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1. Korean inflation drop points to Western democracy interest-rate cuts
Inflation in South Korea fell from 2.6% to 2% in August, its lowest level for 41 months. The Bank of Korea has maintained interest rates at 3.5% but it is signaling that a drop in the country’s base rate could happen soon, according to the Wall Street Journal.
Most Western countries are considering interest rate cuts. The Journal reported on Aug. 30 that the latest U.S. inflation data “supports forecasts of moderate, rather than rushed, interest rate cuts starting next month” and reported on Aug. 29 that “German inflation sank more than expected this month to below the European Central Bank’s target, sharply raising the prospect that it will cut its key interest rate at the next meeting in September.”
2. Dutch lender criticizes government’s hotel VAT move
Dutch bank ABN Amro has criticized the Netherlands government’s plan to raise value-added sales tax on hotel stays from 9% to 21%. The bank claims the move will not raise the additional tax revenue, according to a report in the NL Times.
The newspaper added the Dutch government has forecast the increase will generate an additional €1.2 billion ($1.33 billion), including €910 million from hotels and guesthouses and €302 million from other accommodation options. But the bank said “almost half of hotel guests (40%) are business travelers whose companies can reclaim the VAT. Another 36% of hotel turnover comes from the sale of food and drinks and 6% from additional services such as the rent of conference rooms, bicycles and parking spaces. These are turnover categories that are not or hardly affected by the VAT increase.”
3. Macau sees bookings boost for October’s Golden Week
Hotel executives in Macau are seeing positive signs of bookings a month before the start of the country’s National Day Golden Week, which runs Oct. 1-7 and involves millions of travelers.
According to the Macao News, 82% of Macau’s hotel rooms have been booked for the week. Golden Week starts after China’s National Day on Oct. 1. Hong Kong business consultancy CLSA added that “investor concerns [in Macau] over the [Chinese] government’s crackdown on illicit money exchanges happening at casinos were ‘likely overdone,’ noting that August’s solid haul of gross gaming revenue was a positive sign for the gaming industry.”
4. PPHE refinances loan on seven European hotels
Amsterdam-based owner, operator and developer PPHE Hotel Group has refinanced its existing loan with Aereal Bank AG for seven of its owned hotels, including six in the Netherlands and one in London. The loan is divided into two parts: a €160 million tranche that will have a fixed interest rate of 2.765% until June 2026 and a 4.49% fixed interest rate thereafter and until maturity in June 2031; and a £16 million ($21 million) tranche that will have an initial interest rate of 3.9% and then a “competitive floating interest rate.”
Daniel Kos, PPHE’s chief financial officer, said that the “new facility continues our strong relationship with an existing lender. … It also further confirms the group’s attractive and stable asset base in key city-center locations, enabling [PPHE] to secure long-term financing on attractive rates, particularly in current market conditions.”
5. FDC becomes first Greater China hotel firm to test four-day workweek
Taiwan’s FDC International Hotels Corp. will become the first hotel firm in the Greater China region to test a four-day workweek. FDC Chair Chih Jen Sheng said that “three days off every week can improve employees’ job satisfaction and enhance overall work efficiency and creativity,” according to Focus Taiwan.
FDC is rolling out the four-day workweek at its Fleur de Chine Hotel at popular Taiwanese tourism destination Sun Moon Lake. The official policy is that those employees not opting into the scheme will receive overtime pay for extra hours, but it's unclear what will happen with average salaries or pay rates. Hotel News Now’s Bryan Wroten delved into what a four-day work week might mean for the industry back in March 2023.