Dive Brief:

• Apple Hospitality REIT Inc. acquired the 175-room Courtyard by Marriott Salt Lake City Downtown for $48.1 million and the 159-room Hyatt House Salt Lake City/Downtown for $34.3 million, the investment trust announced Thursday. The trust also acquired a 346-space parking garage that serves both hotels.
• With the acquisitions, Apple Hospitality fortifies Utah’s presence in its national hotel portfolio, which spans 222 hotels, or 29,263 guest rooms, across 37 states. The trust already owns a Marriott hotel in Salt Lake City and one just south of the metro area, in Murray, Utah.
• Apple Hospitality plans to continue investing in the Salt Lake City market, which has experienced occupancy, ADR and RevPAR growth in the last year and is poised to see continued growth from increased leisure and business travel. 

Dive Insight:

Located adjacent to each other, the Courtyard and Hyatt House properties are situated in a bustling part of downtown Salt Lake City, a market that offers a “wide variety of business and leisure demand generators,” Apple Hospitality said in its announcement. 

The properties are directly across from sports and entertainment complex Delta Center and within walking distance of Salt Palace Convention Center and the Utah State Capitol. The properties are also near the University of Utah, Salt Lake City International Airport, numerous performing arts venues and the Cottonwood Canyons and Park City ski areas. 

The hotels often cater to business travel driven by major software development, hardware manufacturing and information technology firms that are based in the city, as well as the defense, oil and gas, transportation, tourism, health care and financial service industries, the trust noted.  

In a statement, Nelson Knight, president of real estate and investments at Apple Hospitality, said the acquisitions expand “our presence within the vibrant Salt Lake market, an area well known for its business-friendly environment, attractive cost of living, cultural attractions and proximity to outdoor recreational activities, which has seen significant economic growth in recent years and is poised for continued expansion.” 

Research by commercial real estate brokerage Marcus & Millichap shows that increased international travel to the Salt Lake City market, driven by its proximity to the mountains, aided local hospitality operations over the last year. As of June, the company found, hotel occupancy was up 100 basis points year over year, while ADR increased 11.1% and RevPAR increased 12.7% in the same period. 

In its mid-year report, Marcus & Millichap predicted leisure travel would stabilize through the remainder of 2023, leading to a downshift in occupancy. But growth will continue, albeit at a slower rate, for the market’s ADR (+8.6%) and RevPAR (+7.6%), the company forecasted, adding that renewed momentum will rely on recovering business travel. 

On the national level, it’s been predicted that while leisure travel will soften for the remainder of the year, business travel will likely hold strong. 

Apple Hospitality plans to continue investment in the Salt Lake City market. The trust already has another area hotel, a 192-room Embassy Suites by Hilton, under contract for approximately $36.8 million, expected to close by year-end.