From the desks of the Hotel News Now editorial staff:
- Part-owner of Plaza Hotel not keen on sale
- US dollar recovers after slide over political concerns
- Freitag: A possible end to the cycle might be near
- OPEC might continue withholding oil supplies
- US, Canada hotel results for week ending 19 August
Part-owner of Plaza Hotel not keen on sale: While the Sahara Group, principal owner of the Plaza Hotel in New York, intends to sell off the famous property, Prince Alwaleed Bin Talal and the Ashkenazy Acquisition Corporation have other plans in mind, The New York Times reports. As partial owners with a 25% stake in the hotel, they have the right to match any bid for the hotel and take it over.
The partial owners joined together a year ago to buy out the hotel from the Sahara Group, intending to fully restore the property, The Times reports.
“We are not selling our stake and are comfortable with our rights relating to any sale by others,” Sarmad Zok, CEO of the prince’s company, Kingdom Hotel Investments, told the newspaper. “We are proud to have partnered with Ashkenazy to reinstate the glory of this unique asset.”
U.S. dollar recovers after slide over political concerns: After dropping 14% against the euro earlier this year, the U.S. dollar has steadied as the world waits to see what Federal Reserve policymakers have to say during a meeting with central bankers in Jackson Hole, Reuters reports. The dollar fell earlier as expectations for tax cuts and other pro-growth developments fell apart.
According to Reuters, traders from Citi told clients: “Our base case is for (Federal Reserve Chairwoman Janet) Yellen to be mildly hawkish. If (the Fed is) going to hike again this year, it will have to be due to loosening financial conditions and stability risks. If she concentrates on laying the groundwork for that, we think the market will take this as USD-positive.”
Freitag: A possible end to the cycle might be near: The U.S. hotel industry’s July performance left something to be desired, with some strong performances balanced with “less-than-impressive” percent changes, writes Jan Freitag, SVP of lodging insights at STR, parent company of Hotel News Now.
Supply and demand growth will hold at equilibrium this year at 2%, he writes, and then occupancy will decline 0.2% in 2018. Average daily rate increased only 1.4% in July, the lowest ADR growth in 2017.
“All this led to barely noticeable positive revenue-per-available-room growth of 0.8%—the lowest this year,” he writes. “You really had to look closely to see it. This is the 89th month of consecutive RevPAR growth and, as you know, we expect more growth as the year progresses, partially because room demand continues to hold. The industry sold 118 million roomnights, which is the single largest room demand in any month ever recorded. Ever.”
OPEC might continue withholding oil supplies: The Organization of the Petroleum Exporting Countries will consider all options to reduce the “global petroleum glut,” including extending its efforts to withhold supplies, The Wall Street Journal reports. OPEC and its partners are holding back about 1.8 million barrels of oil a day through March 2018, amounting to nearly 2% of the world’s supply.
The price of oil has continued to fall since the production cuts began in January 2017, the newspaper reports, and the amount of crude oil in storage has slowly been reduced.
U.S., Canada hotel results for week ending 19 August: The U.S. hotel industry reported positive year-over-year results, according to data from STR. Occupancy grew 1.4% to 72.3%, and ADR increased 2.1% to $127.12, combining to grow RevPAR 3.5% to $91.85.
The Canadian hotel industry also reported positive performance for the same week. Occupancy grew 4.5% to 83.1%. That combined with ADR growth of 8.5% to 175.82 Canadian dollars ($140.24) led to RevPAR growth of 13.4% to $146.09 Canadian dollars ($116.52).
Compiled by Bryan Wroten.