Sunstone Hotel Investors agreed to buy the Wyndham Chicago from Blackstone Group LP for $88.4 million.
Sunstone will fund the purchase with $30 million cash and $58.4 million of common shares, to be issued to New York- based Blackstone at the equivalent of $10.71 each, the Aliso Viejo, California-based real estate investment trust said in a statement yesterday. The 417-room hotel will be renamed the Hyatt Chicago Magnificent Mile.
Sunstone is teaming with Hyatt Hotels Corporation on a $25-million renovation of the property.
While MGM Resorts International continues to look for opportunities in key gateway cities, some changes are coming to properties already in place. Chairman Jim Murren said during Thursday’s first-quarter earnings call the Viva Elvis show at Aria Resort and Casino within CityCenter will be exiting stage left, replaced by Zarkana, a Cirque du Soleil show. Murren said the new show is expected to increase resort traffic.
Change won’t come, however, by way of new faces. While occupancy at MGM resorts is up approximately 66,000 roomnights over 2011, there are no plans to add any full-time employees for the remainder of 2012. Staffing levels are up 0.4% at MGM properties, which Murren called “relatively flat.”
The Asian American Hotel Owners Association has come a long way since its humble beginning nearly 20 years ago, but not all of that progress has been for the better, panelists said Thursday during the association’s annual conference.
When AAHOA was founded nearly 20 years ago, its mission was to fight discrimination in the hotel industry and bring Asian hoteliers into the mainstream. The group largely achieved that goal, numbering nearly 11,000 members who represent 40% of the country’s hotel stock.
But along with size has come a jockeying for power, said Vinay Patel, senior VP of operations and sales for SREE Hotels.
“It becomes politicized. It becomes a game,” he said.
A study published this month by the Cornell Hospitality Quarterly found that central city locations have a dual effect on hotel room rates.
The authors of the study theorized that rate-based competition would intensify among contiguous hotels, but they also proposed that such rate-based competition is contingent on demand levels. When demand is strong, one would not expect rate-based competition.
A test of this hypothesis using data from the downtown Chicago hotel market supported that a central location has a dual effect on hotel room rates. Hotels see higher premiums in the peak season because of strong demand, and steeper discounts in shoulder seasons, as a result of competition with nearby hotels. The findings also suggest existing models, which do not consider hotel spacing, might have overestimated the central location premium.
Find the full report here.
A survey by Eccomplished finds online recommendations are now considered to be more important than traditional word-of-mouth, reports Econsultancy.
Thirty-one percent of respondents said they had read an online review before making a purchase, compared to 23% who asked for advice from friends and family.
A further 18% read comments on online articles, while just 6% sought advice on social media. Even among respondents aged 18-24 the use of social media only increases to 11%.
While consumers seek advice and information from a variety of sources when deciding which product to buy, there is one key factor that determines where people make a purchase—price. Sixty percent of respondents said they choose where to buy based on who offers the lowest price.
Compiled by Stephanie Wharton.