From the desks of the Hotel News Now Editorial Staff:
- Analysts say there could be fewer hotel REITs this year
- Hotel owners still in survival mode in 2021
- Stocks open in 2021 at record highs and then ‘wobble’
- Remote Colorado resort surviving pandemic
- MGM makes $11 billion offer for British gaming company
Analysts say there could be fewer hotel REITs this year: While public-to-public transactions aren’t likely in the new year, industry analysts said public-to-private hotel real estate investment trust deals are possible, resulting in fewer REITs, HNN’s Danielle Hess writes.
Michael Bellisario, director of equity research and senior analyst at Baird, said larger REIT deals could happen if companies can eliminate administrative expenses and prove synergies, but that could be hard to do in the current environment.
“Maybe there’s one fewer REIT or two fewer REITs and that’s because one of the bigger companies acquires a smaller company, because in today’s environment where liquidity is at a premium and valuations are a little bit more out of whack, there could be an opportunity there to take advantage,” he said. “But I’ll believe it when I see it. Maybe there’s a deal here, a small deal there, but a Host buying Sunstone or a Host buying Park, the math doesn’t pencil.”
Hotel owners still in survival mode in 2021: Last year ended with a glimmer of hope for the hotel industry as some expect the availability of COVID-19 vaccines to get the traveling public moving again, but the celebration could be short-lived, the Wall Street Journal reports.
Greig Taylor, managing director at consulting firm AlixPartners LLP, told the news outlet hoteliers are worried about survival.
The steady rise in virus cases continues to hold back hotel bookings.
“In a November report, S&P Global Ratings estimated that revenue per available hotel room fell by 50% in the U.S. in 2020,” the article states. “The ratings agency expects revenue to pick up in 2021, but estimates that it will still be 20% to 30% lower than in 2019. It doesn’t expect revenues to fully recover before 2023.”
Stocks open in 2021 at record highs and then ‘wobble’: Major U.S. indexes opened high on Monday, but they “wobbled” shortly after, The Wall Street Journal reports.
“The Dow Jones Industrial Average dropped 290 points, or 1%,” the article states. “The S&P 500 was down 0.6%, and the Nasdaq Composite fell 0.2%.”
Though the U.S. hospitalization rate reached a record high over the weekend as the coronavirus pandemic continues to spread across the country, investors are starting the year with some optimism.
“There is still really bad news on the virus, but the market is looking through that because of the vaccines,” Fahad Kamal, chief investment officer at Kleinwort Hambros, told the newspaper. “We are certainly positively tilted, given the expected economic recovery, historically low interest rates, a lot of fiscal spending and monetary policy to come: all of that positivity remains.”
Remote Colorado resort surviving pandemic: The 33-room Chipeta Solar Springs Resort in Ridgway, Colorado, has survived the pandemic by serving as an outdoor getaway for those who need to get out of the house, CoStar News’ Richard Lawson writes. (CoStar Group is the parent company of STR, and HNN is a division of STR.)
Patsy Young, who owns the hotel, said the property closed like many others at the beginning of the pandemic but saw business return slowly when the hotel reopened in May.
As 2020 ended, Young said the hotel’s numbers were “up over last year overall.”
MGM makes $11 billion offer for British gaming company: MGM Resorts International made an offer of $11.06 billion to buy British gaming company Entain PLC, which owns gambling brand Ladbrokes, The Wall Street Journal reports.
Entain said the offer undervalues the company.
“A combination could create one of the few large gaming companies in the world with a significant online and bricks-and-mortar presence. It would follow other recent consolidation in the industry,” the news outlet writes.
Compiled by Danielle Hess.