From the desks of the Hotel News Now editorial staff:
- Hurricane Florence could be especially costly
- UK hoteliers want Parliament’s help with labor woes
- International trade faces multiple hurdles
- Hotel stock performance flat in August
- Las Vegas growing but wary of downturn
Hurricane Florence could be especially costly: Hotels in the Carolinas are expected to be hit by Hurricane Florence, and the storm is expected to take an unusual path that could bring damage and other storm-related issues further inland than usual, according to Bloomberg. The news agency reports that hotels in the region are already seeing a wave of cancellations and total losses related to the storm could reach $27 billion after it makes landfall on Friday.
“With everything from vacation rentals in the Outer Banks of North Carolina to the luxury hotels in historic Charleston in its path, the storm would wreak havoc on an industry that employs about 10% of all workers across the two states,” Bloomberg reports. “South Carolina’s tourism business generates more than $21 billion in annual sales, according to the state’s department of Parks, Recreation and Tourism. In North Carolina, the industry brings in about $24 billion, according to the state’s Restaurant and Lodging Association.”
U.K. hoteliers want Parliament’s help with labor woes: Hotels in the United Kingdom face no shortage of labor-related issues, stemming from both society perceptions of careers in hospitality and immigration policy, so the trade organization representing hospitality in the country is reaching out for governmental help, writes HNN’s Terence Baker. UKHospitality—the country’s chief hospitality lobby organization—met with members of Parliament Monday to discuss the organization’s recent report on the hospitality workforce, and at least some members seemed receptive to the message.
“Given the size of the industry, that it is treated as a Cinderella is outrageous,” said Nic Dakin, Labour Party Member of Parliament for Scunthorpe and chairman of the All-party Parliamentary Group on Education.
International trade faces multiple hurdles: If the strength of the global economy and global commerce is something the hotel industry is banking on to fuel higher levels of international travel, there are clouds on the horizon, according to a report from The New York Times that notes there are several serious issues as U.S. and European officials meet in Brussels to discuss trade.
European Commissioner for Trade Cecilia Malmstrom has already promised that the European Union will be less accommodating to American trade demands than Mexico, The Times reports, and a back-and-forth on vehicle tariffs underlines that issue.
“The EU is not going to work that way,” Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, told the newspaper. “They are not going to roll over the way the outgoing Mexican government did. There isn’t going to be an easy win here.”
Hotel stock performance flat in August: The Baird/STR Hotel Stock Index stood pat for the month in August and year to date is marginally down 0.3%, despite continued record demand in the industry. The combined performance of hotel C-corps and real estate investment trusts drastically lags the overall markets, as the S&P 500 is up 8.5% year to date. (STR is Hotel News Now’s parent company.)
Michael Bellisario, senior hotel research analyst and VP at Baird, said the lagging stock performance seems to be tied to investors looking for more growth than hotel companies are promising.
“While second-quarter earnings reports were generally positive, forward-looking guidance updates did not signal any further growth reacceleration would be forthcoming in the near term, which we believe left some investors disappointed, particularly as 2019 outlooks are coming into focus,” he said in the news release announcing August performance.
Las Vegas growing but wary of downturn: While it took Las Vegas longer to bounce back than some other markets following the last recession, the city has experienced a recovery in recent history. But worries remain about what the next recession will look like, pushing some to try to diversify beyond the relatively volatile travel and gaming industries that historically have fueled the Las Vegas economy, Reuters reports.
“Though construction cranes once again rise above casinos along the Strip, Las Vegas is trying to prepare for the next downturn—whenever that may be—by trying to wean itself off the reliance on housing and hospitality and turning to industries ranging from professional sports to medical care,” the news agency reports.
Compiled by Sean McCracken.