Historical trends and forecasts indicate rising oil prices likely won’t affect the hotel industry’s busy travel season, according to data gurus presenting during the 21st annual Meet the Money conference at the Sheraton Gateway Los Angeles.
Mark Woodworth, president of PKF Hospitality Research, said unless there’s an extreme spike to more than US$150 a barrel for oil, the hotel industry shouldn’t see any negative effects from rising costs at the gas pumps. PKF modeled three hypothetical situations for rising gas costs: one with a base price of US$95 per barrel, one with a price of US$125 per barrel and one with a price of US$150 per barrel.
“It’s not until we get to the (US)$150 dollar a barrel scenario until (revenue per available room) dips,” Woodworth said.
He used Moody’s Analytics’ proclamation that every US$1 increase in the price of crude oil raises gasoline prices by 2.2 cents per gallon and costs consumers about US$3 billion over the course of a year. He then cited PKF research from 2005 and this year as reason to believe consumers will continue to fill their gas tanks.
Hyatt Hotels Corporation will deploy capital for select-service segment growth, reports HotelNewsNow.com’s Patrick Mayock.
“The progress of (Hyatt Place and Hyatt Summerfield Suites) is unambiguous,” Mark S. Hoplamazian, president and CEO, said Tuesday during a first-quarter earnings call. “… We really feel confident about further investment behind the brands.”
Such investment—in the form of loans, sliver equity or more significant capital contributions—is necessary to overcome the sluggish state of financing, he said.
“We will continue to remain flexible, because the market does change and has changed,” Hoplamazian said. The company is pursuing both new construction and conversions.
Chatham Lodging Trust won two separate auctions resulting in investments of more than US$230 million.
A joint venture formed by Cerberus Capital Management and Chatham was selected as the winning bidder in a bankruptcy court auction related to 64 of Innkeepers USA Trust hotels. Cerberus and Chatham will be the plan sponsors to acquire the hotels for a total purchase price of approximately US$1.13 billion, including the assumption of debt through a plan of reorganization. Chatham will fund its investment in the joint venture with available cash and borrowings under Chatham’s secured revolving credit facility.
In a separate transaction, Chatham was selected Tuesday as the winning bidder in a bankruptcy court auction related to five additional hotels owned by affiliates of Innkeepers. Chatham has executed a purchase agreement with the sellers to acquire five hotels, comprising 764 rooms, for US$195 million, or $255,000 per room.
On this third day of the special report, “China: A hotelier’s roadmap,” we investigate the distribution landscape for hotels in the country.
While the Chinese government lures international 5-star hotel brands, the lower-tier hotel market is expanding into secondary and tertiary cities throughout China to meet the demand needs of a new, domestic traveler, reports HotelNewsNow.com’s Jason Q. Freed. Simultaneously, the online distribution space is adapting to connect that emerging consumer with increasing hotel supply.
Employment in the U.S. nonfarm private business sector rose 179,000 from March to April on a seasonally adjusted basis, according to the latest ADP National Employment Report. The estimated change of employment from February 2011 to March 2011 was revised up to 207,000 from the previously reported increase of 201,000. http://www.adpemploymentreport.com/pdf/FINAL_Report_April_11.pdf
Wednesday’s ADP National Employment Report shows labor market conditions continued to improve in April, but only at a moderate pace. The increase of 179,000 is close to consensus expectations both for Wednesday’s report and for Friday’s jobs report from the U.S. Bureau of Labor Statistics.
Compiled by Stacey Higgins.
