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1. China Struggles With International Investment
Foreign direct investment in China fell almost 20% year over year for the first two months of the year, the Wall Street Journal reports. Chinese officials say the drop is a function of "market behavior and data fluctuations" and not a signal of companies finding the country less attractive.
Data from the country's Ministry of Commerce shows the number of "foreign-funded enterprises" actually increased 34.9% despite the drop in investment volume.
2. Braemar Rejects Activist Investor's Slate of Board Candidates
Hotel real estate investment trust Braemar Hotels & Resorts is formally rejecting a slate of four potential board members put forward by activist investor Blackwells Capital LLC, claiming the nomination of four candidates is "invalid due to numerous deficiencies." Among the issues the company claims is Blackwell not disclosing its intention to buy the REIT "without paying an adequate price" and a failure to follow notice requirements.
A news release notes that Braemar "filed a complaint in the U.S. District Court for the Northern District of Texas in order to prevent Blackwells from moving forward with its illegal proxy contest and continuing its pattern of unlawful actions against the Company and its shareholders."
3. Hotel Owners Face Renovations Reckoning
HNN contributor Danny King reports hotel owners who delayed required renovations since the onset of the COVID-19 pandemic now face pressure from both brands and guests growing tired of worn-out properties as they pay higher rates.
“We’ve done a good job driving rate over the past few years, but to justify that rate, your products have to stay modern and up to speed,” said Pete Sams, chief operating officer at Davidson Hospitality Group. “And if you’re changing your flag, there’s an expectation of elevating your swim lane.”
4. Conversions Remain Big Growth Engine for Brands
A new report from Reuters highlights hotel brands' increasing reliance on conversions for growth, along with an eagerness from former independent hotels to affiliate with brands to boost business.
Experts pointed to difficulties in financing as one reason for the shift, as it's easier today to renovate a hotel than build a new property. And tying into a brand system typically makes the deal more attractive to lenders.
"Good brands, their loyalty program, their reservation system, typically will help a property perform better and so a lender will often have that as a requirement," said Robin Farley, managing director-leisure analyst at UBS.
5. Big Tech Companies Under Widespread Investigation in Europe
Meta, Apple and Alphabet are all targets of a European Union investigation announced today under the new Digital Markets Act, CNBC reports.
“Today, the Commission has opened non-compliance investigations under the Digital Markets Act into Alphabet’s rules on steering in Google Play and self-preferencing on Google Search, Apple’s rules on steering in the App Store and the choice screen for Safari and Meta’s ‘pay or consent model,’” the European Commission said in a statement.
The probes will investigate whether the tech giants are in compliance with DMA legislation, which was designed to ensure more "fair and open digital markets," according to the European Commission.