From the desks of the Hotel News Now editorial staff:
- PwC anticipates slight uptick in 2019 supply growth
- Hotel websites among those failing ADA compliance
- Europe investors bullish on hotel asset class
- San Diego hotel workers end 35-day strike, reach new contract
- Braemar agrees to buy Ritz-Carlton Lake Tahoe for $103.4m
PwC anticipates slight uptick in 2019 supply growth: According to “PwC’s Hospitality Directions: U.S. November 2018” lodging outlook, the third quarter came in below the expectations of many within the industry. Average daily rate growth of 2.1% year over year led the way while growth in revenue per available room came in at 1.7%. Supply growth for the month was at 1.9%, outpacing demand of 1.6%, and the 102-month streak of RevPAR growth was disrupted by a 0.3% decrease in the metric. But 2019 is right around the corner and overall growth in the industry is expected to remain despite a slower pace.
PwC anticipates a slight uptick in supply growth at 2.1% in 2019, while full-year 2018 is expected to be 2%. It predicts demand growth will slow down to 1.9% in 2019 while an increase in average daily rate paired with a slight dip in occupancy will result in RevPAR growth of 2.8%, the report states.
“As we head towards 2019, economic indicators appear to support continued industry growth, given high consumer spending supported by rising disposable income, employment and household net worth,” the report states. “Counter-balances to continue monitoring into the new year include: continued trade tensions, waning fiscal stimulus, increasing interest rates and growing inflation.”
Hotel websites among those failing ADA compliance: Thousands of businesses’ websites in the United States are increasingly being targeted by lawsuits over violating the Americans with Disabilities Act, according to the Los Angeles Times, and hotels are among those businesses. Within the first six months of 2018, nearly 5,000 ADA lawsuits have been filed in federal court for alleged website violations, and that number is expected to increase to almost 10,000 at the end of the year, law firm Seyfarth Shaw predicts.
The Avanti Hotel, a boutique property in Palm Springs, California, is defending itself against a lawsuit that claims the hotel’s website “can’t be used by people who have problems seeing or hearing,” the newspaper reports. Modifying the website would cost around $3,000 for the hotel, and Avanti GM Jim Rutledge said he’s willing to pay that; however, the lawsuit also asks the hotel to pay damages to the plaintiff.
“I would really like to fight it, but it just comes down to finances,” he told the newspaper, and he could be forced to pay up to $25,000 in damages and lawyer fees if he loses in court.
“In the meantime, several pages of the hotel’s website have been replaced with plain type because ‘no access is equal access for everyone, per the ADA requirements,’ the site notes,” the newspaper reports.
Europe investors bullish on hotel asset class: Though the current risk level of buying hotels could indicate a downturn is near, Europe hotel investors said those risks don’t outweigh the reward. And the current economic environment is ideal for better underwriting, analysis and monitoring consumer travel trends, writes Hotel News Now’s Terence Baker from Deloitte’s 30th European Hotel Investment Conference.
“Some risk is properly priced, but there is a general trend of taking more risk for the same return,” said Keith Evans, SVP of European hotel acquisitions for Starwood Capital. “Traditionally investors have looked for higher yields or new markets, but now you are looking at more liquidity risk when comes the downturn. When you start layering all that in, the capital expenditure and return differentials start looking not as attractive. You need better business plans and more efficient construction and operational models.”
San Diego hotel workers end 35-day strike, reach new contract: A group of housekeepers, banquet captains and other employees at the Westin San Diego Gaslamp hotel, represented by Unite Here Local 30, voted on Sunday to ratify a new contract, ending the 35-day strike, reports the San Diego Tribune. Details of the new contract have not yet been released, but they “represent ‘historic progress’ in the areas of working conditions, wages and benefits and job security.”
Unite Here also recently reached agreements with hotels in Detroit, Oakland and San Jose, but nearly 7,000 other workers in San Francisco, Boston, Maui and Oahu are still on strike, the newspaper reports. The strike in San Diego was part of “a nationwide job action involving 7,700 workers at hotels owned or managed by Marriott International across eight cities.”
Braemar agrees to buy Ritz-Carlton Lake Tahoe for $103.4m: Braemar Hotels & Resorts announced it has entered into a definitive agreement to purchase the 170-key Ritz-Carlton Lake Tahoe in Truckee, California, along with 3.4 acres of adjacent land, according to a news release. The considered total for the acquisition is $120 million: $103.4 million for the hotel, $8.4 million for the adjacent land and $8.2 million for capital reserves.
The deal is anticipated to close sometime between 12 December 2018 and 19 January 2019.
“This property fits perfectly with our strategy of owning luxury hotels and resorts and further diversifies our portfolio while also increasing the overall RevPAR of our portfolio, which is already the highest among our hotel REIT peers,” Richard Stockton, Braemar’s president and CEO, said in the release.
Compiled by Dana Miller.