The July acquisition of the Bardessono Hotel and Spa in Yountville is paying off for Ashford Hospitality Prime, which saw a significant boost from the property to its Q3 revenue.
The purchase of the Napa Valley hotel was just one of several in the past year in what is becoming a hot Bay Area hotel market with acquisitions and room rates on the rise. With boutique hotels all the rage (to the point that some large hotel chains are going for a boutique feel in some of their properties), the Bardessono Hotel was a strong buy for Ashford.
The REIT purchased the 62-room luxury hotel in July for $85M, noting at the time its Napa Valley location was "one of the strongest and most desirable lodging markets in the country." The property's RevPAR of $554.01, with 81.9% occupancy and an average daily rate of $676.12 at the time of the deal, is the highest in Ashford's portfolio.
In Q3, Ashford's overall rooms revenue grew $5.3M to $70.6M (up 8.2% from a year ago). Of that increase, $3.6M was a result of room revenue from the Bardessono Hotel.
Ashford reports its overall rooms expense was up $765k to $14.8M (up 5.4% from a year ago), with $622k of that related to the Bardessono Hotel.
Ashford's other Bay Area property, the San Francisco Courtyard Downtown, also had an increase in rooms revenue in Q3, up $452k from a year ago. Ashford attributed the increase to 6% higher room rates, slightly offset by a 123 basis point decrease in occupancy during the quarter. For the first nine months of this year, the 405-room hotel in the heart of SoMa saw a $2.1M increase in revenue, reflecting 5% higher room rates during that time and a 273 basis point increase in occupancy.
Big Bay Area hotel transactions this year have included CBRE Global Investors' purchase of Redwood City's Sofitel San Francisco Bay earlier this month for $154.5M; the $450M sale of Fairmont San Francisco in November; Lowes Corp's purchase of the former Mandarin Oriental San Francisco for a reported $1M/room; and Larry Ellison's purchase of Palo Alto's Epiphany Hotel for $832,500/room.
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