From the desks of the Hotel News Now editorial staff:
- Depressed Canadian, UK currencies cloud US hotel horizon
- Improved corporate earnings to further buoy US
- IHG stocks lead UK optimism, record-shares high
- Carey Watermark buys Ritz-Carlton, San Francisco
- British staycations biggest threat to Irish hotels
Depressed Canadian, U.K. currencies cloud U.S. hotel horizon: According to a Hotel News Now roundtable of experts, depressed currencies, including those of Canada and the United Kingdom, will negatively affect U.S. hotel performance, but that should be outweighed by strong U.S. growth, robust tourism marketing campaigns and general increased hotel demand.
The experts added the incoming Donald Trump administration should not change the landscape dramatically and there will likely be improvement in the performance of U.S. oil markets.
“Historically, an election in and of itself in the U.S. doesn’t move the needle in any meaningful way on hotel demand, though subsequent policy changes may have a substantive influence,” said Carter Wilson, VP of consulting and analytics at STR, HNN’s parent company. “Generally speaking, the hotel economy is tethered to the broader economy, and if the overall economy continues to grow—even weakly—we shouldn’t expect any jarring changes in the hotel economy.”
Improved corporate earnings to further buoy U.S.: Another positive indicator of the U.S. economy’s outlook is the increased health of U.S. corporate stocks, which have seen a 6.7% increase since the first half of 2016, according to The Wall Street Journal, and, “much of it since Election Day, has largely been attributed to the potential for tax cuts, looser regulation and fiscal spending under the President-elect.”
The WSJ also reported the S&P 500 increased 9.5% in 2016, which is its largest gain since 2014: “While it’s only one quarter of earnings data, the return to growth is giving investors more reason to believe the stock market will keep climbing in 2017.”
IHG stocks lead U.K. optimism, record-shares high: The stock news from the U.K. provides more optimism for improved corporate performance, with the country’s FTSE100 index rising to a record high on the first day of trading for 2017, according to Reuters.
The index increased by 0.3% to 7,165.33, led by a 3.1% rise in stock values for InterContinental Hotels Group. Broker Barclays said “IHG was the best play in the leisure sector on a possible rebound in U.S. growth,” according to Reuters.
Carey Watermark buys San Fran Ritz-Carlton: Real estate investment trust Carey Watermark Investors 2 has acquired the 336-room Ritz-Carlton, San Francisco for an undisclosed sum, according to a news release.
Located in the city’s Nob Hill district, the hotel was built in 1909 and became a Ritz-Carlton property in 1991. According to the release, more than $20 million of capital expenditure has been invested into the property since 2014. The former owner, Thayer Lodging Group, bought the property in July 2013 for approximately $161 million.
British staycations biggest threat to Irish hotels: The president of the Irish Hotels Federation said the biggest threat to the Republic of Ireland’s hotel industry is British travelers electing to book staycations, according to Irish news outlet Fora. The segment has increased with the weakening of the pound sterling since U.K. voters voted in favor of Brexit in June.
IHF President Joe Dolan said that British tourists in Ireland accounted for 42% of all visitors and added that “last month, 18% of the IHF’s 800 members reported a drop in bookings from Northern Ireland and the rest of the U.K.”
Compiled by Terence Baker.