Global hotel roundup
(WHITE PLAINS, NY) - After third-quarter profit fell 65 percent, Starwood Hotels & Resorts Worldwide plans to sell its Bliss spa unit for $100 million to Steiner Leisure Ltd., a 75-year-old, Nassau, Bahamas-based company that sells spa services and products to cruise lines and resort customers worldwide.
The transaction will add $125 million in asset sales to Starwood's ledger, the White Plains, NY-based lodging company said in a prepared statement. Starwood also is cutting its annual dividend by 78 percent, to 20 cents a share from 90 cents in 2008. The common stock is trading in the $27 to $28 range.
"We are having a hard look at assets that are non-core or that are so attractive that we can still get a good multiple," Starwood CEO Frits Van Paasschen told analysts in an Oct. 22 conference call. "There is more money and interest (by investors) than a few months ago."
(CHICAGO, IL) - Workers at Starwood's downtown Chicago hotels have authorized their union representatives at Unite Here Local 1 to strike if a new contract can't be completed shortly. Similar strike authorizations have previously been posted by workers at the downtown Hyatt and Hilton hotels.
Union contracts covering 6,000 workers at 31 downtown Chicago hotels expired Aug. 31. Meanwhile, the workers continue to stay at their jobs. Hyatt Regency Chicago is one of the hotels involved in contract negotiations.
Health insurance is one of the sticking points in the contract talks. Union spokesman Jim Baker told the Chicago Tribune new health insurance guidelines proposed by Starwood could cut coverage for about 50 percent of the workers.
(NAIROBI, KENYA) - London-based Intercontinental Hotels Group sees ample growth opportunities in Africa over the next several years.
Karl Hala, IGH director of operations, says the 19-hotel company is studying key sites in Angola, Nigeria, South Africa, Tanzania and Senegal.
"We plan to develop our Africa network with more than 30 properties in prime locations and high growth cities over the next three to five years," Hala told a gathering while marking IHG's 40th anniversary.
In Kenya, IHG will open the 163-room, five-story Crowne Plaza Nairobi in the city's Upper Hill section in December with a staff of 200.
(CHICAGO, IL) - This is a big week on Wall Street for Chicago-based Hyatt Hotels Corp. The chain's initial public offering on the New York Stock Exchange hopes to raise up to $988 million. Its stock symbol will be H. The stock is priced in the $23 to $26 range.
"We are running into renewed volatility in the market that we haven't seen in some time," Jim Rossman, head of U.S. equity capital markets at Macquarie Capital, told The Wall Street Journal. "One essential requirement for a robust IPO market is stability in valuation."
Bill Buhr, head of IPO research at Morningstar Inc., tells the WSJ he is seeing "a wider range in the quality of some of these deals. Unlike Rossman, Buhr believes the IPO market is "returning to normal, with quality companies such as Vitamin Shoppe Inc. doing well when it debuted last week, even while AEI couldn't find buyers."
(MOSCOW, RUSSIA) - Moscow is being touted by industry sources as the strongest city in Russia for new hotel development these days, even though total tourism arrivals for the first half of 2009 have shown a double-digit decline of 19 percent, or about 1.5 million visitors.
The global economic crisis started to affect Russia during the last quarter of 2008 and caused the tourism numbers' decline, according to the Committee for Foreign Economic Relations of Moscow Cituy. However, over the past 10 years, total visitation to Moscow grew at an annual compound rate of about 12 percent.
Hotelnewsnow.com says that based on data from the Moscow Department for Hotel Coordination, in 2008 there were an estimated 247 hotels with about 79,400 beds. New development under way is expected to increase branded hotel rooms by nearly 6,000 in the next three to four years.
(ST. PETERSBURG, RUSSIA) - Fraport AG has signed a multi-million-dollar, public-private-partnership agreement for developing, reconstructing and operating St. Petersburg's Pulkovo Airport, the fourth largest airport in Russia.
Fraport chairman Dr. Stefan Schulte says his company plans to make Pulkovo Airport the main transportation hub for one of Russia's most popular tourist regions. "We intent to make the development of Pulkovo a model project for the Russian aviation industry and for us as an airport manager."
St. Petersburg, often called Petersburg, is Russia's second largest city after Moscow with 4.6 million inhabitants. Over six million people live in its vicinity.
The 306-year-old city is a major European cultural center and an important Russian port on the Baltic Sea. St. Petersburg is often described as the most Western city of Russia, with its vast array of hospitality and entertainment sites.
(LAS VEGAS, NV) - Echelon is on the shelf. In a conference call with analysts, Boyd Gaiming CEO Kenneth Smith says the planned $4.8 billion, 87-acre project will not be completed for another three to five years.
A glut of hotel rooms in metro Las Vegas and a national financing squeeze have curtailed the project. Foundation construction began in June 2007.
Echelon was initially envisioned to open in late 2010 with 5,000 rooms in five hotels, 750,000 square feet of convention and meeting space, 300,000 square feet of retail, two live entertainment sites, 30 dining and nightlife attractions, a 140,000 square-foot casino and parking for 8,000 cars.
(LONDON, UK) - London-based Premier Inn once again has been ranked as the leading economy hotel brand in Europe. The Park Inn brand was rated best in the mid-scale category. The ratings were announced in the fifth annual JD Power European Hotel Guest Satisfaction Survey.
Right behind Premier Inn were Travelodge, Etap Hotel and Comfort Inn. The Forumle 1 chain finished last, according to The Independent, an industry publication in London.
Following the Park Inn were Dorint, Clarion, Ramada and Best Western.
The poll covered 42 hotel brands and queried guest satisfaction in seven categories - costs and fees, guest room, hotel facilities, food and beverage, check in and out, hotel services and reservations.
The study was based on responses from 13,000 guests who stayed at a hotel in Europe between May 2009 and September 2009.
(ORLANDO, FL) - Hotel tax revenue to Orange County for fiscal 2008 that ended Oct. 31, 2009 totaled $142.2 million, a 15.4 percent drop, or a loss of $26 million from fiscal 2007.
Average room rate was down 14.5 percent from a year earlier, according to Smith Travel Research. It was the worst September in rates since 2001.
Orange County Comptroller Martha O. Haynie and her staff had projected total revenue for fiscal 2008 to be $$17.5 million higher than recorded.
The hotel tax revenue finances major Orlando area entertainment and sports projects like the Citrus Bowl, new NBA Arena and a planned performing arts center.