Editor's Note: Some linked articles may be behind subscription paywalls.
1. FTC Proposes Rule To End Noncompete Agreements
The Federal Trade Commission proposed a rule that would stop companies from limiting certain employees’ ability to work for a competitor, the New York Times reports. Noncompete agreements have been used by companies to prevent former employees from working for a rival or starting a competing venture for a certain period of time, sometimes as long as years after leaving and usually within a geographic area.
“Studies show that noncompetes, which appear to directly affect roughly 20% to 45% of U.S. workers in the private sector, hold down pay because job switching is one of the more reliable ways of securing a raise,” according to the article. “Many economists believe they help explain why pay for middle-income workers has stagnated in recent decades.”
The public can submit comments on the proposed rule for 60 days. It would go into effect 180 days after the final version is published. The rule is expected to face legal challenges.
2. Braemar, Ashford Give Preview of Fourth-Quarter Results
Braemar Hotels & Resorts and Ashford Hospitality Trust have announced preliminary revenue per available room results for the fourth quarter of 2022, reports HNN’s Dana Miller. The two hotel real estate investment trusts are externally advised by Ashford Inc.
For the fourth quarter, Braemar projects hotel occupancy of 64% and average daily rate of $469, resulting in RevPAR of $301. This reflects an approximate increase in RevPAR of 8% compared to the fourth quarter of 2021 and an increase of 20% compared to the fourth quarter of 2019.
Ashford Trust projects occupancy of 68% and ADR of $175, resulting in RevPAR of $118. This reflects an approximate increase in RevPAR of 25% compared to the fourth quarter of 2021 and a decrease of 1% compared to the fourth quarter of 2019.
3. New Hotel Development Stymied
While some conditions have eased for hotels already under construction, U.S. hoteliers looking to build new hotels continue to face obstacles, reports HNN’s Bryan Wroten.
Chief among those challenges is rising interest rates, driving up the cost of new financing and requiring developers to put more equity into projects or have enough cash flow to support the higher rates, said Jan Freitag, national director of hospitality market analytics at CoStar.
“When you are were thinking of it at a 3% or 4% environment and suddenly, you’re at an 8% or 9% environment, that matters dramatically to the developer,” he said.
4. Weekly US Hotel Performance Improves
U.S. hotels reported improved performance during the week ending Dec. 31, 2022, compared to the week before, according to data from STR, CoStar’s hospitality analytics firm. It also showed improved performance measured against the comparable week in 2019 due to a favorable holiday calendar shift.
Occupancy grew 10.4% compared to 2019 to 54.2%, and ADR grew 21.7% to $167.21, resulting in a 34.3% increase in RevPAR to $90.63.
Among the top 25 markets, Norfolk/Virginia Beach had the highest occupancy increase compared to 2019, up 22.9% to 48.5%. The biggest increase in ADR was recorded in Phoenix, up 53.5% to $174.33. None of the top 25 markets reported a drop in ADR.
5. US Employers Add 223,000 Jobs
The U.S. Department of Labor reports employers added 223,000 jobs in December, down slightly from the 256,000 added in November, according to the Wall Street Journal. The year ended with 4.5 million jobs added and an unemployment rate of 3.7%.
“We’ve obviously been in a situation over the past few months where employment growth has been holding up surprisingly well and is slowing very gradually,” said Andrew Hunter, senior U.S. economist at Capital Economics. “There are starting to be a few signs that we’re maybe starting to see a bit more of a sharp deterioration.”