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1. Fed Likely To Stand Pat on Interest Rates
As the U.S. Federal Reserve wraps up its two-day policy meeting today, the Wall Street Journal reports signs are pointing to no change in interest rates. The Fed will likely leave the door open for future increases if inflation remains elevated.
Benchmark rates are already at a 22-year high.
"The Fed’s anticipated decision would mark the second consecutive meeting in which it hasn’t raised rates, underscoring its wait-and-see stance in the inflation fight," the newspaper reports. "Officials have raised rates since March 2022 at the fastest pace in four decades. Their most recent increase, in July, brought the benchmark federal-funds rate to a range between 5.25% and 5.5%."
The Fed is expected to make a statement at 2 p.m. ET.
2. Why Youth Hostels Are Booming in China
While youth hostels are often thought of as travel accommodations, occupancy for them in China is getting a boost for a different reason: high unemployment among young people. The New York Times reports hostels have been the surprise beneficiaries of high unemployment among younger demographics in major cities.
"As joblessness among young Chinese has reached record highs, hostels have become refuges for young people trying their fortunes in major cities, who need a place to crash between back-to-back interviews, to strategize on their next networking meeting or to fire off yet another résumé," the newspaper reports. "They have become concentrated hubs for people’s anxiety, hopes, despair and ambitions, all packed into bunk beds that go for a few dollars a night."
3. New Joint-Employer Ruling Will Affect Hotels
In the latest episode of the Hotel News Now podcast, HNN's Bryan Wroten dives into how the regulatory back-and-forth over joint-employer status since a 2015 National Labor Relations Board decision redefined the dynamic.
"We actually are referring to it as a bit of a whiplash effect given all the changes that have occurred in this area over the past few decades, and really over the past few years with the change in the most recent administration," said Andria Ryan, partner at Fisher Phillips and co-chair of the law firm's hospitality group.
4. Boston Park Plaza Deal Closes
Mexico City-based Parks Hospitality Holdings has closed on the Boston Park Plaza with plans to convert to the Hilton Boston Park Plaza, HNN's Stephanie Ricca reports.
"Acquiring the celebrated Boston Park Plaza is a significant milestone for Parks Hospitality Holdings," said CEO Charles El-Mann Fasja in a statement. "This addition to our irreplaceable hotel real estate portfolio marks a new era of expansion for PHH, bringing our expertise in hospitality development and investment from Mexico to locations across the U.S."
The $370 million deal comes in at a 12.1-times multiple on hotel adjusted earnings before interest, taxes, depreciation and amortization for real estate, and a 7.1% cap rate on net operating income for the four quarters ending June 30.
5. DiamondRock Reports Flat Revenue for Third Quarter
DiamondRock Hospitality, in earnings results for the third quarter, posted total revenues that were virtually flat year over year.
The Bethesda, Maryland-based real estate investment trust achieved total third-quarter revenues of $277.1 million, up just 0.1% from 2022 but 12% higher than 2019. Revenue per available room was down 1.1% year over year to $210.03.