5 things to know: 28 November 2017
5 things to know: 28 November 2017
28 NOVEMBER 2017 10:42 AM

From the desks of the Hotel News Now editorial staff:

  • CBRE forecasts sustained growth for US hotel industry
  • Senate Republicans face obstacles to passing tax bill
  • Revenue managers on overcoming rate struggles in NYC
  • Panama hotel wants to remove Trump name
  • Seventh Circuit rules OTAs don’t pay full tax on rooms

CBRE forecasts sustained growth for U.S. hotel industry: CBRE announced Tuesday the U.S. hotel industry is expected to “enjoy continued levels of record occupancy through 2019,” according to a news release. If the industry is able to achieve this, it will mark a 10-year period of uninterrupted growth in occupancy.

Occupancy is growing, but increased supply growth, low inflation, average-daily-rate growth, the sharing economy and other factors are still challenges for hoteliers.

“Low ADR growth could have an impact on the profitability of hotels. With compensation costs rising more than 4%, hoteliers may not be able to sustain the growth in profit margins observed the past seven years. On average, hotels still should be able to enjoy gains on the bottom line, but the flow-through will not be as efficient,” Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research, said in the release.

Senate Republicans face obstacles to passing tax bill: Senate Republicans are still working to pass a tax overhaul, but concerns from multiple GOP senators might make it harder to gather enough votes to pass the bill, The Wall Street Journal reports.

One group of senators wants “deeper tax cuts for so-called pass-through businesses” before giving their full support to the bill, and others are “concerned about the $1.4-trillion addition to budget deficits the bill would cause, and these senators are wary that it won’t generate enough economic growth to pay for itself,” the newspaper reports.

Hotel executives told Hotel News Now what changes they’d like to see to the U.S. tax code when the tax-reform bill was proposed.

Revenue managers on overcoming rate struggles in NYC: During a meeting of the New York chapter of the Hospitality Sales and Marketing Association International, revenue managers from Marriott International, Denihan Hospitality Group and Beacon Hotel spoke about their strategies for growing rate in the face of supply increases in New York City, HNN contributor Harvey Chipkin reports. 

Carolyn Fredey, senior team leader, revenue management for Marriott in New York, said there should be a focus on the small things, such as growing rate, even if it’s a small amount, on Monday and Tuesday nights.

“Do the math a bit and you can see the profitability impact of that kind of weekday increase,” she said.

Panama hotel wants to remove Trump name: A story from the Associated Press shows another owner of a Trump hotel, the 70-story Trump Ocean Club International Hotel and Tower in Panama City, wishes to shed the Trump name and management company from the building, Reuters reports.

Other hotels, such as the Trump SoHo in New York City and the Trump Tower Toronto have stripped the Trump name, according to Bloomberg.

In a statement on Monday, the Trump organization said the Panama hotel has to legally keep the Trump brand name.

“Not only do we have a valid, binding and enforceable long-term management agreement, but any suggestion that the hotel is not performing up to expectations is belied by the actual facts,” the statement said.

Seventh Circuit rules OTAs don’t pay full tax on rooms: A group of 13 Illinois municipalities lost an appeal to force online travel agencies to “remit taxes on the full price paid by a customer for a hotel room,” Courthouse News reports.

The Illinois cities sued major OTAs “over their alleged practice of shorting the municipalities on hotel taxes,” the news organization reports.

U.S. District Judge Sara Darrow ruled that the “OTAs are not managers of hotels—they do not supervise the affairs of hotels,” Courthouse News reports.

Compiled by Danielle Hess.

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