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5 things to know: 9 March 2012
March 9 2012
Highlights

•    China’s domestic economy chains report Q4 earnings
•    LaSalle acquires Hotel Palomar in Washington for $143.8m
•    STR preliminary February results show RevPAR gains
•    Retargeting ads yield big returns for hotels
•    WSJ: US jobs grew by 227,000 in February

Despite slight decreases in performance metrics in the fourth quarter of 2011, 7 Days Group Holdings Limited, China Lodging Group and Home Inns & Hotels Management reported in quarterly earnings calls they will continue their aggressive plans for growth in 2012.

7 Days Group Holdings Limited
During the fourth quarter, the company reported 82.8% occupancy, down from 83.9% in the fourth quarter of 2010. Average daily rate decreased 1.7% to 159.6 renminbi ($25.29) and revenue per available room decreased by 3% to 132.2 renminbi ($20.95).

7 Days is targeting 360 new hotels this year, which include 120 leased-and-operated properties and 240 managed properties.

China Lodging Group
RevPAR at China Lodging hotels was reported at 167 renminbi ($26.43) in the fourth quarter of 2011, down from 168 renminbi ($26.60) in the fourth quarter of 2010. Full-year 2011 RevPAR was reported at 165 renminbi ($26.12), compared to 183 renminbi ($28.97) in 2010. The decreases, executives said, are attributable to “the absence of one-time favorable impact from the Shanghai Expo.”

Moving forward, China Lodging Group plans to open approximately 120 leased-and-operated hotels in 2012, while the remaining 158 or so will be franchised and managed.

Home Inns & Hotels Management
Overall during the fourth quarter, Motel 168 had occupancy of 73.5%; RevPAR of 113 renminbi ($17.91); and ADR of 154 renminbi ($24.41). Excluding Motel 168, Home Inns saw occupancy during the quarter of 88.4%; RevPAR of 173 renminbi ($27.42); and ADR of 153 renminbi ($24.25).

Motel 168, with 307 hotels open, has 198 hotels in its pipeline. Excluding Motel 168, Home Inns has 1,119 hotels in operation. This year, Home Inns intends to open between 330 hotels and 360 hotels.


LaSalle Hotel Properties on Friday announced the acquisition of Hotel Palomar in Washington, D.C., for $143.8 million in an off-market transaction.

The purchase of the 335-room hotel was funded with the $46.6 million in proceeds from the ATM program and borrowings from the company’s senior unsecured credit facility.

LaSalle revised its 2012 outlook to include the acquisition of the Hotel Palomar. Its revised adjusted EBITDA expectation is from $259.6 million to $272.6 million, up from its previous expectation of $250 million to $263 million.

STR, parent company of HotelNewsNow.com, released its preliminary February performance results for the U.S. hotel industry. Overall, the industry posted an occupancy gain of between 2% and 4%. Revenue per available room was up between 6% and 8%.

The luxury, upscale and upper-midscale segments recorded the largest increases among the chain-scale segments. Each segment posted increases between 3% and 5% in occupancy and increases in RevPAR between 7% and 9%.

While there have been a number of recent big-splash hotel marketing and distribution advancements—and companies such as Google and Facebook have added new layers to the space—it is a behind-the-scenes advertising practice that sources say is making the largest impact, reports HotelNewsNow.com’s Jason Q. Freed.

Hotel brands and individual properties are successfully embracing “retargeting” campaigns, and one brand said the returns on investment are regularly between 5-1 and 10-1.

Privacy laws, however, are calling the practice into question.

The U.S. Labor Department reported Friday U.S. jobs outside of agriculture grew by 227,000 in February. Meanwhile, employers added 284,000 jobs in January, roughly 40,000 higher than an initial estimate, and job creation also was revised higher for December.

The economy has defied economists’ expectations of slower job growth to start 2012, according to The Wall Street Journal. Economists surveyed by Dow Jones Newswires had forecast a gain of 213,000 in payrolls and for the jobless rate to remain at 8.3% for February. 

While the unemployment rate, obtained by a survey of U.S. households, did remain at 8.3% as both hiring and the number of job seekers increased, the economy added an average 245,000 jobs over the past three months, more than double the pace of job creation between May and November.

Compiled by Stephanie Wharton.

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