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1. US Federal Reserve cuts interest rate
The U.S. Federal Reserve cut interest rates an additional 25 basis points on Wednesday, following a 25-basis-point cut in November and a 50-basis-point cut in September. Hotel industry experts aren't expecting the newest cut to provide much relief in regard to hotel financing, HNN's Bryan Wroten reports.
Greg Friedman, managing principal and CEO of real estate investment firm Peachtree Group, said the cut was already priced into the market. The Fed indicating that it's likely only going to cut rates twice in 2025 is more notable, he said.
"I think most people were underwriting the fact that rates were probably going to come down another 100 basis points next year," he said. "And now that doesn't seem practical, as the Fed is only going to potentially cut rates twice next year."
2. Bank of England keeps interest rates unchanged
While the U.S. Federal Reserve cut interest rates for the third consecutive time, the Bank of England kept its main interest rate unchanged at 4.75% on Thursday, Reuters reports.
UKHospitality CEO Kate Nicholls said in a news release that the decision was "disappointing."
"A rate cut could have helped incentivize economic growth and relieve the pressure of high interest rates on businesses, particularly those in hospitality saddled with COVID loan repayments," she said in the release. "While inflation increasing for the second consecutive month is concerning, generating economic growth has to be the priority."
3. Lark Hotels forms joint venture with Life House
Portsmouth, New Hampshire-based lifestyle brand and hospitality management company Lark Hotels formed a joint venture with hotel brand and operator Life House, HNN's Sean McCracken reports. The combined entity, which will operate as Lark Hospitality LLC, will have close to 100 independent properties and nearly $1 billion in assets under management.
“There is no company that has made everyone at Lark Hotels sharpen their pencils more than Life House,” said Rob Blood, founder of Lark Hotels. “As we come together, we look forward to incorporating the best practices of both of our companies to deliver exceptional experiences for our guests, investors, hotel owners and teams.”
4. US economy grows 3.1% in third quarter
The American economy grew at an annual rate of 3.1% from July through September, a slight increase over the 3% rate from April through July, the Associated Press reports.
Gross domestic product growth has exceeded 2% in eight of the past nine quarters. According to the AP, an uptick in exports and "vigorous consumer spending" charged the economy in the third quarter.
5. US unemployment claims drop more than expected
Unemployment claims in the U.S. dropped 22,000 to a seasonally adjusted 220,000 for the week ended Dec. 14, Reuters reports. Economists had projected there would be 230,000 claims.
"Claims have entered a period of volatility, which could make it challenging to get a clear view of the labor market. A range of indicators including claims and job openings suggest that conditions are much looser than they were before the COVID-19 pandemic, but the labor market is slowing in an orderly fashion," the news outlet reports.