Editor's Note: Some linked articles may be behind subscription paywalls.
1. Fed drops US interest rates by 50 basis points
As expected, the U.S. Federal Reserve on Wednesday cut interest rates, by half a percentage point. The New York Times called the decision an “unusually large move and a clear signal that central bankers think they are winning their war against inflation and are turning their attention to protecting the job market.” Fed chairman Jerome Powell hinted at additional decreases, saying, “we’re going to take it meeting by meeting. We made a good, strong start to this, and that is frankly a sign of our confidence, confidence that inflation is coming down.”
C. Patrick Scholes, managing director of lodging and leisure equity research at Truist Securities, told Hotel News Now that lower interest rates are a broad positive for the lodging and ownership sectors.
“For hotel real estate investment trusts, [it will mean] a higher likelihood of increased transaction activity,” he said via email. “For the C-corps, a tailwind to unit development, and, for vacation ownership companies, better net returns on their securitizations.”
2. EU court targets parity clauses
Parity clauses, or contracts that require hotels to offer the same room rates on all booking channels including the hotel's website, have been under scrutiny across Europe for limiting competition. This week, Europe's top court said Booking.com's restrictions against hotels offering lower rates elsewhere — including on their own websites — are unnecessary and could reduce competition, Reuters reports.
The Court of Justice of the European Union ruled there was no evidence to justify parity clauses, but also said they are not considered anti-competitive under EU antitrust laws.
"It has not been established that price parity clauses, whether wide or narrow, first, are objectively necessary for the implementation of that main operation and, second, are proportionate to the objective pursued by it," judges said.
3. US posts negative, sluggish metrics
U.S. hotels saw negative performance metrics for the week ending Sept. 14, except for average daily rate.
Occupancy dropped 1.7% to 66.6% and revenue per available room decreased 1.4% to $107.86, according to CoStar data. ADR was the only metric to see an improvement, albeit a small 0.2% increase to $162.05.
Orange County, California, was the only top 25 market that saw double-digit increases in all three metrics for the same period.
4. Kyiv hotel sells for $60 million
The State Property Fund of Ukraine announced the 363-room Hotel Ukraina, which prominently sits on Kyiv's Maidan Nezalezhnosti, has been sold to a private businessperson for 2.5 billion Ukrainian hryvnia ($60.4 million). The hotel has been state-owned for the last 63 years, according to the Kyiv Independent.
The newspaper reported the hotel sold to Ukrainian Maksym Krippa, “who bid over double the starting price of 1.05 billion Ukrainian hryvnia).”
The hotel’s home page states that “we care about your safety. The hotel is equipped with a bomb shelter with free Wi-fi and amenities.”
5. Harborview acquires two Marriott hotels in Ocala, Florida
Lawrence, New York-based Harborview Capital Partners closed on a $24.5 million loan for the acquisition and renovation of two hotels in Ocala, Fla., the 169-room Courtyard by Marriott Ocala and the 87-room Residence Inn by Marriott Ocala. Miami-based BridgeInvest negotiated the financing for the new owner. Harborview Capital picked up the portfolio from American Hotel Income Properties for $26.5 million and plans to renovate the hotels by next year.