From the desks of the Hotel News Now editorial staff:
- Oyo’s US leader sees sustainable growth opportunities
- More hotel closures expected in LA, NYC
- Hotel bonds struggle to recover amid pandemic
- Ashford asks shareholders to vote for stock proposals
- US could be headed for new wave of COVID-19 infections
Oyo’s U.S. leader sees sustainable growth opportunities: Kasra Moshkani, new head of business in the U.S. for Oyo Hotels & Homes, believes his company is well-positioned for outsized growth, even during a pandemic, because of the company’s outperformance among competitors and positioning within the broad marketplace, writes HNN’s Sean McCracken.
While business conditions are difficult across the hotel industry in the current environment, he said his company is poised for success.
“We do see this as a unique opportunity,” he said. “Understandably, a lot of owners are thinking about how their business has been shaken up. Travel dynamics have changed quite a bit. So we do see a lot of owners who are looking to partner—in particular some of the independents—who can use a partner to be successful.”
More hotel closures expected in LA, NYC: Some hotels have already closed for good in Los Angeles and New York City, and more are expected.
According to the Los Angeles Times, some hotels are expected to survive the steep decline in travel and tourism.
“We anticipate many hotels won’t survive,” Heather Rozman, executive director of the Hotel Association of Los Angeles, told the news outlet. “Industry data shows 1 in 4 properties already are struggling to pay mortgages, risking foreclosure.”
In New York, hotels such as the Hilton Times Square and the Omni Berkshire Place in Midtown have closed for good in the last two weeks, The New York Times reports.
“Financial experts say they expect the pace of hotel failures to accelerate as lenders lose patience half a year into the pandemic,” the news outlet reports.
Hotel bonds struggle to recover amid pandemic: Bonds tied to hotels and other commercial real estate sectors have “lagged behind the debt markets’ rebound, a sign of the pandemic’s lingering blow to commercial real estate,” The Wall Street Journal reports.
There’s been a broad recovery in credit markets, but “an index tracking commercial mortgage-backed securities with a triple-B rating—the lowest broad investment-grade tier” is still below pre-pandemic levels, according to the news outlet.
Bonds tied to hotels and retail are “struggling even more,” the news outlet reports.
Ashford asks shareholders to vote for stock proposals: Ashford Hospitality Trust recently wrote a letter to its shareholders asking them to vote for two proposals at an upcoming special meeting on 6 October, according to a news release.
The approval of the two proposals would allow the company to complete proposed preferred-to-common stock exchange offers.
“These strategic steps are crucial to the long-term viability of our business due to the severe impact of COVID-19 on the entire travel industry. Without your support, there is substantial doubt as to the company's ability to continue as a going concern and the value of your shares will be imperiled. We urge you to vote ‘for’ the proposals to enable the exchange offers,” the release states.
Ashford’s letter was sent in response to an open letter from shareholder Cygnus Capital, which urged votes against the exchange proposal.
“If all shares of preferred stock are exchanged in the exchange offers, existing common stockholders will be immediately diluted by approximately 94%,” that letter notes.
U.S. could be headed for new wave of COVID-19 infections: There’s fear that the U.S. could be moving toward another wave of COVID-19 infections as 39,844 new cases were reported on Sunday and close to 200,000 deaths, The Wall Street Journal reports.
Twelve states reported cases of 1,000 or more on Saturday, which was led by California with 3,822 cases and Texas with 3,377 cases.
The news outlet reports that Scott Gottlieb, a former Food and Drug Administration commissioner, said on “Face the Nation” on Sunday that there will likely be at least one more cycle of the virus going into fall and winter.
“If you look at what’s happening around the country right now, there’s an unmistakable spike in new infections,” he said.
Compiled by Danielle Hess.