U.S. hoteliers aren’t happy at all with the widespread decreases seen in government per diem rates.
The U.S. General Services Administration revealed this week government per diem rates in most areas nationwide will be plummeting during the coming fiscal year. That’s bad news for an industry that is trying to recover from one of the most severe downturns ever seen by hotels.
The rate in New York is dropping to US$269 a night from US$340 effective 1 October, a 20.9% nosedive. Vijay Dandapani, president of New York-based Apple Core Hotels, is fuming over the change. His company oversees five hotels in the city comprising 800 rooms.
“If anything, these numbers should be reversed,” he said, mentioning the recent improvement in the sector. He added, “It doesn’t make sense at all. I don’t understand what some of these bureaucrats are thinking.”
Weekly numbers for the United States and Canada are out from STR.
U.S.: Six of the seven chain-scale segments reported increases in all three key performance metrics for the week ending 28 August 2010, according to STR.
The economy segment reported a minimal average daily rate decrease, falling 0.2% to US$52.40.
Overall, the industry’s occupancy increased 10.6% to 60.1%, ADR rose 2.4% to US$96.50, and revenue per available room increased 13.2% to US$57.98.
Canada: Canada’s hotel industry reported positive results during the week of 22-28 August 2010, according to data released by STR.
In year-over-year measurements, the Canadian hotel industry’s occupancy was up 6.6 percent to 74.6%. ADR increased 1.4% to CAD$129.11 (US$122.51). RevPAR for the week rose 8% to CAD$96.34 (US$91.42).
A big growth in hotel-room supply could slow the profitability of Indian hotels, according to a Reuters report.
Global players such as Starwood Hotels & Resorts Worldwide, Marriot International and Hyatt Hotels & Resorts, are eager to grow their presence in India.
"Because of the huge supply coming in, hoteliers are not able to increase the room rates to the extent they would have liked to and they are also below the pre-crisis levels of 2008," said Sridhar Chandrashekar, head of research at Crisil Limited.
Innkeepers USA Trust can get additional bankruptcy financing from a Lehman ALI affiliate a bankruptcy court judge has ruled, according to Reuters.
The judge's decision overruled the objections of special servicer Trimont Real Estate Advisors, which opposed the additional financing saying that Innkeepers did not need "that kind of leverage."
Lehman ALI, a unit of Lehman Brothers Holdings can provide as much as US$17.5 million in financing to help fund hotel improvements and pay expenses, said U.S. Bankruptcy Judge Shelley Chapman at a New York hearing.
East Coast hoteliers with dreams of a big Labor Day weekend might see those hopes dashed. Several media reports indicate bookings are down for the cities in Hurricane Earl’s shadow.
At hotels all across Cape Cod in Massachusetts, for instance, there were calls of concern from guests who were planning getaways for Labor Day weekend, and now are worried about Earl, according to a report from whdh.com.
“They were thinking about either cutting their vacation a little bit shorter, or we’ve actually already had some cancelations,” said Josue Santiago, the concierge at Orleans Waterfront Inn.
Compiled by Shawn A. Turner.