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5 things to know: 2 January 2013
January 2 2013

• US fiscal cliff averted
• Home Inns appoints new co-chairman
• World Bank’s hotel investments called into question
• Canada market sluggish despite strong economy
• Brand executives share 2013 projections

It came down to the wire, but U.S. politicians gave final approval late New Year’s Day to resolve the fiscal cliff drama that many feared would plunge the country back into recession. The crisis ended when dozens of Republicans in the House of Representatives buckled and in a 257 to 167 vote backed tax hikes approved by the Democrat-controlled Senate.

The vote averted immediate pain such as tax hikes for almost all U.S. households, but it did nothing to resolve other political showdowns on the budget that loom in coming months. Spending cuts of $109 billion in military and domestic programs were delayed for two months.

The approved plan maintains tax cuts for individuals earning less than $400,000 per year and couples earning less than $450,000. It will raise tax rates for those who make more, marking the first time in two decades that rates increased for the wealthiest Americans.

Home Inns & Hotels Management appointed Yi Liu as an independent director and co-chairman of the board of directors, replacing Yunxin Mei, effective 1 January. Mei will remain as a senior consultant to the company following his retirement.

Yi is the vice chairman and CEO of Beijing Tourism Group, whose main business includes hotel management, travel agency services, retail sales, catering services, auto services, sightseeing destinations and real estate development. Yi also serves as the chairman of Beijing Summer Palace Hotel Company Limited, which is the owner of a high-end boutique hotel, Aman at Summer Palace.

A Pro Publica report released today provides an interesting—if not critical—look at the World Bank’s millions of dollars worth of investment in the global hotel industry. The organization, which claims its mission is to “reduce global poverty,” has offered cheap loans to the likes of Prince Alwaleed bin Talal through its International Finance Corporation to fund luxury hotel projects with an end goal of profit.

“In case after case, the verdict was the same: The IFC likes to work with huge corporations, funding projects these companies could finance themselves. … Its projects include not only glitzy hotels and high-end shopping malls, but also gritty gold and copper mines and oil pipelines, some of which end up benefiting the very corrupt, authoritarian regimes that the rest of the World Bank is urging to change,” author Cheryl Strauss Einhorn wrote.

She points to a new 5-star Mövenpick hotel in Ghana as an example. Though the property has created several jobs for the local impoverished, “all the top staff members” of the property’s 300-some associates are skilled workers from outside host city Accra. Furthermore, the city has close to a dozen luxury properties. “The IFC didn’t study the local hotel scene before making this investment, unlike its standard practice,” Strauss Einhorn wrote.

An interesting dichotomy is occurring within Canada’s hotel industry: While the North American country boasts one of the most stable economies in the world, its hotel industry remains relatively soft, writes’s Jason Q. Freed.

“It’s kind of puzzling why Canada’s hospitality sector isn’t much stronger than it is,” said Glenn Squires, CEO of Pacrim Hospitality Services, which develops and manages dozens of hotels throughout the country.

Year to date through November, hotels in Canada reported an average occupancy of 59.7%, down 0.3% over that same timeframe last year; average daily rate was $126.22 Canadian dollars ($126.81), up 2.3% from last year; and revenue per available room was CA$75.35 ($75.70), up 2% over last year, according to STR, parent company of

With 2012 in the rearview window and 2013 sprawled out on the open road ahead, picked some of the smartest minds in the industry to discern what they viewed as the biggest challenges and opportunities facing the hotel sector in the next 12 months.

Today we tackle the brand perspective with insight from the top executives at G6 Hospitality, Wyndham Hotel Group, the Rezidor Hotel Group, Best Western International and Hilton Worldwide.

Among their top concerns were distribution, global expansion and brand commoditization. Increasing demand from international travelers as well as technological advances that allow guests to customize their stays ranked among the biggest opportunities.

Compiled by Patrick Mayock.

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