From the desks of the Hotel News Now editorial staff:
- Consumer spending slows in August
- Marriott sees broad potential in all-inclusives
- Portugal setting up Thomas Cook relief fund
- A look at the connection between rate and fracking
- Ashford sets up capital-raising platform
Consumer spending slows in August: The Wall Street Journal reports a larger-than-expected slowdown in consumer spending for August signals “a key pillar of the economy could be losing momentum as the global economy wobbles and trade tensions remain high.”
According to the U.S. Department of Commerce, household spending was up just 0.1% (seasonally adjusted) from July to August, down from 0.5% for the prior month. The newspaper notes the slowdown is a bad omen for third-quarter economic growth.
Marriott sees broad potential in all-inclusives: Marriott International is far from the only hotel brand betting on the all-inclusive resort segment, but many industry observers are eager to see what the giant hotel company will do following the company’s entrance into the space. HNN’s Robert McCune met with Laurent de Kousemaeker, Marriott’s chief development officer for the Caribbean and Latin America, who said the company spent more than a decade studying the segment before announcing the signing of five resorts in his region.
He said the all-inclusive product has improved greatly in recent history.
“Traditionally, the all-inclusive space has been seen as focused more on mass-market, midscale service, but over time, we’ve seen that sector improve in terms of quality,” de Kousemaeker said. “We also like the size it has today, with 430,000 rooms worldwide in the sector. That, for us, justifies investing in that space.”
Portugal setting up Thomas Cook relief fund: The Portuguese government has announced €150 million ($164 million) worth of credit for local companies impacted by the demise of Thomas Cook, Reuters reports. Individual companies will be eligible to borrow as much as €1.5 million ($1.6 million).
The government noted the Algarve region in southern Portugal and the island of Madeira are the portions of the country most impacted by Thomas Cook’s collapse, and will set aside more than €2 million ($2.9 million) specifically to help them.
A look at the connection between rate and fracking: Low room rates in oil and gas regions are obviously bad news for hoteliers there, but according to an analysis from Bloomberg, they’re also a harbinger of bad times for the fracking industry. An analysis using data from HNN’s parent company, STR, showed a steep decline in rates, stemming from a demand drop, in places such as Midland, Texas.
RevPAR in Midland and Odessa, Texas, dropped 32% year over year for August and is down 21% year to date. The analysis points to a demand drop tied to “a market so apparently saturated—with oil, talk of a trade war and sheer despondency”—that nothing seems capable of driving up oil prices at the moment.
Ashford sets up capital-raising platform: Ashford Inc. has announced the creation of a new capital raising arm called Ashford Securities LLC, which will be tasked with raising equity and debt for that company and its two managed real estate investment trusts, Ashford Hospitality Trust and Braemar Hotels & Resorts, according to a news release. The company will start raising capital in the first half of 2020.
“We believe having a dedicated fundraising platform will provide Ashford and its advised platforms an additional source of capital that is not dependent on the traditional publicly-traded capital markets,” said Jay Steigerwald, president and head of distribution for Ashford Securities. “We are excited to pursue a fresh source of capital that will help us prudently grow all our platforms over the long term for increased shareholder value.”
Compiled by Sean McCracken.