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1. UK Sets Record for Borrowing
The United Kingdom's Office for National Statistics said government borrowing reached a new record, driven by rising debt interest and energy prices. The ONS said debt in December rose to 27.4 billion pounds sterling ($33.9 billion), the highest since records began in 1993.
The organization added that is 16.7 billion pounds sterling more than it was in December 2021 and 21.1 billion pounds sterling more than it was in December 2019.
2. Fed Expected To Raise Rates by Quarter Point
In light of cooling inflation, officials at the Federal Reserve are expected to raise interest rates by a quarter point at a meeting this week, the New York Times reports. Officials predicted in December they would raise rates to a little more than 5% and hold rates steady.
“They’re going to stay vigilant on inflation — I don’t think they’re going to break out the ‘mission accomplished’ banner just yet,” said Gennadiy Goldberg, a rates strategist at T.D. Securities. “If they don’t send the signal that they really want to get inflation under control, the market could over-interpret that as a signal that they’re done. That’s not the message they want to send.”
3. Costs Continue to Constrain US Hotel Supply Growth
U.S. hoteliers expect supply growth to remain stymied due to the high cost of development and limited availability of capital, reports HNN’s Sean McCracken from the 2023 Americas Lodging Investment Summit.
During the "Boardroom Outlook: Assets — Economic Factors Impacting Hotels,” Greg Juceam, president and CEO of Extended Stay America, said those two factors have been enough to offset the decreasing cost of materials.
"We've started to see a deceleration in the costs and more availability of (material) supply, but it's whack-a-mole because now we have to deal with interest rates where they are," he said. "And that's what drives development."
4. HS2 Fast Train To Service Central London
Chancellor of the Exchequer Jeremy Hunt said the fast-speed rail network under construction in the U.K. known as HS2, or High Speed 2 will service central London, BBC News reports. The announcement came after newspapers speculated the rail service's management would abandon the capital amid rising costs.
The service is being touted as an important part of the government’s Levelling Up policy of redistributing people, revenue and opportunities to other parts of the U.K., and not just to London and the Southeast.
The BBC reported the estimated cost of HS2 is between 72 billion pounds sterling and 98 billion pounds sterling at 2019 prices and that “a budget of 55.7 billion pounds sterling for the whole of HS2 was set in 2015, but this was made before the Leeds leg was cancelled.” It added a “report published last October found it was unlikely that the 40.3 billion pounds sterling target for the first section of the line would be met.”
5. AHLA Appoints RLJ CEO Hale as Chairwoman
The American Hotel & Lodging Association has appointed Leslie Hale, president and CEO of RLJ Lodging Trust, as its chairwoman for 2023. Hale will be assisted for the calendar year by Kevin Jacobs, chief financial officer and president of global development at Hilton, as vice chairman; Michael Deitemeyer, president and CEO of Aimbridge Hospitality, as secretary and treasurer; and Tom Bardenett, chief operating office at RLJ Lodging Trust, who remains as chairman of the AHLA Foundation Board of Trustees.
“AHLA’s executive committee and board have always attracted hospitality’s best and brightest, and I am humbled and honored to be able to lead this amazing group in 2023,” Hale said in the release. “I am excited to build upon AHLA’s strong legacy of success on behalf of our industry and eager to work with my fellow board members to help AHLA accomplish the many important objectives in its strategic plan, including growing the hospitality workforce, achieving advocacy wins and highlighting hotels’ leadership on sustainability and diversity.”