From the desks of the Hotel News Now editorial staff:
- Hoteliers react, respond to Hurricane Harvey
- Gas prices hit two-year high amid storm issues
- Harvey could strain flood insurance for businesses
- Witkoff buys “undervalued” Las Vegas hotel for $600m
- GSA evaluating Trump Hotel lease
Hoteliers react, respond to Hurricane Harvey: Hurricane Harvey has already proven to be one of the most powerful weather events in recent U.S. history, so Hotel News Now has reached out to an array of hotel companies with ownership or operations in Texas to gauge the impact of the storm from their perspective.
Stephanie Summerall, sales and marketing director for the 312-room Hotel Derek in Houston, said her property has avoided damage and has been sheltering guests who couldn’t leave the city in time to avoid the full impact. She said she’s been moved by how everyone has come together in the face of adversity.
“The team (of about 40 people) at the hotel now have been there since Friday, and they’re working in shifts to bring in people and keep them safe,” she said. “It’s like nothing I’ve ever seen before—front-desk staff, waiters, management, kitchen staff, engineers—some of them haven’t even seen their own homes yet, but they are serving our community. … Even in people’s darkest hours, they’re being extra generous and kind to their neighbors.”
Gas prices hit two-year high amid storm issues: The business implications of the tropical storm are still being sorted out, but one of the earliest impacts is a jump in the price of gasoline as Hurricane Harvey shut down operations at the largest oil refinery in the U.S., according to Bloomberg. Overall, about 18% of the U.S.’s oil refining capacity has been stopped.
The news agency writes that Motiva Enterprises LLC’s Port Arthur refinery “began a controlled shutdown because of severe flooding.” Restarting the refinery depends on how quickly the flood waters recede. As a result, gas prices are spiking, including a 6.6% increase in New York.
Harvey could strain flood insurance for businesses: The Wall Street Journal reports the aftermath of Hurricane Harvey is likely to test the viability of the National Flood Insurance Program, which is “the only option for most (business owners) since private insurers largely got out of the flood business nearly a century ago.” The article claims the program is “sorely out of step with (businesses) needs.”
“The federal program was primarily designed for homeowners and has had few updates since the 1970s,” the newspaper writes. “Standard protections for small businesses, including costs of business interruption and significant disaster preparation, aren’t covered, and maximum payouts for damages haven’t risen since 1994.”
Witkoff buys “undervalued” Las Vegas hotel for $600m: Officials with Witkoff have announced their company, along with New Valley LLC, has purchased the former Fontainebleau at 2755 Las Vegas Boulevard South in Las Vegas for $600 million, according to a news release. Icahn Enterprises is the seller in this transaction.
In announcing the deal, Witkoff officials called the property a “significantly undervalued resort hotel,” which they say they “acquired at a substantial discount to replacement cost.”
“2755 Las Vegas Boulevard South is one of the best physical assets in the country, which is one of the reasons we were attracted to it,” Chairman and CEO Steve Witkoff said in the release. “Furthermore, the resort is ideally located on the Las Vegas Strip, directly across from the Las Vegas Convention Center, which is in the midst of a $1.4 billion expansion and renovation. At the basis, we acquired a well-designed, structurally sound integrated resort at a significant discount to both replacement cost and the implied public market valuations of comparable Las Vegas Strip resorts. We look forward to applying our industry-leading value-enhancing platform to this property to unlock its true growth potential.”
GSA evaluating Trump Hotel lease: The lease for the much scrutinized Trump International Hotel Washington, D.C. is going under the microscope of the General Services Administration, according to a report from CBS News.
"GSA's Office of Inspector General (OIG) is evaluating GSA's management and administration of the ground lease for the Old Post Office Building," GSA told CBS. "GSA welcomes the oversight of the OIG and will continue to work with it on its evaluation."
The GSA had previously said there were no conflicts of interest, even though the original lease said elected officials could not take part in the lease or benefit from it.
Compiled by Sean McCracken.