5 things to know: 7 June 2019
5 things to know: 7 June 2019
07 JUNE 2019 9:35 AM

From the desks of the Hotel News Now editorial staff:

  • British PM steps down as party leader
  • Playa leverages Hyatt, Hilton deals to grow all-inclusive
  • Weekly performance results for US, Canadian hotels
  • Major global bankers ponder interest rate cuts
  • Brexit already costing £97m in consultancy fees

British PM steps down: U.K. Prime Minister Theresa May has officially stepped down from her post as leader of the Conservative Party, but she will continue to serve as prime minister until her party chooses her successor, the BBC reports. May took over from former PM David Cameron but failed to get her agreement with the European Union on the U.K. leaving the EU agreed by the U.K. Parliament.

The political landscape in the U.K. became a little more complicated yesterday with the main opposition Labour Party winning a by-election in Peterborough, with commentators, including the BBC, suggesting the new Brexit Party, which did very well in the recent EU elections, split the conservative vote. The Labour win might even disappoint Labour supporters who want to put pressure on leader Jeremy Corbyn to move closer to pursuing a second referendum on Brexit.

Playa leverages Hyatt, Hilton deals to grow all-inclusive: Playa Hotels & Resorts executives said they see being included in the most prominent U.S. hotel brands’ distribution platforms, such as Hyatt Hotels Corporation and Hilton, and the growing appeal of the all-inclusive segment as a powerful recipe for success, writes Hotel News Now’s Sean McCracken.

Playa EVP and Chief Development Officer Fernando Mulet said while there’s possibility of adding more brands to their portfolio, the immediate focus is on growing Hyatt and Hilton partnerships.

“We need to, at this time, strengthen (the relationship) and help these two brands to grow (in the all-inclusive space),” Mulet said. “We have a lot of growth potential to add Hiltons and Hyatts, both in new destinations and in (existing) destinations.”

Weekly performance results for U.S., Canadian hotels: Hotels in the U.S. reported positive year-over-year results in the three key performance metrics for the week ending 1 June, according to data from STR, parent company of Hotel News Now. Occupancy increased 0.6% to 64.5%, average daily rate increased 1% to $124.16 and revenue per available room increased 1.6% to $80.10.

Hotels in Canada reported mixed year-over-year results for the same week. Occupancy decreased 1% to 72.2%, but ADR increased 1.5% to 170.87 Canadian dollars ($128.69) and revenue per available room increased 0.5% to CA$123.45 ($92.97).

Major global bankers ponder interest rate cuts: Both the U.S. Federal Reserve and the European Central Bank made hints that interest rates might be cut, according to The Wall Street Journal. The newspaper said that the Federal Reserve is contemplating whether “darker economic outlook and heightened trade tensions” due to the threatened imposition of tariffs will result in interest rates being cut “if not at (the Federal Reserve’s) meeting on 18-19 June, then in July or later.”

The news outlet also report that the ECB, prompted by noise from the Federal Reserve, also hinted rates might be decreased. This “marks a big shift, because the ECB had previously been moving to phase out its extraordinary policy tools, including negative interest rates, and had been steering investors to expect a future interest-rate hike,” The WSJ reports.

Brexit already costing £97m in consultancy fees: The official U.K. National Audit Office has said the U.K. government has by the end of April 2019 spent at least £97 million ($123.7 million) on “the use of consultants by government departments to support preparations for EU exit.”

Information the NAO gained from the government’s Cabinet Office shows £65 million ($83 million) to have been spent or agreed to be spent on consultancy services between April 2018 and April 2019, while information gathered from a sample of four (government) departments and by the Crown Commercial Service found an additional £32 million ($40.8 million) in EU Exit consultancy expenditure. The NAO added “Preparing for the U.K.’s exit from the EU has been a significant challenge for departments and has required skills such as project delivery and commercial skills that are in short supply.”

Compiled by Terence Baker.

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