreneur. Startup Draper House specifically caters to the founders market, and may have the most authentic digital proposition — but it’s not marketing it.

The accommodation startup encourages bookings by touting the hostel infrastructure it has in place to help entrepreneurs connect with investors, and attend workshops. But its founder also told Skift he was surprised by how active its Slack group had become.

“I’ve always wondered, is it possible to create a physical community in parallel with a digital community,” said Vikram Bharati. “It’s a difficult thing to do. What ties you to that digital community?”

Its Slack group already has thousands of members. “People come to the space for a reason, and business is a life-long journey,” he added. “Because we have the ecosystem, people want to be engaged with us.”

It’s a back-to-front approach compared to other travel brands, but one that may work to its advantage as it looks to expand via a franchising model.

A Word of Warning

International travel companies may be embracing new online models, but need to be careful they’re not reinventing the wheel. They’re not the only ones successfully blending the offline with the online.

Other players include Wifi Tribe, which charges an annual membership of $500. Chapter events cost from $1,200 to $2,800, based on the destination, season, and quality of its accommodation.

Nomadbase offers a professional quarterly membership from $30 per month. As expected its online community offers a skill directory, “Nomadbase Academy” content, and a global community chat with business, travel and location channels.

Concerning Remote Year’s new venture, one source familiar with the company’s business model revamp said that it wasn’t anything new.

“Digital nomads don’t work like that, they’re more independent,” he said, preferring to withhold his name. “It’s true some communities exist, but they are used mostly for telling people where they should go next, not so much the whole community feeling.”

He added that Wifi Tribe, for example, had been charging a community membership fee for three years now. “I’m not surprised Remote Year is doing this, it makes sense for them as a business decision. For the digital nomad community in general, and the world, it’s not anything new.”

Another membership platform, Nomadlist, had also been operating for several years, he added. Nomadlist operates as an “Open Startup” which means it is fully transparent and shares metrics like revenue and traffic.

A cursory glance at its revenue chart (below) shows a market that’s expanding rapidly. With a trajectory like that, it’s no wonder travel brands want to gain a foothold in the market.

Sidenotes

The description of corporate travel is being redefined, just take a look at one agency’s bid to use the title “chief journey officer.”

The word “meeting” itself should also be redefined, according to one future of work consultant. “What does meeting mean? With the intentionality of every moment of this hybrid future of work design process, what is intention?” asks Darcy Marie Boles, a culture architect and remote experience designer.

“We need to shift our mindsets to save our workplaces, because our workplaces are falling apart,” she added.

Boles, a former Airbnb exec, was talking as part of meeting platform Hubli’s latest video interview series, where she discussed how to build trust and meaningful relationships when teams meet in person.

She argued that a lot of companies are in transition as they adapt to new remote or hybrid ways of working, and they really should be investing in “redesigning” how people meet. She thinks that the same amount of investment that goes in the “customer journey” when buying an organization’s products should also be invested into the “employee journey” during a period of the Great Resignation.

With so many people dotted around the world, and experiencing so many new things in new locations, she’s urging companies to look at how people feel during every touchpoint when they do actually interact with colleagues, whether asynchronously or in realtime.

10-Second Corporate Travel Catch-Up

Who and what Skift has covered over the past week: Air France, Akasa Air, Bizzabo, Expedia, Hong Kong, Marriott, SAP Concur, SAS, SITA, Spirit Airlines, Star Alliance.

In Brief

Corporate Travel Management Opens Office in Japan

Australia’s Corporate Travel Management has launched CTM Japan, which is a new extension to the global travel management company’s Asian footprint. It joins existing offices in Hong Kong, Singapore, China and Taiwan. The new Tokyo location will meet “increasing customer demand for domestic and international travel in the region,” the company said. Local customers said they wanted on-the-ground servicing from Japanese businesses and international customers operating in the region, said CTM Asia CEO Larry Lo. The expansion follows the acquisition of Singapore’s Safe2Travel  in April 2022.

Startup Travel Platform TripStax Buys TapTrip

TripStax, the online booking tool spun out of corporate travel agency ATPI, has bought TapTrip — another platform that ATPI had previously invested in. TapTrip will become an additional module within the TripStax offering, which already includes travel management applications such as analytics, approvals, content, profile management and tracking. Two of the three TapTrip co-founders, Tom Young and Jack Timblin, are joining TripStax in senior management and development roles. Neil Ruth left the business prior to its acquisition.

Sixt Adds Taxi Platform Jyrney to Its Ride-Hailing App

Mobility platform startup Jyrney has teamed up with Sixt to offer the car rental giant’s customers more access to pre-bookable private hire, taxi and chauffeur-drive options. Sixt’s app already offers on-demand ride-hailing, but the addition of Jyrney will give Sixt’s customers more access to taxis in major cities across the UK. Over the past two years, startup Jyrney has been adding links with established taxi companies, and recently collaborated with Advantage Travel Partnership to launch the Advantage Mobility Hub, which lets Advantage’s corporate travel agency members offer on-demand taxis through a single booking platform.