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5 things to know: 15 January 2013
January 15 2013

• Host still pursuing other defendants in fraud case
• TravelClick: Group demand on the rise
• Mixed year ahead for UK hotels
• STR, STR Global release 2012 year-end global pipeline data
• Location reigns as primary factor for hotel choice

While reported yesterday that Host Hotels & Resorts and Molinaro Koger settled their portion of a 2011 lawsuit, Host on Tuesday issued a statement saying the proceedings against at least two other defendants—Scioto Partners and Dearborn Hotel—continue to move forward.

“Host determined that (Rob) Koger and his former company, Molinaro Koger, had one remaining asset—their insurance policy, so we settled our litigation against Koger, his company and their insurance company for their policy limits,” said Kevin Gallagher, assistant general counsel for Host Hotels, in a statement to

“Our settlement did not discharge the other defendants in the case: Berkeley (Investments), B2B3 (Puppet), Scioto (Partners) and Dearborn (Hotel),” the statement continued. “We fully intend to continue to pursue those entities and third parties to collect the full amount of our loss—$22.8 million.”

The initial lawsuit, filed by Host on 3 June 2011, accused a number of defendants, including Koger and his firm, of misrepresenting sales it handled for Host. Host alleges that Molinaro Koger set up companies led by internal employees to buy three hotels from Host and resell them for a profit. In one case, the initial buyer of one Host hotel was actually dead, the lawsuit states.

Both Scioto Partners and Dearborn Hotel were buyers of former Host properties in which Molinaro Koger brokered the transactions. Host in the lawsuit claims principals of both companies were actually employees of Molinaro Koger at the time.

Group occupancy is on the rise again after a demand dip during the past several months, according to data from the December 2012 TravelClick North American Hospitality Review. From the fourth quarter of 2012 through the third quarter of 2013, group demand bounced back from being down 0.1% last month to up 2.2% year over year.

Committed occupancy across all segments, for December 2012 through November 2013, is up 3.9% compared with a year ago.  Average daily rate is up 4.6%, compared with the same time period last year and revenue per available room is up 12.8%.

The transient segment, individual business and leisure travelers, is pushing the rise in occupancy and ADR, however, despite the improvement of the group segment. Committed occupancy for this segment is up 8.9% and ADR is up 5.5%.

The U.K. hotel industry has a challenging year ahead, according to HVS. While London will again experience strong demand, its hotels are unlikely to reach the premium rates they did during the Summer Olympics and Paralympics.

Still, 2013 could see an improvement for hotel transactions as buyer interest remains strong and some debt becomes available, said Russell Kett, chairman of HVS London.

“Outside London is another matter, apart from a handful of locations such as Edinburgh, many U.K. provincial hotels will struggle through 2013 in need of both customers and investment. Several owners, whether individuals or banks, will seek to sell their distressed businesses, but buyers will find it hard to secure meaningful levels of debt, which may cause price reductions in some cases,” Kett said in a news release.

STR and STR Global, respectively the parent and sister companies of, released global pipeline data for 2012:

The Asia/Pacific hotel industry opened 458 new hotels with 82,476 rooms in 2012.

The Caribbean/Mexico region added 19 new hotels comprising 2,670 rooms in 2012.

The Central/South America region added 47 new hotels with 6,121 rooms in 2012.

The Europe hotel industry opened 332 new hotels with 41,982 rooms in 2012.

The Middle East/Africa hotel industry opened 68 new hotels with 15,735 rooms in 2012.

A study based on the results of the Market Metrix Hospitality Index found location still reigns as the primary factor that determines hotel choice for travelers around the globe. The results include data from 40,000 American, European and Asian travelers during 2012.

Additional findings from the report include:

  • Location generally matters more to leisure guests.
  • Location also tends to be more important to older travelers (more than 50 years old), with a high income ($100,001 to $150,000), who prefer staying in an upper-midscale or upscale hotel.
  • “Price” and “past experience” are the two next most important factors in hotel selection. 

Read the report in its entirety here.

Compiled by Stephanie Wharton.

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