HotelNewsNow.com each week features a news roundup from a different region of the world. Today’s review covers the Americas.
Americas development pipeline spotty
The hotel development pipeline in the Americas region is spotty, with construction down considerably in the United States but other regions in South America blossoming.
The total active U.S. hotel development pipeline comprises 2,951 projects totaling 315,668 rooms, according to the August 2011 STR/McGraw Hill Construction Dodge Pipeline Report. This represents a 12.4% decrease in the number of rooms in the total active pipeline compared to August 2010.
Among the U.S. regions, three reported an increase of 20% or more in rooms under construction: Pacific (+38.9% with 4,260 rooms); East South Central (+32.2% with 3,611 rooms); and West North Central (+31.5% with 3,418 rooms).
The Caribbean/Mexico hotel development pipeline comprises 129 hotels totaling 18,994 rooms, according to the August 2011 STR Construction Pipeline Report.
As of 31 July, the region opened 10 projects with 928 rooms in 2011. There are 26 more projects comprising 4,104 rooms expected to open during 2011. In 2012, there are 46 projects with 6,482 rooms scheduled to open. The upscale segment (seven projects with 1,453 rooms) is expecting the largest number of rooms to open during the remainder of 2011.
The Central/South America hotel development pipeline comprises 172 hotels totaling 27,728 rooms, according to the August 2011 STR Global Construction Pipeline Report.
Again, the upscale segment in this region reported the largest portion of rooms in the total active pipeline with 6,984 rooms.
U.S. cities split on OTA tax collection
Whether municipalities should collect taxes on the retail rate or the wholesale rate when an online travel agent sells a hotel room is a continuing debate with different cities across the United States falling on different sides of the fence.
It is estimated there are 50 lawsuits pending between a city and at least one OTA attempting to decide the issue. Recent rulings have come down in favor of both sides: In Texas in July a judge ordered several OTAs and a collection of cities to determine what back-taxes were owed and begin collecting on the retail rate, but in San Diego last week a judge overturned a similar ruling and OTAs will continue to pay taxes on the wholesale rate negotiated with hotels.
The crux of the issue is between local municipalities and online travel agencies (also known as online travel companies, or OTCs) and, until recently, hoteliers didn’t have a dog in the fight. But experts continue to stress that as cities see dwindling tax revenues—much of which is used to fund local convention and visitors bureaus—they will look to hotels to make up the difference.
Is that a realistic fear? Shawn McBurney, a representative from the American Hotel & Lodging Association who has been leading the charge on the issue, said yes.
• Read “Cities still split on OTA tax issue.”
Hurricane Irene leaves lasting effect on hotels
Hurricane Irene churned north along the Atlantic seaboard during the weekend of 27-28 August, wreaking havoc from North Carolina to New York. Though the damage was less than expected, millions of people were affected by the storm—as were thousands of hotels.
To track the impact of Irene on hotels in the days leading up to the storm and during that weekend, STR Analytics, sister company of HotelNewsNow.com, used a map provided by the National Oceanic and Atmospheric Administration to approximate the completed path of the hurricane. The path used included not only the areas affected by hurricane-force conditions but also those that were subject to tropical storm conditions.
HotelNewsNow.com’s coverage of Hurricane Irene's effects on the East Coast hotel landscape follows:
• Tracking Irene's impact on hotel performance
• East Coast hotels see performance impact
• Price gouging after a disaster
• Irene: Hotel guests flee North Carolina coast
• Hurricane Irene: Atlantis reports ‘minimal’ impact
• East Coast hoteliers seek normalcy after Irene
Americas Ad Will Appear Here
Caribbean seeing more visitors, less spending
Although increases in visitor arrivals to the Caribbean have been posted region-wide (23.1 million stay-overs last year) and the luxury market remains a reliable source of business, per-visitor expenditures are down and booking windows are shorter as a result of the lingering effects of the global economic downtown, panelists said during the Caribbean State of the Industry Conference last week.
“The modern visitor is a discriminating traveler who seeks our islands beyond just the hotels, but expects at least that hotel services are up to international standard,” said Ricky Skerritt, minister of tourism for St. Kitts & Nevis and chairman of the Caribbean Tourism Organization. “The challenge is not only to attract the potential traveler to the Caribbean, but also to deliver a world-class product."
With enthusiasm for the region and a sharp eye for the reality of the marketplace, Hugh Riley, secretary general of the CTO, stressed the importance of maximizing the opportunities that can offset a worldwide uncertain economy.
“We want to come out of this conference with some answers as to what’s next, how to spot the opportunities to move forward and how to beat this recession,” he said. “The tourism business is fiercely competitive, and the Caribbean has to win.”
• Read “Caribbean: Visitors up, but expenditures weaken.”
IAHI: Hotels performing better than last year
The IAHI, The Owners’ Association for InterContinental Hotels Group hotels worldwide, last week announced results of its annual 2011 membership survey. Key findings reveal owners’ optimism that their hotels are performing better than last year. Notably, a majority of respondents are very satisfied or satisfied with early results of the recently completed Holiday Inn relaunch.
Highlights of additional findings from this year’s survey include:
• Having worked through economic and lending challenges, owners are more focused on existing asset and portfolio growth in 2011 than on debt service, which they indicated was their primary focus in last year’s survey.
• Members are enthusiastic about employing green practices to manage their carbon footprint by implementing the IAHI-supported ‘Green Engage’ 2.0 resource offered by IHG.
• Although 80% of owners are challenged with revenue growth, they believe financial performance will return to prerecession levels in the next two years; nearly half of respondents are well on their way to recovery. (Note: The survey was distributed and completed prior to the U.S. downgrade by Standard & Poor’s and resulting market turbulence.)
Kimpton raising another acquisition fund
Kimpton Hotels and Restaurants will raise another US$200-million acquisition fund this fall, according to the San Francisco Business Times. It will be the third such fund the hotel company has raised from college endowments.
Kimpton’s previous fund, the US$202-million Kimpton Hospitality Partners II equity fund raised in April 2008, sat quietly for more than two years while the worst of the recession raged. Kimpton started spending it in October 2010 and has about US$70 million of it left to spend.
Hilton aggressive in Mexico, Latin America
Hilton Worldwide continues its aggressive development in Mexico and Latin America with the opening of the Hilton Garden Inn Tuxtla Gutierrez in Chiapas, Mexico, and a franchise development agreement with Grupo Hotelero Santa Fe for the first Hilton Hotels & Resorts property in Puerto Vallarta, according to separate news releases.
Located in the capital city of the state of Chiapas, the Hilton Garden Inn Tuxtla Gutierrez features 167 guestrooms. The hotel is strategically located 35 minutes from the airport.
“We are delighted to bring another hotel to Mexico,” said Danny Hughes, senior VP, Caribbean, Mexico and Latin America for Hilton. “We have several projects under development in the country, and this latest addition in Chiapas supports our strategy to grow our portfolio in Mexico and throughout the rest of Latin America.”
The Hilton Hotels & Resorts property in Puerto Vallarta is scheduled to open during the second quarter of 2012. It will feature 259 luxury rooms, executive and honeymoon suites and views of the mountains and the Banderas Bay.
Hilton has a portfolio of more than 20 hotels and resorts open and welcoming travelers in Mexico. The company has eight hotels under development throughout the country and continues to actively pursue additional growth opportunities in Mexico.
Key openings, deals
• Westin Hotels has opened its 10th hotel in Latin America, The Westin Guadalajara, owned by Heldan Hotels & Resorts and featuring 221 guestrooms.
• The 40-room Atlantique View Resort & Spa on the nature island of Dominica, soon to be finished, will become a member of Choice Hotels International’s Ascend Collection. The hotel will open this fall.
• Brazil Hospitality Group acquired the 388-room Hotel Rio Palace in Rio de Janeiro. The acquisition marks the end of BHG’s negotiations with Veplan Hotels & Tourism, a company in bankruptcy, according to hotelmanagement-network.com.
• Chesapeake Lodging Trust bought the 613-room Denver Marriott City Center for US$119 million, or US$194,000 per room, from WTCC City Center Investors.
• Joseph Chetrit bought the 250-room Hotel Chelsea New York for US$77.82 million, or US$311,266 per key, from Natixis Real Estate Capital LLC.
• The Embassy Suites St. Louis-Downtown opened in August as an adaptive reuse project.
• PHD Hospitality manages the Hilton Garden Inn in Rapid City, South Dakota, which opened in August.
• Hotel Red, a 48-room boutique property in Madison, Wisconsin, opened in August.
Compiled by Jason Q. Freed.