5 things to know: 2 December 2014
02 DECEMBER 2014 9:13 AM
• Loews names Kirk Kinsell new CEO
• Dalian Wanda prepares $4b IPO
• Ebola scare did not deter business travel in November
• Tide turning for UK’s independent hotels
• Club Med counter bid could be harmful, CEO says
Loews Hotels & Resorts has named Kirk Kinsell as president and CEO, effective 2 March 2015. Paul Whetsell will remain CEO until that time and will then become vice chairman to ensure a smooth transition. Both will report to Jonathan Tisch, who will continue his leadership as chairman.
Kinsell joins Loews Hotels after 19 years in senior positions with InterContinental Hotels Group and more than 35 years in the hospitality business. Most recently, he served as president, the Americas for IHG. With more than 3,700 hotels under his management, Kinsell was responsible for business development and performance of all hotel brands and properties in North and South America. Prior to IHG, Kirk was with ITT Sheraton and Trammell Crow Hotel Company.
Dalian Wanda Commercial Properties Company, the Chinese developer controlled by billionaire Wang Jianlin, won Hong Kong stock exchange approval for its initial public offering, according to a Bloomberg report citing people with knowledge of the matter. The Beijing-based company plans to seek $4 billion from the sale of a 15% stake. It aims to start trading by the end of December.
Dalian Wanda Commercial is planning Hong Kong’s biggest property IPO after China cut interest rates to spur growth. The Shanghai Stock Exchange Property Index, which tracks 24 stocks, has jumped 9.7% to near a four-year high since the country’s central bank announced the rate cut 21 November.
The company, founded in 2002 in northeastern China, owns 48 hotels across the nation, among other real estate holdings.
The threat of Ebola did not deter business traveler bookings during November, according to the “November 2014 TravelClick North American hospitality review.” Booking pace in the month was up 1.6%. Transient leisure booking pace, however, was down 1%.
“Despite global travel concerns over Ebola, the hotel sector continues to grow, and we expect this trend to continue through the rest of 2014 and into 2015,” said John Hach, senior VP, global product management at TravelClick. “Looking forward, TravelClick sees a real opportunity for capturing shorter-term group business, which should help bolster overall average-daily-rate performance throughout 2015.”
Group reservations pace was a particular bright spot, increasing 10.5% during November.
London aside, the independent hotel sector in the United Kingdom has been broadsided over the past half a decade or so, but the tide seems to have turned in 2014, writes HNN’s Terence Baker from the Independent Hotel Show in London.
“There is much hope in the provinces where we’ve seen double-digit (revenue-per-available-room) increases. Unless there are surprises, their upward curve will continue for the next two to three years. Those who rode out the storm will prosper,” said Lionel Benjamin, director of hotels at Topland Property Group.
Possible problems that could slip up this strong growth trajectory include:
- rates ramping up too quickly and thus deterring price-conscious guests;
- the fear of slipping back into recession;
- the sharing economy eating into revenues; and
- the importance or not of guest reviews and where to place them.
A new counter-bid from Italian tycoon Andrea Bonomi would be harmful to Club Mediterranee as it would require “massive cost cuts” in the resort group to make the investment profitable, according to Club Med's CEO Henri Giscard d'Estaing, Reuters reports.
Chinese investment group Fosun sweetened its offer for Club Med at the last minute on Monday, out-bidding Bonomi once again in France's longest-running takeover battle. Fosun's €23.50 ($29.19) per share offer is €0.50 ($62 cents) higher than Bonomi's and values the all-inclusive holiday pioneer at €897 million ($1.12 billion). Bonomi now has until 17 December to make a potential counter-offer.
D'Estaing defended Fosun's bid, which the board unanimously recommended last month. He argued it was a long-term project focused on developing the brand in China and dismissed Bonomi's project as short term and financial.
Compiled by Terence Baker and Patrick Mayock.