From the desks of the Hotel News Now editorial staff:
- China economy slows for first time in 27 years
- Financing secured for first US-based Raffles hotel
- Fluctuations in daily RevPAR make volatility new normal
- Boeing 737 cancellation extended again
- Atlanta Sheraton closes following cases of Legionnaires
China economy slows for first time in 27 years: As the trade war between China and the United States continues to be at a stalemate, China’s economy is feeling the pinch. For the first time in nearly three decades, its pace of economic growth has slowed, NPR reports.
In the second quarter, the economy grew at a pace of 6.2%, a drop from the 6.4% growth in the first quarter, data from the Chinese government states. The 6.2% growth pace is the slowest since 1992. A spokesperson for China’s National Bureau of Statistics said the “external environment” is more complicated than it once was.
U.S. President Donald Trump and Chinese President Xi Jinping “vowed to resume trade talks after meeting at the G-20 summit in Japan in June. In what analysts see as a monetary truce, Trump chose to hold off on a threat to impose new tariffs on about $300 billion worth of additional Chinese imports,” NPR writes. China’s government continues to implement policies to encourage economic stimulation through domestic investment.
Financing secured for first U.S.-based Raffles hotel: A year has passed since the project was announced, but a construction loan has finally come to fruition for the Raffles Boston Back Bay Hotel & Residences, according to Bisnow.
The loan of $314 million in construction financing was secured for development partners Noannet Group and Saunders Hotel Group from New-York based Madison Realty Capital. Cain International will provide the developers most of the equity for the more than $400-million project. Construction is set to begin at the end of 2019.
Expected to open in 2021, the planned 147-key hotel and 146-residence mixed-use development will take the place of the Boston Common Hotel and Conference Center. It will be the first Raffles-branded hotel to land in North America. The project “comes amid a luxury hotel boom across the city,” Bisnow writes.
Fluctuations in daily RevPAR make volatility new normal: An analysis of total U.S. performance and a look at several global markets shows that revenue per available room changes exceeding 10% have occurred almost every day since the mid-2000s, which points to volatility becoming the new normal for hotel revenue managers, writes Jan Freitag, SVP of lodging insights, and Brian Riley, researcher on the Market Insights Team, of STR. (STR is the parent company of Hotel News Now.)
“The main takeaway from this examination is that wide outliers to the RevPAR average are the new norm. It will be helpful for operators in each market to understand if performance fluctuates more wildly than in other markets and if they can therefore expect more volatile results week to week and day to day. This in turn might be an indicator of how much their daily comp-set data varies from the market results,” the two write.
Boeing 737 cancellation extended again: For the fourth time this year, American Airlines announced it is extending the cancellations of about 115 daily flights due to the grounding of the Boeing 737 MAX jets. This time, the cancellations could last until November, Reuters reports. The previous extension was said to be until September.
This decision comes after a new uncovered flaw in the jets was discovered in June.
Although some analysts said they don’t expect the jets to fly again before the end of 2019, “American Airlines remains confident that impending software updates to the Boeing 737 MAX, along with the new training elements Boeing is developing in coordination with our union partners, will lead to recertification of the aircraft this year,” the airline said in a statement to the news agency.
Atlanta Sheraton closes following cases of Legionnaires: A Sheraton hotel in downtown Atlanta has closed until further notice as the Georgia Department of Health is investigating three confirmed cases of Legionaries’ disease said to have originated at the property, according to WSB-TV 2 Atlanta. More than 400 people had to relocate from the hotel.
A number of people had complaints about suffering lung problems after attending a convention at the hotel a couple of weeks ago, the news station reports.
In a statement, Ken Peduzzi, GM of Sheraton Atlanta, said “the health and safety of our guests is our greatest priority. We are working closely with public health officials and outside experts to conduct testing to determine if Legionella is present at the hotel. As a result, out of an abundance of caution we have made the decision to close the hotel while we await the results. The Sheraton Atlanta is currently working to relocate its guests to nearby hotels. It is also reaching out to guests with upcoming reservations to assist in directing them to other nearby hotels. Guests whose reservations have been canceled will receive a full refund.”
Compiled by Dana Miller.