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1. Braemar starts sales process
The board of directors for hotel real estate investment trust Braemar Hotels & Resorts has started the process to sell the company, reports CoStar News Hotels' Sean McCracken. The REIT's portfolio includes nine resorts and five urban properties, most of which operate in the luxury segment under brands including Ritz-Carlton Reserve, Four Seasons and Park Hyatt.
Braemar's external adviser, Ashford Inc., has agreed to accept a $480 million termination fee to end its advisory agreement.
Braemar's executives have repeatedly said the REIT's stock price was disconnected from the internally calculated net asset value. As of press time, the company's stock was trading at $3.04 a share, resulting in a market cap of $208.1 million. It is currently under contract to sell The Clancy in San Francisco for $115 million and completed the $145 million sale of the Marriott Seattle Waterfront earlier this month.
2. Hawaiian hotel workers win tipping lawsuit
A group of more than 100 hotel workers in Hawaii has won its class-action lawsuit about improperly paid tips, Aloha State Daily reports. The group sued the Mauna Kea Resort, Hawai‘i Prince Hotel Waikīkī and Prince Resorts Hawai‘i in December 2016, alleging the employer's tipping practice violated state law over unfair and deceptive business practices.
The state's supreme court sided with the plaintiffs, noting that the state law requires hotels and restaurants that impose a service fee on food and beverages must either distribute 100% of that fee to employees as tips or clearly disclose how much goes to other expenses.
“Does a portion of the service charge mean nearly all of it?” Hawaii Supreme Court Associate Justice Todd Eddins wrote. “Or almost none of it? Does ‘a portion’ [allocated] to ‘tips or wages’ mean that none of the service charge is allocated to tip income? Or does it mean that nearly all of it is? It’s any consumer’s guess.”
3. Host exec talks hotel hurricane resiliency
In a podcast interview with CoStar News Hotels' Natalie Harms, Host Hotels & Resorts Head of Sustainability and Resilience Michael Chang explained how the hotel REIT evaluates climate risks and invests in its properties to prevent and mitigate damage.
"Owning these hotels in highly desirable but climate vulnerable destinations really requires a sophisticated and nuanced approach to risk management," he said. "At Host, we don't view these locations as liabilities, but as strategic assets, requiring diligent forward-looking stewardship."
4. Trump puts 50% tariff on India into effect
U.S. President Donald Trump has put into effect the 50% tariff on goods imported from India as a punishment for India continuing to buy Russian oil, the New York Times reports. India now sits with Brazil as the only two countries under U.S. tariffs of 50%.
"The move could rupture America’s expanding economic relationship with India, where two-thirds of the largest U.S. corporations have offshore operations. The tariff also undermines the stability of billions of dollars of foreign investment in India’s stock market, the world’s fourth-largest," according to the newspaper.
In related tariff news, the Associated Press reports that an executive order that eliminates a customs exemption for international shipments valued at $800 or less starts Friday. In the past, these shipments did not need to clear customs, but now they'll have to go through vetting. As a result, many countries' postal services have said they will temporarily halt sending some or most packages to the U.S. to figure out the new processing and payment requirements.
5. US consumer confidence dips in August
The Conference Board's consumer confidence index fell by 1.3 points to 97.4 in August over ongoing concerns about a weakening job market, according to a news release. Consumer's short-term outlook for income, business and labor market conditions also dipped by 1.2 points to 74.8.
“The present situation and the expectation components both weakened," said Stephanie Guichard, senior economist of global indicators at The Conference Board. Notably, consumers’ appraisal of current job availability declined for the eighth consecutive month, but stronger views of current business conditions mitigated the retreat in the Present Situation Index. Meanwhile, pessimism about future job availability inched up and optimism about future income faded slightly. However, these were partly offset by stronger expectations for future business conditions.”