Two weeks after its largest shareholder announced plans to try to take over the company’s board of directors, Morgans Hotel Group Company announced its own plan to clear away debt and grow the hotel management side of its business, according to a report from HotelNewsNow.com’s Shawn A. Turner.
Morgans on Monday said it has agreed to transfer its ownership interest in the Delano South Beach and nightclub operator The Light Group to The Yucaipa Companies in exchange for the cancellation of various Morgans securities held by Yucaipa. The agreements with Yucaipa eliminate debt and preferred stock obligations by $230 million. Morgans will continue to operate the Delano pursuant to a long-term management agreement.
Gross said Morgans will focus its strategy on managing rather than owning hotels. “This deal … dramatically strengthens our balance sheet and better positions us for future growth,” he said.
Meantime, Morgans’ biggest shareholder OTK Associates, sued the company on Monday to try to block the Yucaipa deal, Bloomberg reports.
The gang rape of a 23-year-old woman in December in Delhi and lingering concerns about traveler safety might be having an impact on the number of inbound tourists to India, with inbound tourist arrivals to India falling by 25% during the past three months, according to an industry survey reported by the International Business Times Report.
Further, the number of global female tourists visiting India fell by 35%, according to a survey conducted by India’s Associated Chambers of Commerce and Industry.
“Some tourists have emailed in asking whether it would be safe to travel, and some have changed their minds about traveling to India this year,” according to the association’s report. “Those who are determined to visit India are taking extra precautions and avoiding affected areas.”
Invesco Real Estate has closed its second hotel fund, which comprises approximately €200 million ($256.6 million) of equity.
Considering the assets already in the fund plus additional equity raised will allow the company to grow the fund’s value to approximately €400 million ($513.3 million) with leverage, Simon Redman, managing director, head of product management, Europe, said in a news release.
As of the end of February, the acquisition fund held eight assets in Austria, Germany and the Netherlands.
The number of people using frequent flyer miles to book hotel stays is modestly increasing, according to a February survey of travelers conducted by Go Airport Express, a Chicago-based ground transportation provider.
During 2012, 6% of travelers reported using frequent flyer miles for hotel stays, compared with 8% during this year’s study.
"While the percentage change in use of miles for hotels is small, in real numbers the uptick could be significant," John McCarthy , president of Go Airport Express, said in a news release.
Uganda will start classifying hotels, following the lead of fellow African nations Kenya, Tanzania and Rwanda, according to a report on allafrica.com.
The chairman of Uganda Hotel Owners Association, Haji Ibrahim Muwanga Kibirige, said the classification would help to enhance the standards and attract more tourists into the country.
Compiled by Shawn A. Turner.