Olympic coverage, which has taken viewers outside of the London core and into various submarkets for different events, is akin to hotel investor interest in many respects. Whereas the city center once served as the prime focus for development, investors are now turning their attention into previously underdeveloped submarkets, such as Knightsbridge, the South Bank and Shoreditch, writes Alexandra van Pelt of Horwath HTL.
The shift has been facilitated by a number of factors, including but not limited to:
- the city’s evolution itself, which has developed considerably over the last 20 years and has created new demand markets. The most striking example of this is Canary Wharf, which replaced the obsolete docks in the early 1990s with a vast swathe of office space and necessitated the development of hotels to meet the needs of business travelers to this area;
- the scarcity of available sites in the premium West End, which forced developers to look at less obvious locations, pushing the boundaries for London hotel development;
- the facilitation of global travel, which has had a major impact with passenger movements at Heathrow growing from 39.6 million in 1989 to a peak of 69.4 million in 2010; supply has expanded to meet the demand growth; and
- the arrival of budget airlines, which influenced demand with an influx of many more cost-conscious tourists to the city, altering the underlying demand pattern.
China is on pace to become the world’s second-largest advertising market in 2013 and the second-largest digital advertising market the following year, well behind the United States, according to new research from eMarketer. The emerging economic powerhouse is projected to spend nearly $52 billion on ad spending next year, while the U.S. is expected to spend a whopping $176 billion.
The U.S. also is projected to sit atop the ad-spending charts in the mobile arena for the first time this year, with total spending projected at nearly $2.3 billion. Japan, the previous market leader, is projected to spend more than $1.7 billion for the year. Mobile ad spending worldwide is forecast to reach more than $6.4 billion in 2012, according to eMarketer’s first-ever forecast for worldwide mobile advertising spending.
The earnings season rolls on with Q2 results from Hersha Hospitality Trust. The Philadelphia-based real-estate investment trust reported increases in occupancy (+172 basis points to 80.95%), average daily rate (+5.9% to $167.29) and revenue per available room (+8.2% to $135.42). Profits also were healthy, nearly doubling to $13.1 million for the quarter.
The strong performance kept Hersha atop Baird Equity Research’s list of hotel REITs, according to a research note. The company’s stock, which was $4.86 when the note was distributed, offers a “particularly attractive entry point given recent weakness, in our opinion.” Baird said Hersha will remain on the offensive after its $134 million follow-on equity raise in the quarter, boasting an untapped $220 million remaining on its revolver and an additional $58 million in cash.
Hersha’s stock (NYSE: HT) closed Wednesday at $4.81 and is down 2.8% year to date.
The date’s finally been set to resolve the much ballyhooed (and criticized) deal between Gaylord Entertainment and Marriott International. Gaylord shareholders will vote 19 September on the Nashville, Tennessee-based hotel company’s proposal to become a REIT—a move opposed by its largest shareholder, TRT Holdings.
The deal would have Marriott acquired Gaylord’s existing four properties as well as its management company.
International visitors to the London 2012 Olympic Games spent nearly $700 million on their Visa accounts during the week ending 29 July, according to Visa. The biggest spenders were from the U.S., followed by Japan, France, Italy and Australia.
Travelers from South America and Central America showed some of the largest year-over-year travel spend increases in the U.K., including triple-digit increases from Nicaragua (+384%), Honduras (+338%), Guatemala (+324%) and Bolivia (+309%).
Compiled by Patrick Mayock.