Hilton expects 20%-plus RevPAR drop in Q1
After Hilton Worldwide Holdings disclosed Thursday that it would suspend operations at nearly 1,000 hotels, or at about 16% of its global hotels, as a result of the COVID-19 pandemic, its stock slipped 0.5% in morning trading. The company expects first-quarter revenue per available room to fall 22% to 24% from a year ago, which includes a 1% increase in January, a 4% decline in February and a 56% to 58% drop in March. Hilton said it also expects “material declines” to earnings and overall results. Based on its current cash position and the assumption that current low levels of occupancy persist, the company says it can fund operations for the next 18 to 24 months.
Crown Resorts lays off 11,500 employees
Australia’s Crown Resorts is laying off 95% of its staff following a March government order to close all gambling venues in response to the COVID-19 pandemic. The casino operator released a statement explaining that it had been “forced to substantially reduce its workforce” either on a full or partial basis, which means 11,500 of its employees will be furloughed. Only those roles in “business-critical functions” will remain active. Crown CEO Ken Barton said the company’s move to stand down the majority of its staff was a “tough but necessary decision.” A payment of a two-week salary will be given to full- and part-time employees who were laid off, excluding senior management. Eligible casual workers will also get a lump sum of A$1,000 (US$630).
U.S. House members want relief for DMOs
Over 80 U.S. House of Representatives members from both sides of the political aisle have signed a letter urging congressional leaders to provide relief for destination marketing organizations (DMOs) whose funding has been crippled by the coronavirus crisis. Despite contributions to local and regional travel economies, many DMOs were unintentionally left ineligible for coronavirus relief funding under the U.S. Paycheck Protection Program (PPP) because of their nonprofit or quasi-governmental status. The U.S. Travel Association has been working with Congress to fight for more funding.
New York’s Hotel Indigo stays open via SBA loan
At least one New York City hotel owner has now secured federal assistance to keep his property open. Rotem Rosen’s MRR Development secured a US$1.7 million Paycheck Protection Program loan for the Hotel Indigo. The company expects a US$800,000 loss for the hotel in the first quarter, according to preliminary estimates — a stark reversal from the US$400,000 profit it had made in the first quarter last year. The hotel had seen strong performance in 2019, with annual net operating income passing the US$10 million mark for the first time.
Airbnb losing hosts to long-term rentals?
Airbnb could lose a significant portion of its host community to long-term rental sites, according to data from analytics company GlobalData. Globally, Airbnb hosts have been losing the vast majority of their bookings in recent months and now many need a reliable form of income. A growing number of hosts have deleted their Airbnb listings to make way for month-to-month leasing, says GlobalData. According to a survey, 51% of Americans are extremely concerned about the COVID-19 outbreak, and 77% are expecting the situation to worsen in the next month.
Hotel CMBS loans worth US$2B fall into special servicing
As the coronavirus disrupts the commercial-mortgage backed securities market, loans on hotel properties have been ahead of the curve when it comes to delinquencies and special servicing. Three massive CMBS hotel portfolio loans, covering 186 hotels with a total outstanding balance of about US$2 billion, were among the largest to be transferred into special servicing so far this month. Single-borrower transactions backed by only hotels have been the hardest hit of all. Last month, Kroll Bond Rating Agency assigned a “underperform” outlook to all single-asset single-borrower lodging deals that it was tracking, citing a likely decline in occupancy to around 10% as had been the case in China and Italy.
Duetto offers free demand report for hoteliers
Duetto has launched the Duetto Pulse Report, a free, data-driven analysis of key metrics. The report provides a bi-weekly analysis of market demand from hotels using the Duetto platform. The first report, highlighting data for March 2 through April 5, indicated that travelers intend to resume travel as soon as possible. In the U.S. and Europe, cancellations flatten by August 2020 and bookings for October 2020 are already trending ahead of 2019. Asia-Pacific is trending slightly ahead, with the data showing cancellations flattening by July 2020.
Six Senses keeps wellness going from home
Six Senses corporate, spas and individual resorts are pivoting social media channels towards wellness offerings during the coronavirus pandemic. Content includes shamanic meditations, immune-boosting recipes, workouts and a 10-week junior marine biology program, among other offerings. The program will continue through May, with guests including expert on human behavior and relationships Stan Tatkin; author Dani Shapiro; human, body and brain performance coach Ben Greenfield; and wildlife and literacy activist Boyd Varty.