5 things to know: 6 August 2018
 
5 things to know: 6 August 2018
06 AUGUST 2018 9:15 AM

From the desks of the Hotel News Now editorial staff:

  • Owners cite sales pinch from Marriott-Starwood integration
  • LaSalle urges shareholders to approve Blackstone deal
  • Tourists flee quake in Indonesia, wildfires in Portugal
  • Strategies for overcoming revenue obstacles across chain scales
  • Hotel Stock Index up slightly in July

Owners cite sales pinch from Marriott-Starwood integration: Owners of some Starwood Hotels & Resorts Worldwide legacy properties are citing disruption to sales team efforts, tied to the Marriott International integration, according to executives at real estate investment trusts Pebblebrook Hotel Trust and Diamondrock Hospitality Company, the Washington Business Journal reports.

During second-quarter earnings calls with analysts, the REIT executives pointed to revenue declines at properties in Boston, Beverly Hills, Los Angeles and San Diego, California.

“When Marriott reorganized the group sales team, there were major integration issues that forced legacy Starwood sales teams to freeze their efforts,” Diamondrock EVP and CFO Jay Johnson said, adding that the company “expects the challenge to continue in the third quarter and potentially,” and to still feel some effects into next year, the Business Journal reports.

Pebblebrook President and CEO Jon Bortz expressed that the negative effects of the reorganization have been more prolonged than hoped for, the Business Journal reports.

“While we’re hopeful that the reorganization will lead to better performance, we’re very disappointed that there has been a large impact for such an extended period already this year,” he said on the call.

Still, after an overall strong quarter, confidence at Pebblebrook is high, despite setbacks in its ongoing bid to acquire LaSalle Hotel Properties, reports Hotel News Now’s Sean McCracken.


LaSalle urges shareholders to approve Blackstone deal: In an investor presentation filed with the U.S. Securities Exchange Commission today, the LaSalle Hotel Properties board of directors “unanimously recommends that LaSalle shareholders … approve the merger” proposed by Blackstone prior to a special meeting set for 6 September, according to a news release.

“The presentation highlights that the Blackstone transaction maximizes both value and certainty for LaSalle shareholders” and “sets the record straight” regarding its rejection of proposals by Pebblebrook Hotel Trust to acquire the company, the release states.


Tourists flee quake in Indonesia, wildfires in Portugal: A second powerful earthquake in a week on Indonesia’s resort island of Lombok killed at least 98 people and sent tourists fleeing; meanwhile, wildfires in Portugal’s southern Algarve tourist region are forcing the evacuation of homes and hotels, Reuters reports.

Footage published on social media and shared by the Express newspaper shows panicked tourists fleeing the Puncak hotel during the 7.0-magnitued earthquake on Lombok, which also injured at least 236 people, Reuters reports.

No deaths have been reported in the Portugal wildfires, though several people have been treated for burns and smoke inhalation, Reuters reports.

Antonio Monteiro, GM of the Caldas de Monchique Spa Resort, told the news agency: “We had to evacuate all hotel guests and we don’t have any information about when we will reopen.”


Strategies for overcoming revenue obstacles across chain scales: Rate pressures and booking cancellations plague hotel revenue managers at every chain scale, from luxury to economy, but strategies for coping with those challenges vary, reports Hotel News Now’s Danielle Hess.

At Dream Hotel Group, which operates hotels in the upper upscale segment, “Our biggest challenge is controlling the rising costs of customer acquisition,” said Kathryn Barrett, VP of revenue management.

“Traditionally hoteliers have focused on RevPAR increases through occupancy and (average daily rate); however, rising costs of acquisition are eating into hotel profits,” she said. “We recently rolled out new (customer relationship management) software across our portfolio and are leveraging this technology to strategically deploy marketing initiatives that drive direct business.”

Meanwhile, “the biggest revenue-management challenge in the economy segment is delivering a cost-effective, time-efficient, market-relevant pricing, yielding and channel optimization solution,” said Calvin Anderson, SVP, chief of revenue optimization at RLH Corporation.

“The economy hotelier is resource-constrained with endless operational needs clamoring for their attention, which often leaves the fundamentals of revenue management deprioritized. At (RLHC), we see this challenge as our biggest opportunity and anticipate delivering an industry-first solution this fall.”


Hotel Stock Index up slightly in July: Though down 0.3% year to date, the Baird/STR Hotel Stock Index was up slightly in July (+0.2% to 4,874), according to a news release.

“Both the hotel brands and hotel REITs underperformed their benchmarks again in July, but the sub-indices were up slightly in absolute terms during the month,” Michael Bellisario, senior hotel research analyst and VP at Baird, said in the release.

“Market activity was more aligned with performance results in the sector,” said Amanda Hite, president and CEO of STR, parent company of HNN. “With Q2 earnings calls underway, it is clear that the hotel industry, after taking a ‘breather’ in 2016 and 2017, is now reaccelerating its pace of growth. Reaching 100 consecutive months of RevPAR growth in June was just another outward sign of strong fundamentals.”


Compiled by Robert McCune.

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