Last week, Cuba and the U.S. agreed to open up direct commercial flights between the two countries for the first time since the 1950s. Under the new rules, there could be up to 110 regularly scheduled flights between Cuba and the U.S. per day, many times more than the handful of charter flights that go there now. Considering the state of Cuba’s infrastructure, the real number will likely be much lower, however. Besides the long neglected roads, plumbing, cell network, and Internet issues presenting roadblocks, Cuba’s government is moving slowly when responding to business overtures from U.S. companies for fear that the new era of openness between the two countries will be reversed if a Republican takes the White House this year. Read more here.
Investors are paying extra close attention to the Federal Reserve this week in anticipation of the U.S. central bank’s next move. Data released Friday showed the core consumer price index (CPI)—a measure of underlying U.S. inflation—rose to a 2.2 percent annualized rate in January, the highest in nearly four-and-a-half years, according to Reuters. The number was above the Fed’s 2 percent target. While market participants initially came into 2016 anticipating three or four interest rate hikes through the year, their sentiments had shifted in light of weak inflation and global volatility. Earlier this month, investors were viewing the Fed as unlikely to raise rates in March and possibly not even for the rest of the year. Now, the stronger-than-anticipated CPI is shifting the market’s expectations again. Shortly after the data came out, the dollar rose alongside Treasury yields. Personal consumption expenditures being released this Friday could confirm or outweigh the trend in the CPI reading, the article states. To read more, click here.
Starwood Hotels & Resorts Worldwide is reportedly considering the sale of properties that include the St. Regis New York. This is part of the company’s plan to find buyers this year for its remaining hotels, valued at $1 billion, reports Bloomberg. Starwood is preparing to merge with Marriott International by the middle of the year. The company is focusing on selling North American and European properties, but is struggling to sell Latin American hotels due to the area’s volatile economy. To read more, click here.
What a difference a few months makes. Throughout the mixed bag of hotel company earnings calls this week, one thing was clear—the outlook for 2016 is a lot more complicated than it was at the end of last year. Starwood Hotels cut its 2016 system-wide RevPAR growth forecast to 2 to 4 percent in constant dollars, from the 4 to 6 percent the company had previously predicted. For its part, Marriott revised its RevPAR forecast for North America from 4 to 6 percent to 3 to 5 percent. This is in line with the RevPAR forecasts offered by Choice Hotels (3.75 to 4.75 percent in North America), Hyatt Hotels (3 to 5 percent system-wide), and Wyndham Hotel Group (3 to 5 percent in North America) during their earnings calls. While there are many factors playing into these forecasts, Marriott said it expected group business to remain strong while transient business grows at a slower rate. To learn more, click here.
La Quinta didn’t have to look far for its new chief executive. The company today announced it has appointed Keith Cline to serve as president and CEO, effective immediately. In addition, Jim Forson has been named the company’s EVP and CFO. Both leaders had been serving in their respective roles on an interim basis, ever since former CEO Wayne Goldberg suddenly stepped down last September after almost nine years on the job. Cline joined La Quinta in January 2013 as EVP and CFO, where he helped to lead the company through its initial public offering. Forson previously served as La Quinta’s SVP and chief accounting officer. To read more, click here.
Allegheny County, Pa., is aiming to strengthen the county’s hotel tax law to ensure short-term rentals like Airbnb are being taxed appropriately. Notably, the new regulations would be in place to collect taxes on spaces rented for the U.S. Open at Oakmont Country Club this summer. Homes near the course are listed on Airbnb for as much as $3,000 per night. Right now, Allegheny County imposes a 7 percent tax on hotel rooms, but has not yet been successful in enforcing it for short-term rentals. To read more, click here.