5 things to know: 28 September 2012
5 things to know: 28 September 2012
28 SEPTEMBER 2012 8:56 AM

From the desks of the HotelNewsNow.com editorial staff:
• Analyst: 7 Days Group private buyout likely
• Accor planning $1.5b expansion in Brazil
• Google: Mobile-friendly sites key to loyalty
• Summit to acquire 8 hotels for $84.7m
• Asian, Middle East investors eye Europe


The private buyout offered to 7 Days Group Holdings Limited by a consortium of shareholders valued at $634.7 million is likely to occur, according to a Hong Kong-based research analyst, reports HotelNewsNow.com’s Stephanie Wharton.

Noah Hudson of Guotai Junan Securities said the group of shareholders that proposed the private buyout, including Co-founder and Co-chairman Boquan He and Co-chairman and former CEO Nanyan Zheng, could be strategizing to increase the company’s value as a private entity and take it public again down the road.

“I think they believe that 7 Days is undervalued in the market, and so they can buy it on the cheap now. Then, maybe in a few years take the company public again on another exchange that is more friendly toward China concept stocks at a much higher valuation,” Hudson said in an email. Chinese concept stocks are stocks that have significant activities in China.

Many Chinese concept stocks listed in the U.S., including 7 Days, are down because a number of investors are reluctant to buy them because of related scandals in recent years, he said. “While there are plenty of bad apples, the good companies are getting lumped in with the bad ones, as far as investors are concerned … So good companies like 7 Days end up being undervalued in the market.”

Accor is planning a $1.5-billion expansion in Brazil to lift the number of properties run under its brands there to 250 during the next four years, according to a news release.

The hotel operator has a secured pipeline of 90 contracts to be delivered by 2016, resulting in an increase of more than 13,000 news rooms.

The company agreed in July to acquire hotel operator Grupo Posadas for $275 million, an acquisition that would add 19 existing or planned hotels to the 153 that it already operates directly or through franchises in Brazil. Accor has opened 11 hotels in the Latin American nation this year and another 11 are scheduled to open before the end of 2012, adding a total of 3,068 rooms.

If your property or brand don’t yet have a mobile-optimized website, you might be driving would-be guests into the beds of your competitors, according to a new study from Google titled “What users want most from mobile sites today.”

The report, which surveyed 1,088 U.S. adult smartphone users during July 2012, found that 67% of users are more likely to buy a product or use a service from “mobile-friendly” sites. On the other side of the coin, 61% of respondents said they “quickly move to another site” when they don’t see what they’re looking for right away on a mobile site.

Some of the reports other key findings:

  • Nearly all consumers, 96%, say they’ve encountered sites that were clearly not designed for mobile devices.
  • One in two users said that a bad mobile experience made them less likely to engage with a company
  • Also, half of respondents said even if they like a business, they will use it less often if the website isn't mobile-friendly.

Summit Hotel Properties announced Wednesday it entered into a definitive agreement to acquire a portfolio of eight unencumbered hotels containing an aggregate of 1,043 guestrooms from certain affiliates of Hyatt Hotels Corporation for a purchase price of approximately $87.4 million, subject to closing prorations and adjustments. The deal is expected to close during the fourth quarter.

The properties include the Hyatt House Denver Tech Center in Englewood, Colorado (135 rooms) and seven Hyatt Places in Arlington, Texas (127 rooms); Lone Tree, Colorado (127 rooms); Englewood, Colorado (126 rooms); Owings Mills, Maryland (123 rooms); Lombard, Illinois (151 rooms); Phoenix (127 rooms); and Scottsdale, Arizona (127 rooms).

Summit has an additional two hotels under contract: the 98-room Hilton Garden Inn in Fort Worth, Texas, for a purchase price of $7.2 million and the 178-room Residence Inn in Salt Lake City for a purchase price of $20 million.

Investors from Asia and the Middle East are eyeing the European hotel deals landscape with interest, but they’ll have to get in line, according to panelists speaking during the Hotel Investment Conference Europe.

“There’s a lot of equity, there’s a lot of money out there,” said Ramsey Mankarious, chief executive of Cedar Capital Partners. “The challenge is finding debt.”

Cliff Risman, partner, Gardere Wynne Sewell LLP, said the deals that have been completed are getting done by acquirers that have cash. “People will come in and acquire on all equity on the theory that after you close you can layer in debt once the asset is stabilized,” he said.

Compiled by Patrick Mayock.

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