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1. Bank Trio Sues Ashford To 'Preserve Value of Hotels'
Three U.S. banks — Bank of America, Barclays Bank and Morgan Stanley Bank — have initiated legal action against Dallas-based real estate investment trust Ashford Hospitality Trust, claiming the firm breached its contracts in defaulting on loans tied to 14 hotels in eight states, CoStar News’ Candace Carlisle reports. The banks are asking the U.S. District Court for the Southern District of New York to appoint a receiver to ensure the hotels remain in compliance with their Marriott International brand agreements and retain their value.
The three banks originally provided $293.8 million backing the 14 hotels, according to court documents. Attorney Frederick Whitmer, in an argument filed with the court, stated: “The plaintiff has learned the hotels require a significant influx of cash to continue operating, and defendants do not appear to be able to provide the resources necessary to continue managing the hotels effectively.”
2. UK Budget Office Slashes GDP Projections
The Office for Budget Responsibility, a non-departmental public body funded by His Majesty’s Treasury, has slashed United Kingdom gross domestic product predictions, the BBC reports. In March, the Office predicted GDP would grow 1.8% in 2024 and 2.5% in 2025. Updated projects call for GDP to grow 0.7% and 1.4% for those respective years. OBR Chairman Richard Hughes said spending plans outlined in the chancellor of the exchequer’s Autumn Statement on Nov. 22 represent “a very big fiscal risk.”
Speaking to the cross-party Treasury Select Committee, Hughes said: “It is very difficult to assess the credibility of the government’s spending plans, because after March of 2025 the government doesn’t have any spending plans.” The blue-ribbon announcements in the Autumn Statement were the freezing of business rates and the cuts to National Insurance Contributions, with the main rate dropping from 12% to 10% in January.
3. Chicago Hotel Performance Nears Historical Peaks
Among the U.S.’s top 25 markets, Chicago has been a laggard in performance recovery following the COVID-19 pandemic, but with room demand increasing notably, its average daily rate and revenue per available room are getting close to historical highs. Hotel News Now’s Bryan Wroten hosted a podcast conversation with David Duncan, president and CEO of First Hospitality, and Ryan Ori, senior staff writer for Chicago at CoStar News.
According to CoStar data, Chicago hotel 12-month ADR hit $160.47 in October, a 4.6% year-over-year increase, and for the same period its RevPAR reached $101.29, nearly a 10.2% increase compared to a year ago. The market's 12-month average occupancy is at 63.1%, a 5.3% increase over last year but still lower than the average of 69% between 2014 and 2020, indicating there's still room to grow.
4. Los Angeles Legislation Requires Hoteliers To Replace Lost Housing
The Los Angeles City Council on Nov. 28 approved a draft law requiring hotel developers “to replace any permanent housing lost in the process” of a hotel’s construction. The measure was voted 14 for and zero against, according to the Daily Breeze. The resolution was brought to the table by Council President Paul Krekorian and hospitality union Unite Here Local 11, among others.
The new draft replaces a ballot initiative sponsored by the labor union that was set to be voted on in March 2024. There is opposition to the council’s decision, the news site said, from “motel owners … and from homeowners who use their homes for short-term rentals.”
5. Myanmar Sedona Luxury Hotel To Reopen Dec. 1
Despite the incarceration of former president and Nobel prize winner Aung San Suu Kyi and international isolation since a military junta in government took power in 2021, tourism continues in some form in Myanmar’s capital Yangon, where the Sedona Hotel Yangon will reopen on Dec. 1, according to Nikkei Asia.
On Oct. 23, Hotel News Now reported that Singapore-based owner Keppel Corp, sold the 789-room luxury hotel, built in 1996, to compatriot firm Spring Blossom Ventures for 76 million Singapore dollars ($57 million). It will reopen with a room count of 200, with additional, existing rooms to be added if demand rises, Nikkei Asia reports. It added that “with domestic tourism destinations restricted, the hospitality industry is hoping for demand for ‘staycations,’ long popular among wealthy locals who stay at nearby hotels.”