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1. Germany Officially in Recession
Two consecutive quarters of economic contraction in Germany signals that the largest economy in Europe is now officially in recession, the BBC reports. Spurred by persistently high inflation, Germany's economy contracted 0.3% in the first quarter of 2023 and 0.5% in the fourth quarter of 2022.
Drops in household spending — down 1.2% — and government spending — down 4.9% — are among the primary drivers of this recession.
Early projections are split on where the economy is headed, with LBBW bank analyst Jens-Oliver Niklasch telling the news agency that the second quarter will "be similarly weak" but the Bundesbank, Germany's central bank, projecting mild growth in April, May and June.
2. Some Fed Members Push Back on More Rate Hikes
Minutes from the Federal Reserve's May meeting show some dissension in the ranks with some members arguing for a pause on interest-rate increases, the Wall Street Journal reports.
"Some Fed officials have expressed anxiety that the economy and inflation haven’t shown more visible signs of slowing," the newspaper reports. "But they have also become uncertain about whether to keep lifting rates because of the potential fallout from three bank failures since March, including a credit crunch as banks face higher funding costs."
3. Latin American Developers See Opportunities in Branded Residences
HNN's Dana Miller reports from the first day of the Hotel Opportunities Latin America conference that many executives are excited about untapped opportunities in the region, and many see enticing growth opportunities with branded residences.
"We've always had a strong residential component at Marriott prior to the pandemic, but every deal that comes to the table is coming with a new hotel investor who's done residential and they're doing a hotel now with the residential. That branded hotel experience is super important to drive that real estate value for the residential side," said Brian King, president for the Caribbean and Latin America at Marriott International.
4. Tourism a Major Issue in Spanish Elections
Spain joins the ranks of European countries where residents are seemingly fed up about the impacts of tourism, and the idea of overtourism is now becoming a political issue ahead of local and regional elections this weekend, Reuters reports.
"We like tourism, to have visitors, but tourist overcrowding triggers problems of mobility, speculation and gentrification that put our local way of life at risk. Therefore, we have to regulate it," Barcelona Mayor Ada Colau said.
Reuters notes Colau is the most prominent — but far from the only — candidate pinning his campaign on tourism. The mayor, now seeking a third term, has promised to reduce cruise ship arrivals and convert hotels to housing.
5. Blackstone-Owned Club Quarters Hotels Face Foreclosure
Boston Business Journal reports the four-hotel Club Quarters portfolio, which is owned by a Blackstone Group real estate fund, is "headed to foreclosure" due to an inability to renegotiate its CMBS debt with special service CWCapital.
The $274 million loan has been delinquent for 34 months. It was originated by Bank of America.
CoStar News' Mark Heschmeyer previously reported Blackstone has been considering simply walking away from the underperforming portfolio of membership-based hotels.