From the desks of the Hotel News Now editorial staff:
- CPH sells 20% stake in Crown Resorts to Melco
- Q1 RevPAR for Manhattan hotels lowest since 2011
- April performance better than expected for US hotels
- MGM lays off 557 in second round of cost-cutting
- Weekly performance for US, Canada hotels
CPH sells 20% stake in Crown Resorts to Melco: Australia’s Consolidated Press Holdings announced it has sold a 19.99% stake in hotel and casino firm Crown Resorts for 1.76 billion Australian dollars ($1.22 billion) to Hong Kong-based Melco Resorts & Entertainment, according to a news release. The deal that comes a few months after a proposed deal by Crown with Las Vegas-based Wynn Resorts broke down after details were leaked in the press.
Consolidated Press Holdings cited the need to diversify its investment portfolio as the reason for the sale. It now owns 26% of Crown Resorts at a value of approximately AUS$2.3 billion ($1.6 billion). Crown is due to open a casino-resort in Sydney in the first half of 2021.
Q1 RevPAR for Manhattan hotels lowest since 2011: According to PwC’s Q1 2019 Manhattan Lodging Index, average daily rate in the first quarter declined across all Manhattan hotel submarkets, which resulted in the lowest revenue per available room average in eight years.
The report cites “increases in lodging supply, which continued to outpace growth in demand, (resulting) in the largest year-over-year decline in occupancy since 2009.”
“Despite more positive expectations coming into the New Year, the quarter ended on a weak finish with March RevPAR down 11.1%,” the report states.
April performance better than expected for U.S. hotels: Hoteliers bracing for a bad April largely due to the Easter holiday shift to March were pleasantly surprised with better-than-expected performance, writes Jan Freitag, STR’s SVP of lodging insights. STR is the parent company of HNN.
RevPAR grew 1.2% in April, better than the 0.6% RevPAR growth in March, which bucks the usual Easter shift trend, Freitag writes. “This whole theory of the terrible Easter Shift impact that we told our kids as a scary bedtime story (or was that just me?) actually did not materialize,” he writes.
Demand growth for April (+2.3%) also slightly outpaced supply growth (+2%), which resulted in 0.3% occupancy growth to 68%, according to data from STR.
MGM lays off 557 in second round of cost-cutting: As part of “MGM 2020,” an initiative aimed at reducing costs to grow the company, MGM Resorts International has announced a second round of layoffs, affecting 557 employees, who are mostly in management positions, reports Las Vegas ABC affiliate KTNV.
The announcement comes after MGM rolled out its “MGM 2020” plan in January, and 254 employees were laid off in April.
MGM CEO Jim Murren said in a letter sent to employees that the changes “bring us closer to concluding the foundational work of MGM 2020 during which we streamlined our operational model and reduced our salaried staff by over 12%.”
Weekly performance for U.S., Canada hotels: Eighteen of the top 25 markets in the U.S. hotel industry posted an year-over-year increase in RevPAR growth for the week ending 25 May, according to data from STR. Overall, U.S. hotel RevPAR grew by 3.1% to $95.22 through gains in occupancy (up 0.9% to 71.2%) and ADR (up 2.1% to $133.81).
Canadian hotel industry performance was mixed for the same week, with occupancy falling 0.8% year over year to 66.4%, but ADR increased by 3.3% to 167.30 Canadian dollars ($123.67), resulting in RevPAR growth of 2.5% to CA$111.02 ($82.07).
Compiled by Robert McCune.