5 things to know: 11 May 2017
5 things to know: 11 May 2017
11 MAY 2017 9:08 AM

From the desks of the Hotel News Now editorial staff:

  • UK budget brands might sweep away all else
  • Owners consider deals while watching for downturn
  • US H-2B visa mismatch likely to hurt small hotels
  • UK faces all-round recruitment struggle
  • Whitbread claims 100% renewable energy usage

U.K. budget brands might sweep away all else: With budget brand hotels now accounting for nearly two-thirds of the United Kingdom’s hotels room supply, there is concern that the segment’s continued rise will result in other segments stagnating across the country, according to the Hotel Bulletin Q1 2017 report published by HVS, AlixPartners, STR and AM:PM. (STR and AM:PM are HNN’s parent and sister companies, respectively.)

Currently, Premier Inn (from Whitbread PLC) and Travelodge together account for 52% of all branded rooms, according to the report. They are also the most active brands in terms of future growth, the report added, with active hotel pipelines of 5,086 and 2,660 rooms, respectively. In comparison, the third-place brand in terms of current supply, Holiday Inn, has a U.K. pipeline of only 430 keys.

Owners consider deals while watching for downturn: According to both hotel-industry sellers and buyers at the 27th annual Meet the Money conference, no one is quite sure where the market cycle sits at the moment, as both sides continue to weigh their investment approaches, writes Hotel News Now’s Sean McCracken.

Chuck Pomerantz, managing director at Garrison Investment Group, said he felt better about 2017 than 2016 on the acquisition front, but that there still are not a lot of deals out there that fit his return thresholds. “On the dispositions side, we were very active in 2016 and sold a lot of our assets. … There’s still a disconnect in pricing, and we’ve had a little bit tougher of a time (selling) in 2017,” he said.

Brett Stewart, SVP of development acquisitions for capital markets at Interstate Hotels & Resorts, said a major challenge is trying to figure out how to underwrite cycle dynamics.

U.S. H-2B visa mismatch likely to hurt small hotels: A shortage of foreign workers applying for H-2B temporary work visas for the U.S. is likely to hurt small hotels and other hospitality businesses, according to The Wall Street Journal, despite recent steps by Congress to ease the situation.

Applications from owners, including hoteliers, surged this year because of the tight job market and because an exemption for returning workers expired on 30 September. The Journal reported that “Congress declined to extend it amid concerns from labor unions and those opposed to foreign workers. That meant firms needed to request new visas for workers that had come to the U.S. under the program last year but were no longer in the country.”

U.K. faces all-round recruitment struggle: On the other side of the Atlantic Ocean, employers in the U.K. also are having difficulties filling vacancies, with The Recruitment & Employment Confederation stating in a news release that it has seen the sharpest fall in 16 months in the number of available candidates. The agency worries the situation will become more acute as the U.K. gets closer to the leaving the European Union.

The REC’s CEO Kevin Green said the U.K. has the “lowest unemployment rate since 2005, and people already in work are becoming more hesitant about moving jobs amid Brexit uncertainty. Meanwhile, the weakening pound and lack of clarity about future immigration rules is putting off some EU nationals from taking up roles in the U.K.”

Whitbread claims 100% renewable energy usage: Whitbread PLC, which operates the United Kingdom’s largest hotel chain by asset numbers, Premier Inn, claims a new energy deal means that its entire estate now is powered by 100% renewable energy, according to a news release.

The firm, which also operates the High Street coffee shop brand Costa Coffee, claims all of its 68,000 Premier Inns now have renewable energy, although online energy news site Edie.net reports the “exception (is) 15 Whitbread sites where small-scale combined heat and power units have been installed.”

Compiled by Terence Baker.

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