From the desks of the Hotel News Now editorial staff:
- STR forecast revised down
- Fed chairman projects prolonged recovery
- Hoteliers must get reopening right
- Accor secures €560 million credit line
- A look at maintaining a 1,400-room closed hotel
STR forecast revised down: STR, parent company of HNN, and Tourism Economics have lowered their projections for hotel performance in both 2020 and 2021. Full-year 2020 revenue per available room is projected to decline 57.5% year over year, down from a previously projected 50.6% drop. Occupancy is now expected to fall 45.8% for full-year 2020, and average daily rate is projected to have a 21.6% drop.
RevPAR is now projected to increase 48% in 2021, down from earlier projections of a 63.1% increase. Despite the double-digit increase, absolute values will still be down significantly ($36.84 in 2020 and $54.53 in 2021) compared to 2019 ($86.66).
Fed chairman projects prolonged recovery: The economy’s climb back could stretch through the end of 2021, according to Federal Reserve Chairman Jerome Powell, The New York Times reports.
Speaking during CBS’ “60 Minutes,” Powell noted both his institution and Congress will need to provide some aid to jumpstart the recovery.
“This economy will recover; it may take a while,” Powell said. “It could stretch through the end of next year, we really don't know.”
He said a recovery will depend on consumer confidence, which in turn could rely on the development of a coronavirus (COVID-19) vaccine.
The Wall Street Journal reports cases of COVID-19 are approaching 1.5 million in the U.S. as many states are relaxing restrictions.
Hoteliers must get reopening right: As hoteliers consider reopening their properties, experts speaking at the New England Lodging Conference noted the importance (and difficulty) of getting that process just right, reports HNN’s Editorial Director Stephanie Ricca.
Panelists warned that reopening too soon could risk the long-term health of hotels and their workforce.
“If you rehire all your employees and the demand isn’t there, you may have to lay them off again,” said Matt Arrants, EVP at Pinnacle Advisory Group.
Accor secures €560 million credit line: Accor has signed an agreement with a consortium of five banks to secure a new €560 million ($607.2 million) revolving credit facility that together with cash reserves and other credit lines reinforces its liquidity position to more than €4 billion ($4.3 billion), according to a news release.
The French hotel firm said its total capital funds could cover operations for 40 months under current market conditions and includes a €1.2 billion ($1.3 billion) undrawn, revolving credit facility signed in July 2018.
A look at maintaining a 1,400-room closed hotel: Part of Daniel Ordoñez’s job as head of maintenance for the W Hotel in Barcelona, Spain, is walking the property and turning on the water in each guestroom to prevent a Legionnaires’ disease outbreak when the massive property eventually reopens. The New York Times looked at the property, which closed in mid-March, and the effort required to keep it ready for when travel resumes.
Ordoñez is in his eighth week of living on the hotel’s 24th floor alone. He originally expected it to be a two-week stay.
“It’s been a bit weird to watch my few socks spin inside the washing machine of a huge laundry room, but I’ve now also had time to get used to that,” he told the Times.
Compiled by Sean McCracken.