5 things to know: 31 August 2018
5 things to know: 31 August 2018
31 AUGUST 2018 9:26 AM

From the desks of the Hotel News Now editorial staff:

  • Whitbread to sell coffee division to Coca-Cola
  • Judge orders end of hurricane-related hotel funds
  • Insights into Wyndham’s distribution strategy
  • US, Canada near NAFTA deal deadline
  • Airlines to hit travelers with higher fees

Whitbread to sell coffee division to Coca Cola: Whitbread PLC will soon have more time to focus on its hotel business after the company announced a £3.9 billion ($5.1 billion) deal with Coca-Cola to sell its Costa coffee division, writes Hotel News Now’s Terence Baker.

The deal, which came in at a 16.4-times multiple compared to Costa’s projected full-year 2018 earnings before interest, tax, depreciation and amortization, is expected to close in 12 to 24 months.

Officials with Whitbread, which owns the Premier Inn and Hub by Premier Inn brands and has hotels across Europe, said the deal will open up growth opportunities for those brands. CEO Alison Brittain called out Germany specifically as a target.

“Germany is a bigger market than U.K. and more fragmented, with not such a large budget share. Whitbread will focus on attractive structural growth on opportunities for Premier Inn in the U.K. and Germany,” she said.

Judge orders end of hurricane-related hotel funds: Only two weeks remain of continued housing aid for “more than a thousand” families from Puerto Rico that fled the territory for mainland U.S. after Hurricane Maria, Reuters reports. The families will no longer get federal funding to stay in hotels following a ruling by U.S. District Judge Timothy Hillman in Massachusetts.

Hillman rejected an advocacy groups’ contention that the Federal Emergency Management Agency should be required to “continue providing aid to evacuees until they obtained temporary or permanent housing,” according to the news agency.

Insights into Wyndham’s distribution strategy: Recent scale growth for Wyndham Hotels & Resorts, particularly the acquisition of the La Quinta Inns & Suites brand, will be positively impactful for the company’s overall distribution strategy, writes Hotel News Now’s Robert McCune.

In a one-on-one video interview with McCune at the recent Hotel Data Conference, SVP of Global Distribution Tammy Peter said officials at the company “really believe that scale matters.”

“The more scale we have, the better leverage we have with those (distribution) partners, so I think that’s really going to help us in the future,” she said.

U.S., Canada near NAFTA deal deadline: Canadian and U.S. officials are nearing the finish line for an updated North American Free Trade Agreement, with negotiations set to end Friday based on a timeline set by U.S. President Donald Trump, Reuters reports.

The news agency reports Canadian officials are not optimistic of hitting the deadline for the deal over reluctance from the U.S. to preserve an “independent trade dispute mechanism” in the revamped agreement.

In recent public comments reported by Bloomberg, Trump seems to believe that Canada has little option but to get a deal done, even if talks extend past the deadline.

“Canada’s going to make a deal at some point,” he told Bloomberg. “It may be by Friday or it may be within a period of time, but ultimately they have no choice.”

Airlines to hit travelers with higher fees: The battles for share of wallet among travelers appears to be heating up, with several airlines raising fees for things such as bags and flight changes, according to the Wall Street Journal. The newspaper reports JetBlue Airways has lead the way in fee increases, pushing up the price of checked bags to $30 for a first bag and $40 for a second bag.

The higher fees seem to be connected to increasing fuel costs, according to The Journal.

“Changing our bag fees will offset higher costs in today’s challenging and competitive market,” WestJet spokeswoman Lauren Stewart told the newspaper. “By raising fees for optional services, such as checked bags, we can continue to maintain the lower fares our guests expect.”

Compiled by Sean McCracken.

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