5 things to know: 6 March 2017
5 things to know: 6 March 2017
06 MARCH 2017 10:56 AM

From the desks of the Hotel News Now editorial staff:

  • AccorHotels eyes luxury, upper upscale with Rixos partnership
  • New CEOs named at Diamond Resorts, Equinox
  • Analysts scope out roadblocks to Ashford-FelCor deal
  • Eastern Europe hotels rise in value as west declines
  • Relaxed rules could further boost China investment overseas

AccorHotels eyes luxury, upper upscale with Rixos partnership: “With a primary focus on developing global activities in the resort segment,” AccorHotels has entered into a strategic partnership that, when closed, will give it 50% interest in a joint venture management company with Rixos Hotels, according to a company news release.

The move is in line with AccorHotels’ goals of expanding its presence in the upper upscale and luxury hotel segments, the release states.

“Through this joint venture, AccorHotels will integrate in its network 15 iconic hotels that are ideally located in premium resort markets in Turkey, (United Arab Emirates), Egypt, Russia and Europe,” the release states, adding that these markets “benefit from strong room rate performance.”

Also as part of the deal, Rixos Hotels will rebrand five city center hotels under AccorHotels flags.

New CEOs named at Diamond Resorts, Equinox: A leadership shakeup at Las Vegas-based Diamond Resorts has Matthew Avril stepping down as CEO, to be replaced by current COO Michael Flaskey, and Ken Siegel being promoted from General Counsel and Chief Administrative Officer to president of the company.

Avril, a former executive at Starwood Hotels and Resorts Worldwide, is stepping down from the position that he was appointed to in January, citing “family and personal reasons,” according to a company news release.

Meanwhile, in another hotel leadership change, Two Roads Hospitality CEO Niki Leondakis has been tapped as the new CEO of Equinox Fitness Clubs, according to a story by the New York Post. Her new company’s growth goals include launching Equinox Hotels by 2019.

Analysts scope out roadblocks to Ashford-FelCor deal: Ashford Hospitality Trust’s takeover bid for FelCor Lodging Trust faces a complicated road ahead, according to analysts who spoke with Hotel News Now’s Bryan Wroten and Sean McCracken.

The proposal by Ashford to acquire FelCor has been debated publicly in a series of back-and-forth news releases since it was announced 21 February.

Ashford’s path to a deal could come down to an attempt to win investor sentiment for a slate of deal-friendly candidates for the FelCor Board of Directors, but winning that sort of proxy battle could be difficult, analysts said.

“The challenge is, historically, proxy advisors have not looked favorably at externally advised (companies in) deals,” said C. Patrick Scholes, managing director and lodging and leisure equity research analyst for SunTrust Robinson Humphrey. “That’s a big hurdle that Ashford has to overcome.”

Eastern Europe hotels rise in value as west declines: Hotel room values are up 11% in Eastern Europe and down an average of 2.1% in Western Europe, according to a report released by HVS during the International Hotel Investment Forum in Berlin.

The 2017 European Hotel Valuation Index shows Bratislava, Slovakia, hotels at the top of the list, with an 18.9% rise in room value. Rounding out the top five valuation increases in Eastern Europe are Sofia, Bulgaria (+16%); Bucharest, Romania (+14.6%); Budapest, Hungary; and Prague (both +9.9%).

“Many Eastern European markets are benefitting from the misfortune of Western Europe,” which includes terrorism and Brexit fears, said report coauthor Nicole Perreten, senior associate at HVS.

Bucking the downward trend in Western Europe is Barcelona, Spain, which experienced a record 13.8% rise in hotel room value in 2016.

Relaxed rules could further boost China investment overseas: A plan by the China Insurance Regulatory Commission to relax rules for the country’s biggest and most solvent insurers could further open up Chinese investment overseas, including in hotels, Reuters reports.

Reuters data cited outbound mergers-and-acquisition volume by Chinese insurers doubled in 2016 to $11 billion.

“Chinese insurers have … been looking to buy hotels and other real estate assets from New York to London to find steady and higher yields,” the article states.

Compiled by Robert McCune.

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