Tax break for NYC hoteliers: Much-needed relief for New York City’s hotel industry materialized on Wednesday when Mayor Bill de Blasio signed an Executive Order eliminating the 5.875% hotel room occupancy tax rate for three months, starting June 1 through the end of August. The mayor’s office said that the order could lower the cost of rooms, which will help increase demand and build occupancy. This Executive Order comes on the heels of NYC & Company’s US$30 million “NYC Reawakens” marketing campaign, which highlights the city’s attractions to help bring back tourism. “Albeit temporary, we think it is a quick and very necessary shot in the arm and will spur domestic travel,” Vijay Dandapani, president and CEO of the Hotel Association of New York City, told HOTELS on Wednesday. “International, as you know, remains closed.”
EU moves to reopen borders: The EU reached an agreement Wednesday to allow vaccinated vacationers from outside the EU, including the UK, to visit, according to The Washington Post. However, when it comes to the unresolved question of how visitors will prove they have been vaccinated, the EU said it will be up to individual member states to decide. In response to this news, the U.S. Travel Association President and CEO Roger Dow released this statement:
“The European Union’s risk-based, science-driven plan to reopen international travel will hopefully spur the U.S. to heed the many calls for a plan and timetable to safely reopen our borders. The right conditions are in place: vaccinations are increasing, infections are decreasing, all inbound visitors get tested or have to prove they’ve recovered, and it’s possible to determine vaccine status.”
He followed it with a dig to the U.S.: “The U.S. has been a leader in many aspects of managing the pandemic, but is behind our global competitors in pursuing an international economic reopening.”
Urban not yet in vogue for U.S. travelers: A recent national survey commissioned by the American Hotel & Lodging Association (AHLA) indicates that only 29% of Americans are considering traveling to a city or urban destination this summer. Key findings of the survey, which was conducted by data company Morning Consult, include:
- Only 29% of respondents are likely to travel to a city or urban destination this summer, with 71% reporting that they would not travel to an urban market at all
- 75% are uninterested in traveling to a U.S. city or metropolitan area to avoid dealing with potential quarantines and testing guidelines
- 73% are uninterested in traveling to a U.S. city or metropolitan area due to lack of interest
- 72% are uninterested in either a vacation or leisure trip to a U.S. city or metropolitan area despite lower prices due to fewer travelers
Accor bets on Melbourne: Accor is betting big on Melbourne in the COVID-rebound era, — a city historically considered one of the hottest tourism destinations in the country. In addition to a new Mövenpick hotel, which opens in June, the company will also be opening hotels with its SO/, 25hours, Mercure and Peppers brands — all before the end of 2023. The new properties add to Accor’s existing portfolio of 43 hotels in Melbourne. With corporate, meetings and non-leisure travel to Melbourne dipping in the past year due to the closure of local and international borders, Accor’s CEO in the Pacific, Simon McGrath, forecasts that leisure travel will instead see a recovery.
Driftwood places preferred equity: Investor, developer, lender Driftwood Capital, Coral Gables, Florida, has provided US$12.79 million in preferred equity for a two-hotel portfolio in the Napa Valley region of Northern California. The investment, which comes behind US$41.3 million in senior construction debt, is for the new 135-key Cambria Hotel Sonoma Wine Country in Rohnert Park, and the 90-key Cambria Hotel Napa Valley in Napa, which is scheduled to open this summer. The sponsors, who sought an injection of capital to help cover cost overruns and complete construction, while also providing some additional runway for stabilization of both properties, have a total of five Cambria developments in various stages. Driftwood’s investment has a three-year initial term with a one-year extension option. Driftwood’s Lending Fund has placed more than US$40 million in mezzanine loans and preferred equity in 2021.
New Hilton brand drives forward: Hilton’s new meetings and events brand, Signia by Hilton, broke ground on its first newly-constructed hotel — the 975-room Signia by Hilton Atlanta in Georgia. In addition, the newly converted Signia by Hilton Orlando Bonnet Creek, the brand’s first property, will open this summer in Florida. Owned by Georgia World Congress Center Authority, the construction on Signia Atlanta is expected to be completed by late 2023.
Good news for hoteliers: Airbnb is getting roasted online this week, as customers complain about what they say are excessive fees and too many rules for listings, according to reporting from Business Insider. “We gotta stop airbnb,” said one customer on Twitter who included a screenshot of the price on a two-night rental: US$198 for the room itself, US$413.95 in total. The tweet ended up with over 200,000 likes. Airbnb responded in a blog post explaining its fee structure. (The company pointed out that hosts set nightly rates and cleaning fees, not Airbnb) It added that, while Airbnb typically charges a service fee of around 14%, local governments often charge taxes (similar to the hospitality industry).
European hotels where the dough is: London-based commercial real estate company Savills says there is a significant amount of capital targeting European hotels right now — on the hunt for the right opportunities. The real estate advisor says it expects to see some of this capital deployed from the second half of the year onwards, which would make for closer alignment between buyer and seller expectations. Mature markets and key gateway cities are likely to support capital preservation, while operationally, recovery will be tied to the degree of flexibility that comes with international travel and reopening borders. Overall, European hotel investment figures reached €2.16 billion US$2.63 billion) in the first quarter. At €746.5 million (US$911 million), the UK remains the most liquid European hotel market, accounting for a 34.6% share of transaction volumes, Savills says.