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Investment, consolidation target extended-stay sector

hotelnewsnow.com Featured Articles - ·8h
Investors and consultants agree the extended-stay segment is primed for private equity investment and consolidation. The serviced apartments/aparthotels industry still has a ways to go in Europe, but increased involvement from institutional capital will soon yield consolidation, especially as serious investors begin to understand the upside on the operator side of the sector, sources said. “In the last couple of years, professional money has joined the space, but the sector requires a seminal moment, along the lines of the hostel sector’s seminal moment when Queensgate Investments bought Generator, and with that will come the bulk of investment,” said Andrew Harrington, partner at business consultancy AHV Associates, during a panel titled, “Investment and finance: The institutional investor and private equity picture” at Serviced Apartment Summit Europe. “Extended-stay/serviced-apartment units are hotel rooms with better margins, so what’s not to like?” Harrington added.

IREFAC: No cycle-ender in sight

hotelnewsnow.com Featured Articles - ·9h
Members of the Industry Real Estate Financing Advisory Council said they understand why people are concerned about the length of the current cycle, but there’s no single thing they can point to that might end it.

Joys of being: biz cliches, new taxes and comic heroes

hotelnewsnow.com Featured Articles - ·9h
Hotel News Now needs to cover the entire hotel industry to keep its busy readers apprised of all developments—which this week include babies named after taxes, clichés that litter the conference circuit and superheroes blazing their ways to your city. It is very understandable that with the weight of operating, owning and managing hotels, many important news items will be lost in the mix. Do not fret. Hotel News Now keeps its eyes close to the ground and its ears tuned to pick up signals from around the world.

HSMAI Revenue Optimization Conference 2017

hotelnewsnow.com Featured Articles - ·10h
Complete Hotel News Now coverage of the 2017 HSMAI Revenue Optimization Conference in Toronto.

Micro hotels bring big design ideas into small spaces

hotelnewsnow.com Featured Articles - 21 July 2017
Designing for micro hotels doesn’t mean sacrificing the essentials; rather it means being strategic and making more functional choices, sources said. As the micro-style hotel trend grows, designers at these properties have found effective ways to make them as functional and spacious as the infrastructure will allow. But that doesn’t mean eliminating the essentials, sources said. All of the key elements that consumers want in a hotel should still hold true, even if it’s on a smaller scale, said Bob Kraemer, principal and co-founder of Kraemer Design Group. Identify the essentialsBefore beginning a micro-hotel project, it’s key to identify who is expected to stay at the property, for how long, and the level of service (full or select) that the hotel will offer, said Michael Suomi, principal and interior director of New York-based Stonehill & Taylor. Then comes the brainstorming of clever solutions to problems that might occur with a smaller guestroom.

ALIS update: The reshaping of hotel REITs

hotelnewsnow.com Featured Articles - 21 July 2017
Public-to-public mergers, private equity acquisitions and new entrants into the world of hotel real estate investment trusts are reshaping the landscape, according to panelists who spoke at the recent ALIS summer update in Boston. The world of publicly traded hotel real estate investment trusts could be undergoing a shift, according to REIT executives who spoke at the recent Americas Lodging Investment Summit summer update in Boston. Panelists during the “Capital markets: A focus on REITs” session outlined three factors that could change the landscape: merger and acquisition activity among REITs,

Guest satisfaction will jump when tech is integrated

hotelnewsnow.com Featured Articles - 21 July 2017
2017 was another flat year for results in J.D. Power’s North America Hotel Guest Satisfaction Index Study, but some brands claimed the No. 1 spot in their segment for the first time. J.D. Power’s 2017 North America Hotel Guest Satisfaction Index Study showed slight improvements in guest satisfaction ratings from the previous year, and Rick Garlick, global practice lead of the travel and hospitality group at J.D. Power, said results likely will remain stable over the next few years. “Many of the midscale hotels, even the upper-upscale hotels, they’ve kind of reached a point of saturation where it’s very difficult for them to get any better at this point,” he said. “So in other words, when you look at the quality of the product, the services, the amenities, all those sorts of things, and compare them to a previous era, you can certainly understand why hotel scores have been going higher each year.” He added that guest satisfaction scores seem to be leveling because hotels have reached the best they can currently be, but things will change once the “next big thing” happens.

How 'Star Wars' is pointing to the future of hotels

hotelnewsnow.com Featured Articles - 21 July 2017
The “Star Wars” films might be set a long time ago in a galaxy far, far away, but Disney’s new Star Wars-themed hotel in Orlando, Florida, might indicate what’s in store for the future of the industry. In true Disney fashion, the company’s recent announcement of a new hotel property at its Orlando theme park designed to give guests an immersive experience based on “Star Wars” grabbed a lot of attention in consumer media over the past week. It’s not hard to think of why. The property is as much experimental theater as it is a hotel property—with staff members required to act as characters and each guest given a storyline that is reflected in their interactions around the hotel.

Healthy workplace culture at hotels demands full buy-in

hotelnewsnow.com Featured Articles - 21 July 2017
Hoteliers instrumental in the workplace cultures at their companies and properties said a positive and healthy environment makes for happier employees, which in turn leads to more satisfied guests. The goal of every hotelier, from the front desk to the CEO, is that each guest walks away happy. The key to happy guests is happy employees. But what makes employees happy? A livable wage with benefits and other perks may keep them walking in the door each day, but sources said it’s a healthy workplace culture that makes them want to be there. “It starts with recognizing what a culture is … (in) any organization, whether it’s a business or family unit or any group of individuals that come together for a common cause, in the workplace or anyplace else,” said Fred Cerrone, founder and chairman of Hotel Equities. “You consistently talk about it, (and) recognize it is a living, breathing organization and it needs attention.”

How to handle a hotel liquidation sale

hotelnewsnow.com Featured Articles - 20 July 2017
For hoteliers who need to clear out their old FF&E before an impending renovation, hotel liquidation sales can be the ticket for success. When renovations are on the horizon, hotel owners might find they need a way to clear out their old furniture, fixtures and equipment to make way for the new. Hotel liquidation sales can offer a way to make room and a little extra cash. “Rather than discarding items that could be of use to someone, when possible, it’s a great alternative to execute a liquidation sale of select items with remaining shelf life,” Barry Nidiffer, EVP of development management for Chartres Lodging Group and Kokua Hospitality, said via email. “When done effectively, the liquidation sales can produce proceeds to help fund impending purchases of replacement items for the property.” Sources said hotel liquidation sales can happen in several ways:

Extended-stay F&B offerings help guests stay on track

hotelnewsnow.com Featured Articles - 20 July 2017
Sources from extended-stay brands said their hotels provide simple food-and-beverage options that help guests stick to their normal routines while away from home. For hotel guests who have to be away from home for extended periods, a “home-cooked” meal is sometimes the thing they crave most. That’s why extended-stay brands are exploring different ways to deliver simple and convenient meals to guests on-property.

I have abandonment issues--with loyalty programs

hotelnewsnow.com Featured Articles - 20 July 2017
I belong to every hotel loyalty program out there, and I’ve never—not even once—redeemed a single point. Help me with my issues. I’ve had loyalty on my mind a lot lately, probably because I’ll be moderating a panel on the topic at next month’s Hotel Data Conference. It’s a huge issue for hoteliers, of course, because it’s the ultimate benefit-cost ratio indicator, isn’t it? Is what you pay as an owner or operator in time, investment in the program and little bottles of water to hand out to loyalty members at check-in worth the price of that guest’s loyalty?

How key is it to 'be different' in hotel real estate?

hotelnewsnow.com Featured Articles - 19 July 2017
More so than other commercial real estate asset types, hotels can reap benefits of market differentiation both by superior operations and by the characteristics of their property. Much is known about how to beat the competition through superior operations. Operational managers might dynamically change their differentiation strategy based on changing market conditions. However, it is the real estate component which tends to be an overwhelmingly large part of a hotel’s value. Yet, our knowledge about the pricing impact of real estate differentiation is very limited.

Extended-stay hotels poised for a leap in Europe

hotelnewsnow.com Featured Articles - 19 July 2017
Investor confidence, more transparency and technology, and increasingly educated travelers are adding up to a bright future for the extended-stay/aparthotels segment in Europe, according to CEOs at the Serviced Apartment Summit Europe. Whether this sector’s products should be labeled serviced apartments, extended stay or aparthotels, its leading companies feel the next few years will bring significant growth, perhaps at the expense of traditional hotel companies, sources said at a panel tilted “CEO hard talk: Unlocking the future” at the Serviced Apartment Summit Europe. CEOs from five companies in the segment said technology, investor confidence, social media and increased supply and education will be catalysts for change. Now is the opportunity to make solid leaps, sources said.

Scent branding: Signature fragrances can run afoul

hotelnewsnow.com Featured Articles - 19 July 2017
In the everlasting quest to distinguish one brand from another, scent or aroma branding has proliferated, particularly at the high end of the hospitality industry. Since Wynn pioneered scent branding in casinos, and Starwood popularized it in hotels, it has become harder and harder to find an upscale lodging brand that has not succumbed to the trend. Numerous articles, some in this publication, continue to promote the benefits of signature scents. Proponents have a convincing rationale: Researchers claim that appropriate scents enhance customer experience, evoke comfort and security and incline patrons to spend more. Research has demonstrated that the sense of smell is among the most sensitive of our senses, and is closely linked to our emotional memories.1 In theory, positive associations will flood back to us whenever we smell a pleasant odor, forever associating those memories with a brand.

Hotel execs delve into dramatic rise of soft brands

hotelnewsnow.com Featured Articles - 18 July 2017
Industry leaders at the ALIS Summer Update in Chicago explained how the success of hotel soft brands continues to expand. They expect more growth in the segment as chains, owners and operators seek to provide experiences that lead to consumer loyalty. Hotel executives speaking about the dramatic rise of soft branding in the hotel industry needed to look no further than the hotel in which they were seated to make their cases for forging ahead with plans to grow in the sub-segment. Participating in a panel discussion as part of the ALIS Summer Update event at the LondonHouse Chicago, Curio Collection by Hilton, several industry leaders said they expect the concept to continue to grow as hotel chains, owners and customers look for more flexibility. Scott Berman, panel moderator of PwC, said the number of soft-brand rooms in the U.S. is approaching 50,000.

Wyndham to acquire AmericInn; deal valued at $170m

hotelnewsnow.com Featured Articles - 18 July 2017
Wyndham Hotel Group has a deal in place to acquire the AmericInn brand and its management company, Three Rivers Hospitality, from Northcott Hospitality for $170 million. The transaction is pending and subject to regulatory and government approval. Further cementing its long-standing position as a leader in the midscale hotel segment, Wyndham Hotel Group – the hospitality giant with an unparalleled portfolio of more than 8,000 hotels globally – today announced plans to acquire the Minnesota-based AmericInn® hotel brand and its management company, Three Rivers Hospitality, from Northcott Hospitality for $170 million. AmericInn’s portfolio consists of 200 primarily franchised hotels with approximately 11,600 rooms in 21 states, predominately in the Midwestern U.S., Ohio Valley, and Mountain states including Minnesota, Wisconsin, Iowa, Michigan, and North Dakota. The brand’s U.S. pipeline consists of 23 hotels. Committed to its asset-light strategy, Wyndham Hotel Group will explore options to divest the owned portfolio, which consists of 10 hotels.

Europe extended-stay matures, but more education needed

hotelnewsnow.com Featured Articles - 18 July 2017
The maturation of the extended-stay/serviced-apartment sector is being fueled by new entrants and interest from established hotel companies. But adapting business models and educating both customers and investors are the next steps to propel the segment forward in Europe. Major hotel companies have in recent years wanted to add a serviced-apartment/extended-stay brand to round out their portfolios, sources said, because those brands see more profit generated by longer guest stays. These serviced-apartment brands will do even better with more awareness among guests and investors, sources said during a recent panel at the Serviced Apartment Summit Europe titled “Operations and the value of the brand.”

The growing expense of hotel management fees

hotelnewsnow.com Featured Articles - 18 July 2017
Management and incentive fees have been on the rise since 2010. Here’s how that has affected hotels’ bottom lines during that period. The U.S. hotel industry’s recovery from the depths of the Great Recession was characterized by strong growth in rooms revenue (revenue per available room), concurrent with strict cost controls. This combination resulted in double-digit growth rates for profits1 from 2010 through 2014. Starting in 2015, market conditions changed. The pace of RevPAR growth slowed down, while expenses increased at their highest level of real change in the past 20 years. With RevPAR growth forecast to be somewhat muted for the next few years, the attention of owners and operators has now shifted to controlling expenses. Management fees are an expense that has consistently grown at a pace greater than the average of all other costs from 2010 through 2015. When growth of an expense item exceeds the overall average, owners typically become concerned. However, since management fees are designed to reward operators for positive performance, excessive growth in management fees is not necessarily unwelcome.

Midyear forecast: US hotel industry at tipping point?

hotelnewsnow.com Featured Articles - 18 July 2017
There are signs of both good things and bad to come for the U.S. hotel industry. Here are some trends to keep an eye on. Now in the 87th month of consecutive revenue-per-available-room growth in the U.S. hotel industry, many might be wondering, “Is the end near?” There are still nearly 200,000 rooms under construction, occupancy levels have peaked, and average rate growth is declining, albeit only slightly. The booking window continues to narrow; the dollar remains high, affecting gateway markets; earnings before interest, taxes, depreciation and amortization is harder to grow due to increased wage and related expenses; and Airbnb is reducing peak period compression. Add to that the online travel agency dilemma—in which 15% to 20% of our revenue is eaten up—and outside factors like terrorism and the global economy, and it’s amazing we are doing so well! We must remember that interest rates are low; the recovery from 2010 to 2016 was not particularly robust; and tax reform and repatriation of funds remains available to us, as does both debt and equity. Outside of an external “event,” we seem to have fairly blue skies ahead this year and next. The 1990s brought us 111 straight months of growth. I do believe that we can approach that again.

How sustainability affects recruitment, retention

hotelnewsnow.com Featured Articles - 18 July 2017
While it may not be the top motivator driving employee engagement, sustainability has a clear connection to satisfaction and retention, experts say. Speaking during a roundtable of experts held at the InterContinental New York Barclay, Paul Snyder, VP of corporate responsibility for InterContinental Hotels Group, said he sees a correlation between the two.

Sourcing sustainable supplies grows more feasible

hotelnewsnow.com Featured Articles - 17 July 2017
Sustainability-minded hoteliers and developers once had a tougher time sourcing materials needed for day-to-day operations or construction than they do today. Experts speaking at a roundtable on sustainability efforts held at the InterContinental New York Barclay hotel said prioritizing environmentally friendly materials or items such as cleaning products used to mean sacrificing when it came to pricing or quality. That seems to be no longer the case.

How revenue managers look at cycle dynamics

hotelnewsnow.com Featured Articles - 17 July 2017
With many anxious about approaching the end of a prolonged cycle for the hotel industry, revenue-management experts said that shouldn’t change the way they do their jobs. Cycle dynamics shouldn’t change how a revenue manager approaches operations at a hotel. That was the message from a panel of revenue-management executives who sat down with Hotel News Now during HSMAI’s recent Revenue Optimization Conference. Sources said the discipline didn’t exactly follow that advice in 2009.

HNN's global hotel industry M&A list

hotelnewsnow.com Featured Articles - 17 July 2017
Consolidation has increased across the hotel industry in the past few years, as conditions get better for mergers and acquisitions, and anxiety grows over the state of the hotel cycle and importance of scale. Here is a list of the major industry consolidation from the last two and a half years, along with relevant details about each transaction. The list is organized chronologically by deal announcement date. Please note that not all transactions have been completed and are noted as such. Hotel News Now will continue to update this list as consolidation continues. Did we miss one? Let us know in the comments below.

The value of sustainability

hotelnewsnow.com Featured Articles - 17 July 2017
In a series of articles from an HNN Roundtable, hoteliers discuss how green initiatives boost a hotel’s top and bottom lines. Gone are the days when efforts in environmental sustainability were a luxury for hotel businesses. Increasingly each day, these efforts are tied to a company’s top and bottom lines, the ability to recruit and retain employees and to the sourcing of materials for operations and construction. For that reason, Hotel News Now gathered a panel of experts on all issues related to sustainability at the InterContinental New York Barclay hotel on 7 June 2017. The roundtable, moderated by HNN Editorial Director Jeff Higley, discussed what’s happening in the industry around green initiatives and why they’re becoming important. One of the takeaways from that conversation is that parties interested in seeing environmental efforts at your hotel and properties are broad, including:

Sustainability translates to value for hoteliers

hotelnewsnow.com Featured Articles - 17 July 2017
Environmentally friendly initiatives at hotels aren’t likely to lead to higher pricing opportunities, but they can open up new avenues of business and bring down operating costs. There was once a time when sustainability concerns seemed like a luxury that drew just a sliver of attention from both consumers and businesses alike. That is no longer true, as hotel industry experts speaking at the Hotel News Nows Sustainability Roundtable, sponsored by InterContinental Hotels Group and held at the InterContinental New York Barclay, said it’s now an expectation from guests and business partners alike. “I see (sustainability issues) in more than half of our RFPs,” said Paul Snyder, VP of corporate responsibility for IHG. “Companies are asking those questions. We’re seeing it throughout IHG, and it grows every year.”

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