Already entrenched in rolling out a renewed focus that includes an emphasis on staff training and improved bedding for the Crowne Plaza Hotels & Resorts brand, InterContinental Hotels Group wants to reposition the brand to the upper-upscale segment, writes HotelNewsNow.com’s Jason Q. Freed.
In doing so, the franchisor will take a hard look at each of the nearly 400 hotels in the portfolio and expects about 40, or 10% of the brand, won’t fit the mold for an upper-upscale product and will be removed from the system.
“We’re following what we call our ‘Rest to Best’ strategy where we want to get all of the hotels to move up to where the top-performing hotels are,” said Janis Cannon, VP of global brand management for Crowne Plaza and Hotel Indigo. “There are plans to remove hotels from the system. It’s either move up or move out.”
A joint venture led by Five Mile Capital Partners LLC gained control of 143 hotels by purchasing US$700 million of Red Roof Inns debt, a source told Bloomberg.
Five Mile and Westmont Hospitality Group bought the loans on the economy-level hotels on 25 August, said Andrew Alexander, president of Columbus, Ohio-based Red Roof Inns. The venture contributed US$70 million toward renovations in addition to the purchase price as part of the deal, the report says. A partnership led by Dune Real Estate Partners, which bought debt on Red Roof Inns earlier this year and gained control of 51 hotels, provided US$20 million for upgrades.
“Both of these transactions were completed as acquisitions at a discount to par value,” Alexander told Bloomberg. He wouldn’t say how big the discount was. “That has allowed them to de-lever the assets and move forward with the renovations.”
PricewaterhouseCoopers lowered its forecast for revenue-per-available-room growth to 7.5% and 6.2% in 2011 and 2012, respectively, due to a “resetting of the economic outlook.”
The economy faces more fundamental and persistent headwinds than economists previously anticipated, PwC said in a news release, and this environment weighs on the hotel industry outlook, reducing expectations of RevPAR growth for the remainder of 2011 and into 2012.
The reduced outlook for the hotel sector reflects the balanced consideration of weaker economic fundamentals on the one hand, and solid year-to-date lodging trends on the other, PwC said. The steady growth of hotel demand during recent months, even as the economy slowed, demonstrates the underlying momentum of hotel industry’s recovery. This recovery of demand is expected to continue but will be tempered by the weaker macroeconomic outlook.
Guest satisfaction with hotels edged upwards in the second quarter of 2011 (+0.2 to 84.5), according to Market Metrix’s second quarter results released today.
Jumeirah Hotels and Resorts (+6.3 to 97.9) posted the top customer satisfaction score among hotel brands. Most industry segments reported higher satisfaction scores with upper midscale hotels (+1 to 84) and luxury hotels (+0.9 to 89.4) posting the biggest gains, according to Market Metrix.
The following brands won their respective categories:
|Hyatt Summerfield Suites
For more results, read “Market Metrix: Jumeirah leads in customer satisfaction.”
Kerzner International Holdings is considering a sale of its 50% stake in the Atlantis resort in Dubai to raise money to restructure mortgage debt coming due next week on the Atlantis resort in the Bahamas, according to a Wall Street Journal report.
The company released the following statement to HotelNewsNow.com: “It is company policy not to comment on rumors or market speculation. We remain in active and constructive discussions with our lenders.”
Kerzner is in talks to sell the stake in the Dubai Atlantis to Istithmar World, Dubai's investment arm, sources told the WSJ. Istithmar already owns the other half of the Dubai resort as Kerzner's partner and largest shareholder. Some people familiar with the discussions said the sale, if consummated, could reap as much as US$250 million to US$350 million.
Kerzner finds itself in a similar situation as several hotel chains recently taken private during the real-estate boom and left with considerable amounts of debt during the recovery.
Compiled by Jason Q. Freed.
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