From the desks of the Hotel News Now editorial staff:
- Wanda Group founder to buy majority stake in hotel company
- US tax overhaul’s next hurdle is reconciling differences in bills
- Airbnb, Expedia execs see symbiosis with hotels
- Meliá ends takeover bid for Elegant Hotels
- Trump Organization disputes claim brand is hurting hotels
Wanda Group founder to buy majority stake in hotel company: In a move expected to boost the company’s liquidity, Dalian Wanda Group founder Wang Jianlin will buy a majority stake in Wanda Hotel Development Company for $3.67 billion Hong Kong dollars ($469.6 million), Reuters reports.
According to a statement issued to the stock exchange on Monday, Wanda Commercial Properties Overseas, of which Wang owns about 60%, will transfer its 65% stake in Wanda Hotel Development to Wanda Hotel Investment Holding Company, which is fully owned by Wang, for a per-share price of 1.20 Hong Kong dollars ($0.15).
“The deal is … expected to shore up the finances of Wanda Commercial Properties Co Ltd, which wholly owns Wanda Commercial Properties Overseas,” Reuters reports, citing S&P ratings which put the company’s total debt as of June at $42.17 billion.
U.S. tax overhaul’s next hurdle is reconciling differences in bills: After the Senate voted 51-49 early Saturday morning to pass its version of a bill to overhaul the U.S. tax code, the legislation’s next hurdle is reconciling it with the version that the House passed in mid-November, reports The Washington Post.
While “party leaders insist that there are no showstopping differences between their two bills, each of which features a decrease in the corporate tax rate from 35% to 20%,” the Post reports, “… the bills feature differences worth hundreds of billions of dollars.”
For example, the House bill includes a much larger cut in taxes on income for “pass-through” businesses, which The Post defines as ranging from “small businesses to large real estate companies and professional sports franchises … often owned by a single entity or partnership, and their income is passed through to the owners, who pay taxes on that money through the individual income tax code.”
Airbnb, Expedia execs see symbiosis with hotels: “At the end of the day, we are definitely competition,” said Shawn Sullivan, head of public policy for the Caribbean & Latin America for Airbnb, about the company’s relationship with the hotel industry.
But, he added, “There’s nothing that says that hotels can’t do the same thing (as Airbnb)—they just need to do it. … I actually think competition is good, and it’s the consumer that will win when this all settles out.”
Sullivan was joined by Expedia’s Global Senior VP Hari Nair for an on-stage interview recently at the Caribbean Hotel Investment Conference & Operations Summit, which Hotel News Now’s Jeff Higley breaks down into talking points for hoteliers.
Nair said that online travel agency Expedia looks at itself “as a channel,” which ultimately can link the consumer back to brand.com, “no issues whatsoever. ... So it is a little painful when you think about our relationship (with hotels) because we see it very, very differently.”
Meliá ends takeover bid for Elegant Hotels: Caribbean hotels operator Elegant Hotels Group announced it had received a takeover bid from Spain’s Meliá Hotels International, but talks have now ended with no deal, reports The Times.
“The company further announces that discussions with Meliá Hotels have now been terminated and that Meliá Hotels does not intend to make an offer,” the Elegant Hotels board of directors said in a prepared statement, according to the article.
Elegant “owns and operates seven luxury hotels in Barbados, including the Colony Club, Tamarind, Crystal Cove and Turtle Beach hotels,” The Times reports.
Meliá’s hotel portfolio includes about 370 hotels in 43 countries.
Trump Organization disputes claim brand is hurting hotels: The Trump International Hotel & Tower Panama is looking to be the third hotel in five months to remove the Trump brand flag, which seems to indicate that the Trump brand is viewed as harmful to its properties, Travel Weekly reports.
The owners of the 70-story, 369-room Panama hotel “collectively paid at least $32 million for the Trump association,” the article states, but since then they “have had trouble selling its condominium units.”
The Trump Organization disputes the claim that the property is suffering poor performance, saying in a statement: “Not only do we have a valid, binding and enforceable long-term management agreement, but any suggestion that the hotel is not performing up to expectations is belied by the actual facts. Despite the fact that Panama City has experienced a 21% increase in hotel rooms since 2014, over the last three years, the hotel has outperformed the market by a wide margin — as much as 20% — by virtually measure.”
But the Panama hotel, along with New York’s Trump SoHo (which reached an agreement to remove the Trump flag by year’s end) and the former Trump International Hotel & Tower Toronto (rebranded in June under Marriott International’s St. Regis brand), “account for more than 25% of the Trump Organization’s global total,” Travel Weekly reports, adding that: “the willingness of hotel owners to pay the company millions of dollars to terminate its contracts before they expire suggest that the president’s polarizing effect on prospective travelers is hurting demand.”
Compiled by Robert McCune.