From the desks of the Hotel News Now editorial staff:
- Marriott CFO on the most important tool in the toolbox
- Whitbread reports full-year 2018 results
- What asset managers are investing in
- Private-sector companies spending less on bonuses
- Hotels not booking locals?
Marriott CFO on the most important tool in the toolbox: When economic issues lead to a slowdown, or breakdown, in the hospitality industry, Marriott International EVP and CFO Leeny Oberg said the most important tool in the toolbox will be brand relevance, writes Hotel News Now’s Robert McCune.
That means “keeping up with the new and latest, greatest trends of what our customers want in the various brands,” as well as “working with our owners to keep those hotels new and fresh with the design and the state of the product that our guests are staying in,” she said.
Marriott’s new loyalty program, Marriott Bonvoy, plays a large role in that effort, she added.
Whitbread reports full-year 2018 results: Whitbread PLC, the parent company of Premier Inn, reported its full-year 2018 financial results on Wednesday. The company posted a 4.6% year-over-year drop in U.K. like-for-like room sales, which executives blame on the weakened business environment and consumer confidence due to Brexit, writes HNN’s Terence Baker.
In a company news release, Alison Brittain, CEO, remained buoyant saying that “we have delivered a resilient performance in the first quarter despite more challenging market conditions, and we continue to make good progress with our efficiency program, which is helping to partially offset another year of high industry cost inflation.”
What asset managers are investing in: According to Bloomberg, the “hottest thing in investing” the past 10 years has been low-cost exchange-rate funds, but now some big asset management companies are taking a liking to “buying a fund with higher fees and restrictions on when you can take your money out,” often called “interval funds.”
In the past two years, companies such as Pacific Investment Management Co., Blackstone Group, Ares Management and BlackRock have all introduced interval funds, which “restrict total withdrawals to a range of 5% to 25% of fund assets in a specified period, such as once a quarter,” Bloomberg writes.
The incentive for investors to buy in despite the higher fees and restrictions is that “fund companies say interval funds have a change to deliver higher returns by capturing what’s known as the illiquidity premium,” Bloomberg reports.
Private-sector companies spending less on bonuses: The 2017 Republican tax cut caused an uptick in employee bonuses handed out by some private-sector companies in late 2017 and early 2018; however, that’s now slowing down, The Wall Street Journal reports from data released by the U.S. Department of Labor.
Spending by private sector-companies on nonproduction bonuses dropped 24% in the first three months of 2019 compared to the year prior, the largest decrease in benefit costs on record since 2005, according to the article. The smaller bonuses show consistency with other data suggesting that benefits from the tax law were short-term.
One reason bonuses might also be smaller is because employees would prefer to receive pay raises rather than one-time rewards in a strong labor market, William Ziebell, CEO of benefits consultant Gallagher Benefit Services told the newspaper.
Hotels not booking locals?: A reader of Citizen Times in Asheville, North Carolina, asked why some local hotels won’t allow local residents to book rooms. Industry experts answered whether or not their hotels practice that and why.
Himanshu Karvir, president and CEO of Virtelle Hospitality, which operates several hotels in the Asheville area said one of his hotels has that policy in place, and “the biggest reason my hotels do it is we’ve obviously had experiences where we’ve rented to someone with a local address and they had a party or violated the policies of the hotel.” The decision to turn away locals is up to the hotel’s manager, he said, and as long as the hotel is consistent with its policies and not discriminating, no laws are being broken.
However, in general, he said there are circumstances in which locals would need a room and his hotels will accommodate that.
Compiled by Dana Miller.