From the desks of the Hotel News Now editorial staff:
- Service Properties commits to rebranding IHG hotels
- Winter is coming for travel destinations
- UK hoteliers bemoan lack of help from OTAs
- US-China trade talks boost markets
- Short-term rental occupancy improves in Philly, lags hotels
Service Properties commits to rebranding IHG hotels: Service Properties Trust executives said Tuesday the company is officially going ahead with plans to terminate its agreement with InterContinental Hotels Group, rebranding 103 currently IHG branded properties to Sonesta, according to a news release. The conversions will go into effect in November.
Service Properties Trust previously announced IHG had fallen behind on paying minimum returns and rents for July and August, and the companies were unable to reach a compromise to avoid termination of the agreement.
“SVC and IHG have had a long relationship which began in 2003, but we were unable to reach a mutually agreeable resolution to the defaults by IHG under our management agreements with them,” Service Properties Trust President and CEO John Murray said in the release. “Therefore, after a period of negotiation with IHG, we determined to terminate IHG and rebrand these hotels with Sonesta. Based on historical experience, we believe the current portfolio of 103 hotels may perform as well, or better, as Sonesta hotels post-conversion and once stabilized in their respective markets.”
Sonesta and Service Properties Trust are both managed by The RMR Group.
In response to a request for comment, IHG spokesperson Soojin Yoon noted the company’s decision to not continue paying minimum rents was related to cost-containment efforts.
“As the industry continues to recover from the unprecedented impact of COVID-19, IHG is committed to remaining in sound financial condition by reducing costs and protecting cash flow, ensuring our management agreements are in line with this approach,” Yoon said via email. “As we noted in in our half-year results earlier this month, we are well capitalized and maintain a total available liquidity of $2 billion.”
Winter is coming for travel destinations: Markets such as Myrtle Beach, South Carolina, could face dark days ahead, as parts of the southern U.S. continue to struggle with the spread of COVID-19, Bloomberg reports.
Businesses in those markets were battered by the initial shutdowns related to the virus and now face concerns over the spread of the virus amid criticism that markets reopened too early, the news agency reports.
“Myrtle Beach was labeled a ‘petri dish’ for the virus after outbreaks in other states were tied back to the town, with some condemning Myrtle Beach,” Bloomberg reports. “Mayor Brenda Bethune pushed back against the flood of criticism, describing the town’s decisions as a ‘balancing act.’”
U.K. hoteliers bemoan lack of help from OTAs: In a time of historic difficulty for hoteliers, many groups are offering some sort of aid and concessions. But hoteliers in the U.K. say they’re not seeing that same spirit of helpfulness from the online travel agencies, HNN’s Terence Baker reports.
“The government is helping and brands and banks are making concessions, but OTAs have not said one word of kindness, and certainly offered no concessions. (OTAs) are a major stakeholder in this industry,” said Al Malik, owner and managing director of Remarkable Hotels and a director of Best Western Hotels (Great Britain). “I am not anti-OTA. I recognize they play a major part of our business, but while brands could do more, they have done a lot. OTAs? Nothing.”
U.S.-China trade talks boost markets: New talks between U.S. and Chinese trade officials sparked some optimism among investors, pushing up the S&P 500 and the Dow Jones Industrial Average in early trading, The Wall Street Journal reports.
Relations between the two countries have grown more acrimonious through the course of the COVID-19 crisis, the newspaper reports, and investors are looking for signs of normalized relations.
“Of course it’s positive when you have that kind of newsflow—it’s reassuring,” Nadège Dufossé, head of cross-asset strategy at asset manager Candriam, told The Journal. “It’s not in the U.S. and China’s interest to have a new trade war.”
Short-term rental occupancy improves in Philly, lags hotels: Occupancies for short-term rentals in Philadelphia grew by 13.2% from June to July, according to the latest data from Hotel News Now’s parent company STR and AirDNA. However, the 46.9% occupancy for short-term rentals still lags the 47.9% occupancy for hotels in the market.
Average daily rate at short-term rentals drastically outperformed that of hotels in Philadelphia. ADR was up 21.9% to $181.40 for short-term rentals in July, while hotel ADR was up 10.2% to $96.50.
Compiled by Sean McCracken.