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13 Jan, 2012
Latin America becomes new development hotspot

While new hotel development has slowed to a trickle in the United States and Europe, Latin America continues to offer attractive terms and growing demand for developers to plan around.

“Brazil is clearly one of our priority markets on the global level,” said Ricardo Suarez, Starwood Hotels and Resorts’ VP of development for Latin America. “We’ve been present for 38 years in the market, so we know it quite well. We’re looking for opportunities to grow not just in response to the World Cup or Olympics, but because of all of the positive economic growth and development in the country.”

Starwood recently announced the development of the Sheraton Reserva do Paiva Hotel and Convention Center in northeast Brazil, slated to opening March 2014. The 289-room hotel is part of a trend featuring new hotel developments in Latin America designed to appeal to the influx ofinternational businessmen looking to hold meetings at full-service hotels.

“Last year we opened our first managed Aloft in Columbia and see a lot of opportunity in countries like Columbia and Panama,” said Suarez. “It is really a very good moment for Latin America because the economy is very healthy with lots of growth prospects. The fact that we’ve added more rooms in our upper-upscale segments shows that Brazil is a key component of our planning.”

Other brands are looking to increase their share of the midscale market to capitalize on the region’s growing pool of middle-class travelers. Marriott, for instance, has increased its presence in Peru to bring new brands to the developing country.

“When you look at our region and ask where the opportunity is to develop at scale, I would say Brazil and Mexico are appropriate because of the size, population and number of secondary cities,” said Laurent de Kousemaker, chief development officer of the Caribbean and Latin American region for Marriott International. “We’ve seen the economies of Latin America as being relatively resilient to the economic crises with stabile growth and political environments. In general, there’s been more of a business friendly environment in countries like Columbia, which is particularly interested inattracting foreign investment.”


By :Andrew Sheivachman



13 Jan, 2012
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By :Stephanie Ricca



12 Jan, 2012
Brands focus on sustainability

Energy management is becoming a hot-button issue for hotel brands once again as owners look to reinvest in their properties and turn sustainability from a buzzword to a differentiator in their comp set.

"We believe that building in automation is key to our success in our properties and delivering a great guest experience," said Doug Rath, energy director of the Americas for Marriott International. "They very accurately control spaces as well as identify issues proactively before a guest is impacted, We have 250 full-service hotels in my region, and probably 65 percent of those now have automation systems."

Marriott has signed a number of deals with the vendors of energy-management systems, including a recent collaboration with Constellation Energy, to ensure property owners have a wide variety of certified vendors to choose from.

"The Constellation deal is a small piece of automation picture for Marriott," said Rath. "The only pieces we're really doing with them is initiating auto demand response, auto load shedding and they help us to interface with ISOs. The key is to shed load without impacting our customers."

Rath says training is necessary from managers and engineers to get the most out of networked systems, especially the right knowledge to manage peak energy consumption.

"You can put a brand-new automation system into a building but if you don’t follow up on it and have right staff in place, adjustment by adjustment you’ve lost the fine-tuned edge of the system," said Rath. "A system is assumed to start out well-designed and efficient so it's delivering on ROI. However, there's a huge relationship between whoever is overseeing the system on a daily basis and the persistence of the commissioning of the system; a direct relationship between owner/operator and efficiency."

Likewise, IHG has a program aimed at helping hoteliers gradually lead their property down a more sustainable path.

"In 2011 we launched the second version of our Green Engage software," said Paul Snyder, VP of corporate responsibility in the Americas for InterContinental Hotels Group. "There are over 170 discrete items in the program you can do to make your property more sustainable, on differing tiers of investment so hoteliers can pick and choose what’s relevant to them."

By offering an itemized approach to improving sustainability, both brands hope to encourage hotel owners to embrace sustainability.


By :Andrew Sheivachman



10 Jan, 2012
Four trends you need to know from CES 2012

The 2012 Consumer Electronics Show officially opened this morning at the Las Vegas Convention Center, showcasing a bevy of new consumer products offering increased opportunities for networked devices and personalized content. While the majority of these products are years away from release, here are the trends you need to know in order stay ahead of guest expectations.

1. Networked interactive TV will hit the home market soon. Interactive TV has been a staple of hotel stays for years, allowing guests to play movies or access hotel content from their guestroom television. In recent years, consumer TVs have been released with social networking and Internet browsing services pre-built into the hardware. But now, manufacturers are looking to integrate interactive TV into a broader set of applications for home and mobile devices. Samsung, according to Ars Technica, will release a series of "smart TVs" that will allow users of Samsung phones and tablets to simply interact with their TVs, and vice versa.

2. More streaming content than ever will be available on tablets in 2012. Netflix and HBOGo, among other applications, have sent hotel bandwidth usage by guests skyrocketing in 2011. Now Showtime, TechCrunch reports, will get in on the mobile video niche with its Showtime Anywhere app. Comcast, as well, has begun rolling out its live mobile stream app, according to MacRumors.

3. 3DTVs will offer Web-based services. While 3DTVs have been avaiable for the last couple years, there has been little penetration into the hospitality space due to high prices and a lack of features. Expect this to change shortly as TVs featuring passive 3D technology will bring cloud-based networking and even streaming games to the forefront with no additional hardware, according to The Verge.

4. Ultrabooks will battle tablets for mobile supremacy. 2011 will likely go down in the history books as the year when tablet computing finally hit the mainstream and begin to cannibalize notebook sales. Intel is looking to battle back against the Apple iPad and MacBook Air with Ultrabooks, a series of thin and light notebooks that will feature a number of simple tablet-like features. Engadget reports Intel will pour tons of cash into their marketing campaign for Ultrabooks this year. For a few hundred dollars more than an iPad, Intel reasons, you can purchase a powerful and sleek computer. Time will tell if their strategy will be successful, but expect to see Ultrabooks in your hotel shortly.


By :Andrew Sheivachman



9 Jan, 2012
India: 'Where it's at.'

 

The Oberoi Amarvilas, Agra

'Where it's at' may be the tagline for hotel development in India. By many accounts, there are less than 150,000 rooms in the entire country (China reportedly  has more than 1 million rooms in comparison).

What this means is there is ample opportunity for hotel companies to grow there brands not only in major Indian cities, but secondary and tertiary ones as well.

While there has been much word of Indian development bandied in the press. Is it really happening or is it just promises?

As you'll read in today's feature story, Chatwal Hotels & Resorts is making a push into India, saying it will open 100 hotels there in 10 years—52 in the next five under its Dream and Night brands.

Meanwhile, just last week Best Western said it planned on opening 66 hotels in India in five years.

Until cement is laid or real estate is bought, it's hard to believe, with certainty, what hotel companies say there are doing. All hotel operators are vying for a piece of the Indian pie, hoping to divert market share from the likes of Indian homegrown hotel companies such as Taj Hotels and Resorts and Oberoi Hotels and Resorts.

Unlike the U.S. market, I believe it will take more time for U.S.-based hotel companies to make inroads in India. It's a different culture with different tastes. Starwood Hotels and Resorts Worldwide recently made a smart step setting up a regional office in Gurgaon.

In order to do it right, having a presence on the ground is key. Look for more hotel companies to follow suit, setting up satellite office in regions they are looking to grow in. That's 'Where it's at.'


By :David Eisen



9 Jan, 2012
Reversal of Maldives spa ban will keep Maldives in business

We in the hospitality industry waited with bated breath after the government in the Maldives placed a ban on the sale of spa treatments. For a country that brought in almost 800,000 tourists in 2010, according to CNN, most of whom visit the Maldives for indulgence and relaxation, the ban caused a considerable amount of tension.

The country's Supreme Court, however, has removed the nationwide ban. The President said he has ordered to lift the ban on spas with immediate effect, while the country awaits the verdict of the Supreme Court on whether spas are legal under the Maldives constitution.

The ban was called to order by a group of Muslims, claiming that spas and massage parlors went against the beliefs of Islam. In a country that consists of 350,000 Muslims, but is also dependent on the spa industry for tourism dollars, who is correct?

CNN reports that the group of Muslims who called for the hold on spas are a group of extremists, and the majority of the Islamic population in the Maldives did not necessarily align with their beliefs. "Such extreme calls don't really quite find resonance with the majority of the people in the country," President Mohamed Nasheed told CNN.

The truth is, the tourism industry of the Maldives would absolutely tank without the spa culture. Yes, there are always water activities and dining, but the country has built its tourism empire on beachside lounging, holistic healing and pampering. Without a spa industry, where is the pampering?

Without getting political or treading on the "locals vs. foreign business" topic, because we all know that can get sticky, I think we can all agree that it would definitely be a shot to the head for the Maldives hospitality industry if the elimination of spas held through. At least, for the time being, those thousand-dollar-a-night hotels are safe.


By :Meagan Drillinger



4 Jan, 2012
Top Europe cities for hotel performance

November's hotel numbers were released in the last weeks of December, offering glimpses into 2011's overall hospitality performance. (The year's final numbers will be released soon.) In spite of the fluctuating economy, the statistics seem positive: "European hotel performance continued to hold on with slight increases in occupancy and average room rate compared to November 2010," Elizabeth Randall, managing director of STR Global, told World Property Channel. "Demand is still up, growing 4.4 percent last month. With the year coming to close, European hoteliers reported 6-percent RevPAR growth for the 11 months this year when measured in euros, almost equally driven by occupancy and ADR increases. The second half definitely showed softening and weaker year-on-year growth resulting from the stronger growth levels we saw in the latter half of 2010".

Performances of key markets in November:

    * Aberdeen, United Kingdom, (+8.1 percent to 81.1 percent), and Budapest, Hungary (+8.0 percent to 53.9 percent), reported the largest occupancy increases for the month.

    * Athens, Greece, fell 13.8 percent in occupancy to 45.0 percent, posting the largest occupancy decrease.

    * Paris, France, achieved the largest ADR increase, up 12.2 percent, followed by Florence, Italy, with a 9.2-percent increase.

    * Two markets experienced double-digit ADR decreases: Cardiff, U.K. (-19.5 percent), and Glasgow, U.K. (-14.3 percent).

    * Paris (+16.4 percent) and Budapest (+14.2 percent) reported the only double-digit RevPAR increases for the month.

Property Magazine offered two reports on different cities' performances in various regions throughout Europe. The first reported specifically on Budapest, Istanbul and Paris, which all registered strong increases in profit per room for November led by year-on-year growth in average room rate, according to the latest HotStats survey by TRI Hospitality Consulting.

Despite a 1.5-percent decline in room occupancy, hoteliers in Istanbul saw a 17.6-percent increase in achieved average room rate. In contrast, in addition to increases in achieved average room rate performance in both Paris (+6.1 percent) and Budapest (+8.4 percent), these capital cities also had room occupancy increases of 7.7 percent and 4.9 percent, respectively, which contributed to significant increases in RevPAR.

Paris hosted a number of major events throughout the month of November, including the Tennis Masters, which generated significant demand for hotel accommodation and resulted in the French capital achieving a room occupancy of 81.3 percent at an average room rate of $264, the highest achieved rate recorded this month of the European cities polled.

Despite a relatively weak room occupancy performance in the Hungarian capital, at just 65.5 percent, an increase in demand from the conference sector helped to boost the achieved average room rate for hoteliers in Budapest to $118 from $109 during the same period in 2010.

Conversely, profit per room in London declined for the third time in 2011, by 2.5 percent to $148 (perhaps fueled by the recent burst in new hotel openings that divided the city's usual profits among more properties). While a 1.8-percent decline in room occupancy led to a drop in both rooms revenue and total revenue performance levels, to $201 and $288, respectively, profit levels in the UK capital were reportedly further impacted by rising costs.

The second report focused on the Central and Eastern Europe markets, which the magazine says are still struggling with the global financial crisis. In 2011, however, the region eventually recorded a better performance, chiefly due to occupancy growth.

In nearly all Eastern European key markets, occupancy growth from January until October 2011 outstripped average room rates. Apart from Moscow, Polish cities Warsaw, Krakow and Wroclaw particularly stood out from the crowd by recording a higher growth in average room rates than in occupancy rates ― contrary to the general trend. The room rates in Sofia, Budapest, Bratislava and Poznan, on the other hand, stagnated or even declined. According to Christie + Co, these markets remained "under pressure" throughout 2011.

As we wait to see what cities get the most growth in 2012, the roller-coaster ride of 2011 will have far-reaching implications for the future: Naturally, hoteliers will want to build and buy in regions with strong numbers, but a city that thrives in one year can see a downturn the next. London's profit per room declined in 2011, but with the Olympics and the Queen's Jubilee coming up in a few months, the city seems ripe for a triumphant 2012.


By :Jena Tesse Fox



3 Jan, 2012
Nothing humbug about Christmas period for hotel industry

Looks like the grinch didn't steal anything from hoteliers this holiday season. In fact, he left a present. The U.S. hotel sector—pardon my French—kicked butt during Christmas week, according to STR.

The industry experienced increases in all three key performance metrics during the week ending December 24, 2011. In year-over-year comparison, occupancy rose 8.1 percent to 37.3 percent, average daily rate increased 2.7 percent to $89.48 and revenue per available room finished the week with an increase of 11.0 percent to $33.39.

The top 25 markets fared well, too. Houston reported the largest occupancy increase, up 16.9 percent to 36.6 percent, followed by Dallas (+15.2 percent to 34.2 percent), San Francisco/San Mateo, Calif. (+14.6 percent to 51.0 percent), and Washington, D.C. (+14.6 percent to 31.4 percent).

Two markets experienced double-digit ADR increases: Denver (+10.2 percent to $72.53) and San Francisco/San Mateo (+10.2 percent to $116.33). New York City posted the largest ADR decrease, falling 3.3 percent to $204.14 (which I can't understand at all because getitng a room in the city during the holiday season is harder than catching a cab during rush hour in the rain).

Five markets achieved RevPAR increases of more than 20 percent with San Francisco/San Mateo leading the way: +26.3 percent to $ 59.30)?

So, what does this all mean? It bodes well for the overall U.S. industry headed into 2012, which will still be a recovery year as hoteliers remain both optimistic and wary.

Expect more increases in ADR and better occupancy rates as business travel continues to pick up coupled with low supply growth.

To quote Dick Clark: Here's to a rockin' 2012!

 


By :David Eisen



20 Dec, 2011
New openings offer hope for 2012 to Middle East and Africa

This will be the final EMEA newsletter of the year, and looking back over 2011 throughout the hotel scenes in Europe, Africa and the Middle East, one story overwhelms all others: 2011 will go down in history not as the year of the Arab Spring, but as the Arab Year, when citizens took to streets to force out dictators and find new forms of government. As the world watches the Middle East and Northern Africa to see what happens next, travel patterns to the region have changed dramatically, and hoteliers are keeping a careful eye on where people are going—and where they may go next.

Egypt, for example, is still struggling to hold onto tourists as it struggles to establish its new government. According to Albawaba.com, hotels in the Red Sea and Cairo, which are usually "bustling with tourists" around the holiday season, are expecting occupancy rates to be almost 50 percent of what they were last year.

“The occupancy rate at the moment is drawing between 20 to 25 percent. We expect it to grow up to 60 percent during Christmas and New Year’s,” Saad Hossam El Din, head of reservations at Grand Hyatt in Sharm El-Sheikh, told the paper. Last year at Christmas, he added, Sharm El-Sheikh’s Grand Hyatt saw more than 80 percent occupancy.

But the world keeps spinning forward, and hotels are still rising throughout the region, beyond Dubai and Abu Dhabi. Here are a few recent announcements from the last week alone:

* Dubai-based Landmark Hotels group is eyeing opportunities to expand into Angola and Libya. The company, which manages eight hotels in the three- and four-star segment told The National that both countries are undersupplied with hotels. "In Angola there's a lot of oil, so there's a lot of development happening there," Deen Sadiq, group director of the Landmark Zenath Group, which owns Landmark Hotels, told the paper.

* In Algeria, Marriott International has signed an agreement to open a 198-room Courtyard by Marriott property in Setif, according to Trade Arabia. The Courtyard by Marriott Setif will be part of the Park Mall mixed-use development, and is expected to open in 2014.

Marriott's first hotel in Algeria, the Renaissance Tlemcen, opened in 2011, and in 2014 the company will open four others in one complex—the Algiers Marriott, Algiers Marriott Executive Apartments, Courtyard by Marriott Algiers and Residence Inn by Marriott Algiers—followed by the Courtyard by Marriott Setif. 

* Fairmont Hotels & Resorts plans to open up to seven new hotels in the Middle East and North Africa by 2016, according to Hotelier Middle East. The Toronto-based hotel operator said it would open its first property in Jordan in partnership with developer Isam Khatib and Partners, its first property in the Levant. New hotels are likely to be in Doha, Beirut and Saudi Arabia.

It all comes full-circle: Business at Fairmont's hotels in Abu Dhabi and Dubai has grown 11 percent this year as the UAE won tourists from protest-hit travel hotspots like Egypt, Tunisia and Syria, thus enabling the country to look into new markets. We'll see what countries struggle and which ones triumph in 2012. In the meanwhile, have a safe, healthy and happy New Year.

 

 


By :Jena Tesse Fox



19 Dec, 2011
What does the death of Kim Jong Il mean for N. Korea's hotel industry?

Maybe I'm exaggerating but there are like five hotels in all of North Korea. Five—maybe six (I can't get an accurate read on it and I'm not sure if STR covers the Communist country).

News today spread of the untimely death of North Korea's "Dear Leader" Kim Jong Il. While this may have repercussions for global stability, what I think is really on the minds of most is: What does this mean for the hotel industry? Will Jong Il's son, Kim Jong Un, join the 21st-century and open up the country to democracy and tourism?

Yeah, probably not. But build some hotels, why don't you?

Up until now, hotel development there has been abysmal. Just check out this doomed project as described by Esquire magazine. Initial construction on the 3,000-room Ryugyong Hotel started in 1987, and it's still not open! Can you imagine what their lender must be saying? Slap a Starwood flag on this one—stat!

We've seen scenarios like this before. When Fidel Castro stepped down as leader of Cuba, everyone thought tourism would flourish and new hotels to be built. Cuba says they are all for it, and maybe they are. According to an item in Prensa Latna, "Regarding tourism, business opportunities include the development of the hotel infrastructure by building new establishments and signing contracts to run hotels."

Wherever there is opporunity for new development, the hotel industry must be at the doorstep. We are seeing this in places like Sri Lanka and, as it looks, Cuba.

Who knows if North Korea is next? If East Germany did it, anyone can.

 


By :David Eisen






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