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1. UK Consumer Spending Falls
The economic picture in the United Kingdom continues to grow more dire, according to the Office for National Statistics. Consumer spending fell 1.4% in September from August and government borrowing reached its second-highest September level on record.
Government borrowing increased to 20 billion pounds sterling ($22.3 billion). The highest level of government borrowing was at the height of the COVID-19 crisis, but the resignation of Prime Minister Liz Truss on Oct. 20 coupled with high inflation — currently 10.1% — and energy costs have seen consumers tighten their wallets.
2. IHG Performance Outgains 2019 Levels
Year-over-year revenue per available room in the Americas for IHG Hotels & Resorts increased by 6.8% and globally by 28% in the third quarter, writes Hotel News Now’s Terence Baker. These increases gave the company much confidence, especially as Chief Financial Officer Paul Edgecliffe-Johnson said IHG is now seeing a definite upward trajectory in booking patterns from business and group travelers.
IHG also announced Edgecliffe-Johnson will leave the company in the early part of 2023 to join sports betting firm Flutter Entertainment as its finance chief. He started at IHG as its senior vice president, head of investor relations, in August 2004.
3. The Group Segments Leading Recovery Across US Hotels
Despite pressures on the hotel industry, U.S. hoteliers remain upbeat about the recovery of group demand, which is essential during the non-peak summer months.
"Corporate is the one that we didn’t necessarily see as being robust, but it’s the No. 1 ... [a] 240% increase in production over the prior year,” said Mark George, senior vice president of sales and marketing at Island Hospitality.
Hannah Huse, vice president of sales and marketing at investment, development and management company Twenty Four Seven Hotels, said she has not seen corporate demand jump noticeably, adding “there's still corporate accounts that are being cautious with business transient.”
4. Caesars Pursues Times Square Hotel-Casino
Owner SL Green Realty Corp. and Caesars Entertainment have announced a partnership to redevelop a major site on New York City’s Broadway, reports CoStar News' Andria Cheng. The redevelopment at 1515 Broadway will include the Caesars Palace Times Square hotel-casino but maintain a theater to remain the long-standing home of popular musical “The Lion King.”
There are no details yet as to room count and building height but did state the proposed hotel-casino “will be 100% privately funded. Caesars will license its brand and manage the operations under a long-term management contract.”
5. THCP Invests $60 Million in Southern French Franchise Hotels
Three Hills Capital Partners has announced it will invest 61.5 million euros ($60.3 million) of preferred capital in Marseille-based Castellet Hospitality, which owns and operates 22 budget and midscale properties in France.
Intended to support Castellet’s buy-and-build strategy, the transaction is a partnership with French family office Sofival and is the first investment from THCP’s fourth fund. THCP says the deal is a “continuation of [our] investment strategy of providing tailored capital solutions to high-quality European midmarket companies led by outstanding entrepreneurs."
Most of the assets are operated under franchises from Accor, B&B Hotels, Louvre Hotel Group and Marriott International.