The U.S. hotel industry’s occupancy remained nearly flat in STR’s latest year-over-year results for January 2016, holding steady at 54 percent. However, the industry experienced slight growth: Average daily rate for January was up 2.8 percent, while revenue per available room (RevPAR) grew 2.4 percent. Experts note this was the lowest January RevPAR performance since 2010, and occupancy declined for the third time in the last 72 months. Despite the lack of strong growth last month, RevPAR has increased in year-over-year comparisons for 71 consecutive months. To read more, click here.
The American Hotel & Lodging Association is urging for legislation to take action against fraudulent online booking sites it claims are conning travelers into purchasing hotel rooms with no actual relation to the hotels. These scams cost travelers up to $1.3 billion a year, the group says. Online travel sites have voiced their objections, arguing that the hotel industry is exaggerating the issue in an attempt to convince travelers to book directly so hotels can evade the cost of sales commissions to online booking sites. Read more here.
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.