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1. US, UK Interest Rates Rise Again
The U.S. Federal Reserve's decision to raise interest rates by 75 basis points for a third time takes the central bank's benchmark lending rate to a new target range of 3% to 3.25%, the highest its been since the Great Recession in 2008, CNN Business reports. Meanwhile, the Bank of England announced today its seventh interest rate hike in less than a year, taking rates up half a percentage point to 2.25%, the news outlet reports.
In the U.S., the "supersized" rate hike is expected to drive up "the cost of borrowing for things like homes, cars and credit cards," CNN reports, and raises the risk of a recession, CoStar analyst Christine Cooper writes.
The U.K. is already in a recession, according to some economists, "and the Bank of England shared that view," CNN reports. "It forecast U.K. GDP to decline by 0.1% in the third quarter, partly as a result of the extra public holiday for the Queen’s funeral. GDP fell by that much in the second quarter."
2. Treehouse Hotel Set for Silicon Valley
Treehouse Hotels, a brand founded by Starwood Capital affiliate SH Hotels & Resorts, announced its first hotel in the U.S. will open in Silicon Valley's Sunnyvale neighborhood in California, according to a news release.
The brand opened its first hotel in 2019 in London, converting the former St. George's Hotel. It also has hotels in development in Miami and Manchester, England, Hotel News Now's Terence Baker reported in June.
The Silicon Valley project will convert a Sheraton Hotel and feature 254 rooms — 142 of which will be in a repurposed new-build, six-story building nearby, Hoodline San Jose reports.
Barry Sternlicht, CEO of SH Hotels & Resorts, said in the news release, "Sunnyvale is the epicenter of the bold ideas, disruptive technology, imagination and innovation that make Silicon Valley an icon and inspiration for the world. Every inch of this playful property, from mismatched materials to secret nooks and unexpected artwork, creatively combines the energy and intensity of Silicon Valley's high-tech culture with the simpler, older, more natural charms of the Santa Clara Valley's pre-internet era."
3. Bitter Realities at Lodging Conference
Hoteliers on stage at The Lodging Conference have mixed some cautious optimism with the bitter realities of a slowing U.S. economy and a slower-than-expected rebound in business travel demand, Hotel News Now's Sean McCracken reports from Phoenix.
On the first day of the conference, Aimbridge President and CEO Michael Deitemeyer said expectations for a pickup in business travel post-Labor Day so far have not panned out, but he is "cautiously optimistic" continued demand from leisure travelers will help carry the industry over the hump.
On day two, First Hospitality President and CEO David Duncan said that while the U.S. "technically" is already in a recession, he doesn't think "it feels like it to the vast majority of people in the U.S.," and ultimately consumer sentiment is what counts, particularly for the hospitality industry.
4. Weekly US Hotel Performance Improves
U.S. hotel performance improved week to week, bucking a recent downward trend typical for this time of year, according to the latest weekly data from CoStar hospitality analytics firm STR.
Comparisons with the same week in 2019 were also mostly favorable, with revenue per available room up 12.9% and average daily rate up 15.6% for the week ending Sept. 17, the data shows.
Due to a seasonal slowdown that's typical for the transition from summer to fall, U.S. hotel demand and performance metrics have been falling week to week. For the week ending Sept. 10, for example, ADR was down 0.5% and RevPAR was down 2.3% from the previous week.
5. Kempinski Group Reports ESG Progress
European luxury hotel firm Kempinski Group has set a standard for disclosing metrics on environmental, social and governance by issuing its first comprehensive ESG Report for 2021.
"The principals of sustainability have a long tradition at Kempinski Hotels," the company said in its report. "Though tradition is an important part of what sets us apart as Europe’s oldest luxury hotel group, Kempinski maintains a keen eye for the future. When it comes to sustainability, that means embedding the principles of ESG into our annual reporting."
The company has 24 hotels and residences among its 80 properties in 34 countries, as well as 26 properties in development. As of the publication of the report, it employed 19,604 staff.
In this first report, the company stated that it has reduced food waste on average by 68%, saved $63,000 in average annualized food costs per property, and eliminated an average of 65,000 kilograms in carbon emissions monthly per property.