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As Brexit looms, rising cost of labor worries UK hoteliers

Hotel Management - 19 October 2017
Share Facebook Twitter LinkedIn Email Print In its annual hotel report, Knight Frank warned that cost pressures of labor in British hotels were “set to intensify as the UK renegotiates its relationship with the EU.” An increase in the National Living Wage was expected to combine with the need to pay staff more to attract and retain them, as the UK prime minister attempted to restart stalled talks with the EU.
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Shareholders disagree over Millennium & Copthorne sale

Hotel Management - 19 October 2017
Last week, City Developments, the majority owner of UK hotel group Millennium & Copthorne, made a bid to buy the company, which was valued at £1.8 billion. The firm’s independent directors had agreed to recommend the offer, at 552.5 pence in cash for each share. Not everyone has agreed to the valuation, however: A letter to Millennium’s independent committee of directions from shareholders International Value Advisers and MSD Partners said that the proposal “significantly undervalues” the company. The offer does not reflect a true value of the firm’s assets, the shareholders claimed, and the offer is a 32.5-percent discount on its true value as set out in its accounts rather than its share price.
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Recovering from data breaches an uphill battle for Hyatt Hotels Corporation

Hotel Management - 19 October 2017
The recent revelation of the second Hyatt data breach in the past two years has not only impacted the guests’ personal information, but also affects the loyalty, trust and consumer perception of all Hyatt Hotels Corporation guests — past, present and future. So how can Hyatt and other hotels recover and prove to guests that they are safe and trustworthy?

Marcus & Millichap closes $97.2M in hotel transactions so far this year

Hotel Management - 19 October 2017
Marcus & Millichap, a commercial real estate investment services firm with offices throughout the United States and Canada, announced that Gordon Allred, SVP investments, closed 13 hotel transactions in 11 states totaling more than $97.2 million between Jan. 1 and Sept. 30, 2017. “These hotel transactions are demonstrative of investor demand for limited-service properties, which comprise midscale and upper-midscale brands and accounted for nearly half of all branded hotel deals in 2016," Allred said in a statement. “Limited-service brands continue to be the focus among buyers this year, especially since financing remains accessible to the buyer pool in this segment.” Allred’s team is comprised of 10 hospitality specialists across the country.

Sheraton Los Angeles San Gabriel Hotel creates 'Jetsons'-style experience

Hotel Management - 19 October 2017
The Sheraton Los Angeles San Gabriel Hotel, opening in January, will be the first U.S. hotel to tout eight TUG robots developed by Aethon, a provider of autonomous mobile robots. Aethon’s robots will be introduced at Sheraton’s newest Los Angeles property, located in San Gabriel, 10 miles from downtown Los Angeles. Visitors to the 288-room stylish hotel will be greeted by Aethon’s 4-foot high, friendly-looking innovative TUG robots whether looking for directions to elevators or receiving an in-room delivery.
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4 rules to avoid hotel design disasters

Hotel Management - 18 October 2017
It is a truth that is universally acknowledged: No matter how carefully a designer or hotelier plans, something will go wrong, and the team will need to find a solution—quickly. “Design challenges come with just about anything,” said Tom Cross, hotel manager at the Hapuna Prince Hotel in Waimea, Hawaii. “As much as you try to plan, things happen.” But challenges also give designers and hoteliers opportunities to look like heroes when they solve a problem. Here are some examples.
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Mediterranean mood strong spurred by eurozone growth, continued hotel investment

Hotel Management - 18 October 2017
Many parts of Europe remain volatile as geopolitical matters flare, but in the hospitality investment and development space, especially in the Mediterranean region, sprits are high, buoyed by a propitious global outlook and only moderate setbacks on business from terrorism. At the Mediterranean Resort & Hotel Real Estate Forum, hotel and destination executives convened here at PortAventura to discuss the topics impacting the hospitality industry and explicitly in the Mediterranean region.
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Lenders use variety of factors to determine borrowing power for hotel loans

Hotel Management - 17 October 2017
When hoteliers need loans, lenders look at many different metrics in order to calculate borrowing power. From NCF to NOI, RevPAR and beyond, Mac Dobson, senior vice president of originations at Aries/Conlon Capital, breaks down all the acronyms and terms hoteliers need to know. First, Dobson said hoteliers need to know their numbers upfront so that they or their intermediaries can ensure the accuracy and structure around them and improve results. “Get organized,” he said, adding that hoteliers should gather at least three years’ worth of profit-and-loss statements in Excel as well as a trailing 12-month statement. With those in hand, the following are what lenders look to and hoteliers should know about:
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Middle East hotel pipeline surpasses Africa numbers

Hotel Management - 17 October 2017
According to the latest stats from STR, 164,497 guestrooms in 574 hotel projects are underway in the Middle East, while 55,349 guestrooms in 299 projects under way in Africa. The total number of hotel projects currently underway in the Middle East represents a 3.4-percent increase in guestrooms compared to the numbers from September 2016. Specifically in construction, the Middle East reported 96,694 guestrooms in 302 hotels. Based on number of guestrooms, that is a 15.9-percent increase in year-over-year comparisons.

Global brands set sights on Tunisia

Hotel Management - 17 October 2017
An increase in visitor numbers is attracting investment to Tunisia. At the recent AHIF conference in Kigali, Rwanda, ForwardKeys data revealed a 13.3-percent increase in arrivals to Africa for January to September, compared to the equivalent period last year. Egypt and Tunisia were leading the recovery after the health and security concerns of 2014 to 16 have begun to fade. Among the top 10 destinations, visitor numbers to Morocco and Tunisia were further boosted by visa exemptions for Chinese travelers.

Report shows UK hotels' RevPAR to grow by more than 7 percent in 2017

Hotel Management - 17 October 2017
A greater than anticipated boost in tourism has driven strong trading performance across the UK. According to a recent report from the UK's Knight Frank and HotStats, revenue per available room is forecast to grow by more than 7 percent for the full year 2017, driven by 7 percent average daily rate growth in London and record high occupancy rates in the UK provinces.

Wells Fargo launches Hotel Franchise Finance division

Hotel Management - 17 October 2017
Wells Fargo Corporate Banking, part of Wells Fargo & Company, formed the Hotel Franchise Finance division to provide real estate financing to multiunit owners and operators of franchised hotels in the select-service and extended-stay segments. Leading this new division is Scott Andrews, a 17-year banking veteran of the hotel financing industry. Andrews, based in Scottsdale, Ariz., will report to Nick Cole, head of the restaurant finance and gaming division at Wells Fargo Corporate Banking.

How hoteliers overestimated their 2016 performance

Hotel Management - 16 October 2017
From 2010 through 2015, U.S. hotels enjoyed above long-run average revenue and profit growth. Over the six-year period, total operating revenue increased at a compound annual growth rate of 5.8 percent, while gross operating profits grew at a CAGR of 8.9 percent. Therefore, when U.S. hoteliers sat down in the fall of 2015 to prepare their budgets for 2016, it is no surprise that they believed the strong upward momentum in revenue and profit growth would continue.

7 secrets behind managing supply chain costs

Hotel Management - 16 October 2017
In the hospitality industry, balancing priorities such as guest satisfaction with costs is constantly top-of-mind. Whether you’re responsible for the overall purchasing strategy of a large multiunit organization or the day-to-day buying decisions of a restaurant, you can continuously challenge yourself to do more to lower costs and increase the bottom line while still providing quality products your guests will love. Here are seven secrets to managing costs in your supply chain. These methods are effective and straightforward. The key is checking in on each of them, staying current on market prices and following up with your teams to ensure implementation and coordination—that’s what will enable you to save money.
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Marriott development exec convinced company will have more brands by next year

Hotel Management - 16 October 2017
The value and ROI brands deliver to hotel owners have become more arguable as technology and distribution platforms prove ever more to even the field for those properties absent a flag. But in an age where hotel companies are valued expressly by their ability to expand and grow their brands, losing ground is not an option. This was bandied during the panel, "The Big Debate: To Brand Or Not To Brand", during The Annual Hotel Conference here at the Hilton Deansgate.

Despite economic challenges, investors see opportunity in Africa's hotel sector

Hotel Management - 13 October 2017
High demand growth, the arrival of new global brands and increasing supply in major markets has driven sub-Saharan Africa's hotel sector over the past decade, according to a new report from JLL. “This evolution is resulting in increasingly experienced investors developing products that are better suited to address demand, which is providing a clear shift in focus to the domestically driven midscale and budget segments,” Xander Nijnens, EVP of the hotels & hospitality group at JLL Sub-Saharan Africa, said in a statement.

Marriott launches food-and-beverage loyalty program

Hotel Management - 13 October 2017
The concept of loyalty is endlessly debated, studied and evaluated—after all, everyone knows it is cheaper to retain a guest you already have than it is to convince a new one to stay at your hotel. Hotel companies have stepped up to the challenge by offering loyalty programs, which offer a variety of perks to keep guests coming back over and over again. Millions of travelers belong to these programs (Hilton Honors has more than 50 million members alone). According to the “2016 Bond Loyalty Report,” loyalty programs are a valuable step to creating the loyalty that hoteliers are seeking.

At AHC, pall of Brexit a thorn in hotel operators' sides

Hotel Management - 12 October 2017
The Brexit has been anything but a smooth process. With the UK set to leave the European Union in March 2019, questions remain and progress has been slow. No where is this more evident than with regard to labor—it's movement and cost. This was one of the themes of discussion at The Annual Hotel Conference, which drew an audience of more than 800 delegates here at the Hilton Deansgate. Nicholas Northam, managing director of Interstate Hotels and Resorts in the UK, called Brexit "a double-edged sword," where the devaluation of the pound has helped spur more international travel, but has led to both labor and product supply issues. (Trevor Williams of TW Consultancy made the case that travel is one industry that has benefitted from Brexit.) He cited "the people from Eastern Europe whom we relied on"… "now we are starting to hear stories from housekeeping provider outsourcers of the real challenge encouraging people to come and work here."
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Why Greece needs new hotel investment now

Hotel Management - 11 October 2017
Dr. Angela Michalopoulou, director general for investments at Enterprise Greece, will host a regional round table on the Greek hospitality industry at the Mediterranean Resort & Hotel Real Estate Forum in Tarragona, Spain, Oct. 16-18. Michalopoulou’s session will take place on Wednesday, October 18. Ahead of MR&H, Michalopoulou spoke with HOTEL MANAGEMENT about how Greece's hospitality sector is growing, who is investing and what the future of Greek hotels will look like.
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5 ways to be a better revenue manager

Hotel Management - 10 October 2017
Revenue management is an art, and like all art it’s a constantly evolving process that can never be mastered. In this area of ever-changing elements, such as customer behavior trends and the continual march of technological advances, even the most experienced revenue manager must keep learning. “Revenue management is moving target,” said Don Urbahn, VP of revenue management with New Castle Hotels & Resorts. But there are ways to ensure the revenue manager at your hotel is doing the best work possible, all the time.

Why investors are eyeing serviced apartments in Germany

Hotel Management - 10 October 2017
As consumers look for a cheaper alternative to hotels, investors are expressing increased interest in the serviced apartment sector in Germany. The global operators are now looking to expand their apartment brands in the country, as the concept is set to grow by 40 percent by 2019. According to a study from Horwath HTL, the demand for temporary living was “constantly increasing as the working environment changes and the number of permanent commuters spending the work-week away from home grows.”
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Energize telephone hold times to improve the guest experience

Hotel Management - 10 October 2017
Did you know half of American consumers prefer to receive information over the phone rather than online? The hotel industry is in the midst of a digital revolution, whereby the process of researching and booking a hotel has become largely an instant online process. However, there may be times when information about the hotel isn’t online and customers need to speak to someone directly. As a result, it is important not to forget about the telephone as a vital method of communication between the business and its customers. But what happens if the call is handled poorly?
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Nonrecourse hotel loans entail less risk, more benefits

Hotel Management - 10 October 2017
Lenders provide many options for financing in the hotel industry, but finding the right debt for an asset can sometimes be a daunting experience, especially if hoteliers aren’t aware of the alternatives. While traditional recourse loans are an option for financing, Mac Dobson, SVP of originations for Aries/Conlon Capital, said they aren’t without their limitations. For instance, the borrower must personally guarantee the loan, which means both personal wealth and the property are on the hook if there is a default. Then, if there is a foreclosure with a shortfall after the sale, the borrower is on the hook for that amount.
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Hotel demand may not meet supply in Africa

Hotel Management - 9 October 2017
Encouraged by a more lenient visa regime in Africa that is driving visitor numbers, global hotel companies like Hyatt and Hilton are investing in new developments and conversions across the continent. But in Morocco, some insiders are raising concerns that demand will not meet supply. Hyatt has announced plans to add another hotel to its estate in Morocco in early 2019. The 120-guestroom Park Hyatt Marrakech will be the third Hyatt-branded property in Morocco, and one of six the company is planning to open in Africa.

The hotel industry's next round of disruptors is here

Hotel Management - 9 October 2017
Sometimes it’s a good idea to stir the pot. Throughout most of history the hospitality industry was separated into two segments: hotels and motels. But one day in 1952, Kemmons Wilson opened the first Holiday Inn, creating the first midpriced hotel concept available to travelers and, possibly, the industry’s first true disruptor. Like all good disruptors, Holiday Inn was embraced by consumers and criticized by competitors, but the industry wasn’t felled by this new segment. Instead, hospitality evolved around Holiday Inn, opening it up to more concepts than ever before.
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Africa's growing hotel industry sees mixed performance in August 2017

Hotel Management - 9 October 2017
Based on August 2017 data from STR, Africa's hotel pipeline has 301 projects in development, accounting for 57,011 guestrooms, or 11 percent of the continent’s existing room supply. But while the pipelines may be steady, the continent's hotels are reporting mixed performance results so far. Although rates are up in local currencies of several countries, including Egypt, Morocco, and South Africa, exchange rates must be considered to see the full picture. Meanwhile, other markets are already seeing drops in performance due to growing room stock, including Nigeria, Ethiopia and Algeria.

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