From the desks of the Hotel News Now editorial staff:
- Hong Kong protests disrupt travel
- GSA announces updated per diem rates
- A look at the varied performance issues in mainland China
- HPT and RLJ moving away from Wyndham
- Hotel stocks flat line in July
Hong Kong protests disrupt travel: Thousands of protestors poured into Hong Kong’s airport for a sit-in starting Friday and led to the cancellation of more than 130 flights today, The Wall Street Journal reports.
The newspaper describes the airport as one of the busiest in the world, handling more than 400,000 flights and 75 million passengers in 2018.
“The protest, while disruptive, was peaceful—a contrast to battles Sunday night across the city in which police stations were besieged, dozens of protesters were arrested following charges by police wielding batons and one woman sustained a serious eye injury after she was shot with a projectile,” The Journal reports.
GSA announces updated per diem rates: The U.S. General Services Administration has announced a $2 increase to lodging per diem rates for 2020, with the standard rate up to $96 from $94, according to a news release. GSA officials noted there was no change in methodology in calculating the new rates and described the increase as an “average adjustment.”
The per diem rates set the “amounts that can be reimbursed to federal employees for lodging and meals while on official travel.” The rate is adjusted based on the location of travel. The standard meal and incidental expenses rate remained flat at $55. The 2020 per diem rates will take effect 1 October 2019.
A look at the varied performance issues in mainland China: After years of massive demand and broad economic growth, the Chinese hotel industry is adjusting to healthy but more moderate growth rates, writes STR SVP of Lodging Insights Jan Freitag. STR is Hotel News Now’s parent company.
In an analysis of mainland Chinese hotel performance, Freitag notes supply growth is now outpacing demand growth, which has still increased more than 3% so far in 2019.
“It will be imperative for developers to watch the general economic trends to make sure their new products meet customer demand,” he wrote.
HPT and RLJ moving away from Wyndham: Hospitality Properties Trust became the second hotel-focused real estate investment trust in two days to announce plans to move away from a portfolio of Wyndham Hotels & Resorts-branded hotels Friday, HNN news editor Sean McCracken writes. RLJ Lodging Trust announced a similar plan Thursday.
HPT currently has 22 properties in its brand-managed Wyndham portfolio. President and CEO John Murray said those hotels will all either be sold or converted to new brands.
“As we tried to negotiate an alternative portfolio, we couldn’t find a way to slice and dice it in a way to be a positive portfolio going forward without obvious challenges,” he said. “Both sides agreed we’re better off trying to find a better way to bring the relationship to a conclusion.”
The company is also in the early stages of evaluating a portfolio of up to 30 Marriott International-branded hotels for possible sale.
“Second-quarter earnings reports were the big driver of stock prices during the month; high investor expectations for the hotel brands and disappointing second-half outlooks from the hotel REITs caused hotel stocks to underperform in July,” Michael Bellisario, senior hotel research analyst and VP at Baird, said.
Compiled by Sean McCracken.