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1. Companies Want Clarity on New Minimum Tax
In their companies' most recent earnings statements, executives of publicly traded U.S. companies have said they’re seeking guidance from the IRS and the U.S. Department of Treasury on the new corporate minimum tax set to go into effect Jan. 1, 2023, reports the Wall Street Journal.
The tax, part of the Inflation Reduction Act, requires businesses that average at least $1 billion in publicly reported profits over three years to calculate taxes with the existing 21% levy on corporate income and a 15% rate based on their book or financial statement income, according to the article. The businesses must pay the higher of the two.
2. Hersha Closes on Sale of Two Hotels for $125 Million
Hersha Hospitality Trust has closed on the sale of the Hotel Milo Santa Barbara and the Pan Pacific Seattle for a combined price of $125 million, or about $455,000 per key, reports HNN’s Terence Baker. Combined with the sale of a portfolio of seven hotels earlier this year, the hotel real estate investment trust has sold a total of $650 million in hotels in 2022.
“The timing of all of our dispositions has been very strategic,” Hersha CEO Jay Shah said. “Holding assets into 2022 allowed us to benefit from increased hotel cash flows in the first half of the year, bringing pricing close to our internal NAV, while allowing us to take full advantage of a more active transaction and financing market than we are witnessing in today’s environment.”
3. Brand Launch, Deal Boost Wyndham’s Growth
Wyndham Hotels & Resorts has grown its global portfolio by 33,400 rooms to 836,000 since Sept. 30, 2021, and it has another 212,000 rooms in approximately 1,600 hotels in its pipeline, reports HNN’s Robert McCune on the company’s third-quarter earnings.
The company grew its portfolio by 4% globally, a 420-basis point increase compared to the third quarter in 2021.
"This quarter, we grew our development pipeline by 10%, surpassed our full-year development goal for our new extended-stay brand and completed the acquisition of our 23rd brand, Vienna House," Wyndham President and CEO Geoff Ballotti said in the company’s earnings release.
4. US Consumer Confidence Dropped in October
The Conference Board’s Consumer Confidence Index shows that U.S. consumer confidence dropped from 107.8 in September to 102.5 in October. The Present Situation Index, measuring consumer’s assessment of current business and labor market conditions, also dropped from 150.2 to 138.9 this month.
“Notably, concerns about inflation — which had been receding since July — picked up again, with both gas and food prices serving as main drivers,” said Lynn Franco, senior director of economic indicators at the Conference Board. “Vacation intentions cooled; however, intentions to purchase homes, automobiles and big-ticket appliances all rose. Looking ahead, inflationary pressures will continue to pose strong headwinds to consumer confidence and spending, which could result in a challenging holiday season for retailers. And, given inventories are already in place, if demand falls short, it may result in steep discounting which would reduce retailers’ profit margins.”
5. High Travel Demand Drives Up Airline Prices
The high demand for travel in the U.S. means that even budget airlines are expensive now, reports the Wall Street Journal. Airfares for future leisure travel were up almost 43% year over year in September and up 8% compared to September 2019.
While some passengers attempt to save money flying on budget airlines such as Frontier and Spirit, those airlines have increased fares as well, according to the article. The airlines also charge fees for checked luggage and carry-on bags in some instances.