5 things to know: 6 February 2018
5 things to know: 6 February 2018
06 FEBRUARY 2018 10:40 AM

From the desks of the Hotel News Now editorial staff:

  • Stock plunge sends waves through markets
  • Barings announces $650m sale of seven hotels
  • Middle East hotels redefine luxury to suit guests
  • Arrest of government leaders in Maldives stirs crisis
  • Baird/STR Hotel Stock Index rose 6.4% in January

Stock plunge sends waves through markets: The Dow Jones Industrial Average dropped by almost 1,600 points at one point on Monday, which ultimately erased any gains for the year, reports The Wall Street Journal.

This “biggest-ever daily point plunge” caused steep selloffs in equity benchmarks spanning from Tokyo to Madrid, The Journal reports.

“It’s one of those things that everyone’s been waiting for, for a long time,” Russ Mould, an AJ Bell investment director, told the newspaper. “You’ve had U.S. stocks at record highs showing historic low volatility, interest rates going up and signs of (central bank stimulus) ending.”

Expectations for how quickly the Federal Reserve will raise U.S. interest rates this year also likely played a part in the drop. The Journal reports Fed-fund futures show only a 69% chance of a rate increase in March, compared to a 76% chance on Friday.

Barings announces $650m sale of seven hotels: Asset management firm Barings announced it closed a $650-million sale of seven “upper-upscale business class hotels” in the U.S. to an investment management company in Hong Kong, according to a news release.

Barings will act as asset manager for the portfolio, which comprises properties in Chicago, Boston, Washington, Seattle and Phoenix metropolitan areas, the release states.

“This transaction reflects the value Barings is able to provide to clients through our depth, global reach and our ability to source and manage real estate investment opportunities and serve clients’ capital needs worldwide,” Scott Brown, global head of real estate at Barings, said in the release.

Middle East hotels redefine luxury to suit guests: Armed with more knowledge today about what guests want, luxury hotels in the maturing market of the Middle East are veering from breathtaking experiences to more convenient, subtle and experiential moments, reports Terence Baker, HNN’s Senior Reporter, Europe.

Speakers on a panel at the Gulf & Indian Ocean Hotel Investors’ Summit said the shift is in response to what they’re seeing in the market.

“There is a growing desire for custom-tailored products and services, and new sub-segments are developing, including groups of women, and this differentiated product will bring higher returns to owners,” said Omar Romero, VP of development at Six Senses Hotels Resorts Spas.

Arrest of government leaders in Maldives stirs crisis: The Maldives—a tourist hot spot with a heavy focus on resort, food and beverage and leisure spend—is facing more political turmoil after two Supreme Court judges and a former president were arrested in connection with a corruption investigation, The Wall Street Journal reports.

News of the arrests sparked “calls for the international community to step in” to alleviate the turmoil, the newspaper reports. The arrest of the three men came after Maldives President Abdulla Yameen Abdul Gayoom declared a state of emergency on Monday, which gave authorities more power.

“The U.S. said Monday that it was troubled and disappointed by the developments in the Maldives and called on the government to respect the Supreme Court’s verdict,” The Journal’s article states.

Baird/STR Hotel Stock Index jumps in January: The Baird/STR Hotel Stock index closed January at 5,200, which is a 6.4% increase from the end of 2017, according to HNN’s parent company STR.

It marked the fifth straight month that hotel stocks have outperformed the S&P 500 (+5.6%) and the MSCI REIT (RMZ) (-4.3%), said Michael Bellisario, senior hotel research analyst and VP at Baird.

“The hotel REITs were the bigger relative winners as interest rates moved higher throughout the month and investors rotated into shorter lease duration real estate sectors,” he said.

Compiled by Dana Miller.

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