5 things to know: 11 February 2019
5 things to know: 11 February 2019
11 FEBRUARY 2019 10:20 AM

From the desks of the Hotel News Now editorial staff:

  • Analysts expect to hear of shutdown impact on Q4 calls
  • Global stocks slowly on the rise
  • Hotel chains raising rates in India
  • Hotel Stock Index up 7.8% in January
  • Warriors want to build hotel near new arena

Analysts expect to hear of shutdown impact on Q4 calls: Fourth-quarter/full-year earnings calls will start this week for public hotel companies, and analysts want to know what impact the partial U.S. government shutdown had on business for real estate investment trusts and the C-corps, Hotel News Now’s Danielle Hess writes.

Rich Hightower, managing director of real estate investment trusts and lodging research at Evercore ISI, said the C-corps might lower their full-year 2019 guidance to account for the shutdown.

Another thing that’s top of mind for analysts is listening in on Marriott International’s call to see what company officials have to say about the data breach of the legacy Starwood Hotels & Resorts Worldwide reservation system that was announced at the end of last year, the company’s combined loyalty program, Marriott Bonvoy, and the government shutdown.

Global stocks slowly on the rise: Global stock markets started out the week with positive news on Monday, “as investors eyed the resumption of trade talks between the United States and China and watched for signs of progress on Brexit,” Reuters reports.

The pan-European STOXX 600 index was up 0.65%, bouncing back from one-week lows.

The U.S. dollar “reached its highest in six weeks against a basket of currencies, rising for an eighth consecutive day as investors piled into the world’s most liquid currency,” Reuters reports.

Hotel chains raising rates in India: Hotel chains across India are raising average room rates because of “improved occupancies in the market and favorable demand supply equations,” the Economic Times reports.

Room rates could increase 8% to 10% this year at hotel chains such as AccorHotels, ITC Hotels and Sarovar. Hotels in India are close to hitting 70% average occupancy, “and the nationwide average occupancy rate of 66% in 2017-2018 was the highest the industry has witnessed in almost a decade as per various industry estimates,” the news outlet reports.

Mandeep Lamba, president, South Asia, at HVS Anarock, told Economic Times that the operating performance for the hotel industry in India “has been largely encouraging and has maintained a slow but upward trajectory over the past two years.

“We feel that 2019 could see a significant growth in rates across most key cities, and we expect double digit growth, which will put the performance on a firm upside as demand outstrips supply by a large measure,” he said.

Hotel Stock Index up 7.8% in January: The Baird/STR Hotel Stock Index saw a 7.8% increase in January, finishing the month at a level of 4,388, according to a news release.

“Hotel stocks snapped back with the broader stock market in January after a challenging fourth quarter last year,” said Michael Bellisario, senior hotel research analyst and VP at Baird. “The hotel REITs and the hotel brands jumped 12.4% and 5.5%, respectively, in January, but both sub-indices are still well off their recent highs. Stocks ended last year in an oversold position with investor sentiment too negative, in our opinion, and all eyes are now focused on 2019 guidance and how all of the recent capital markets volatility and the government shutdown are impacting hotel demand.”

The increase in the stock index lagged behind the S&P 500 (+7.9%) and the MSCI US REIT Index (+11.6%).

Warriors want to build hotel near new arena: The Golden State Warriors want to build a hotel in San Francisco’s Mission Bay where the team’s Chase Center Basketball arena is under construction, The San Francisco Chronicle reports.

The team plans to propose a 142-room hotel that would fall under the 1 Hotel brand, which is operated by SH Hotels & Resorts, an affiliate of Starwood Capital Group. There are also plans for condos to be built with the hotel as part of The Chase Center project, which includes the 18,000-seat arena, 100,000 square feet of retail and restaurant space and office space for Uber. The space is slated to open in the fall.

The hotel project will need approval from the city’s Office of Community Investment and Infrastructure, which oversees new Mission Bay projects, among other city approvals, the news outlet reports. Construction of the hotel would start in 2021, and the hotel would open in 2023 if the plan is approved.

Compiled by Danielle Hess.

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