COVID-19: Hilton sells US$1B in points | Trump layoffs

AmEx buys US$1B in Hilton points

On April 16, Hilton announced a proposed US$500 million senior unsecured notes offering and a recently completed US$1 billion points pre-sale to American Express. (The company completed a similar transaction in October 2013 when it sold US$650 million worth of points to American Express and Citibank in order to reduce debt pre-IPO.) According to analysis from Baird Equity Research, while Hilton does not have any near-term debt maturities, the efforts to increase near-term liquidity are a positive given the continued fundamental uncertainties that exist. Including expected proceeds from the bond offering, Hilton estimates that it has 18 to 24 months of liquidity if current unfavorable operating conditions persist.

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Getty Images

Furloughs, layoffs at Trump, other Florida hotels

The Trump National Doral Miami has furloughed more than 500 employees, while the 194-room Delano South Beach, owned by SBE Entertainment Group, laid off 261 employees, according to a notice filed with the state. Last month, BLT Prime Doral, a restaurant at Trump National Doral Miami, laid off 98 people and also shut down temporarily. South Florida’s hospitality industry has been hit particularly hard by the coronavirus pandemic. The 653-room InterContinental Miami has already laid off 377 employees, while the 221-room Four Seasons Hotel Miami furloughed 312 workers.

More from The Real Deal South Florida

And at Trump D.C…

The Trump International Hotel in downtown D.C. filed a layoff notice affecting 237 employees. The hotel, which is operated by the Trump Organization in the Old Post Office under a lease from the U.S. government, was up for sale when the coronavirus hit. At the time, the Trump Organization was asking US$500 million for the lease, and reportedly had interest from Salamander Hotels’ Sheila Johnson, D.C. developer Brian Friedman and others. But on March 31, the company put the sale of the hotel on hold due to the coronavirus’ impact on the market.

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Oyo looks to SoftBank for aid in Japan

To cut costs, Indian startup Oyo Hotels & Homes is planning to move some employees off its payroll and over to one of its biggest investors, Japanese tech giant SoftBank Group. Oyo became one of the world’s biggest hotel chains, fueled by cash from SoftBank and its US$100 billion Vision Fund. Its growth came largely from persuading independent hotels to join its network and use its booking technology, taking a cut of revenues in exchange.

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Some Accor hotels to admit mild virus cases

French hotel group Accor said that some of its hotels in the Paris region will open Thursday to people infected with the coronavirus who are either symptom-free or showing slight symptoms. Accor CEO Sebastien Bazin also told France Inter radio that 300 of Accor’s hotels in France had said they were prepared to participate in the initiative, which comes as French President Emmanuel Macron has indicated the country’s lockdown could be progressively lifted from May 11. Health measures in the hotels will be beefed up so that they can safely re-open later for business. Bazin did not discuss how the initiative would be financed.

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Asia profit decline deepens

Hopes for a 2020 rebound in hotel performance in Asia were all but dashed away by the emergence and spread of the coronavirus, according to data from HotStats Annual Report.  While 2019 was already a down year, this year will likely outdo it. The hope now is for hotels across the region to reopen if shut, build back occupancy and inch by inch boost revenue while keeping a vigilant eye on expenses to achieve some semblance of normality. A look back on 2019 shows some of the difficulty already plaguing the regions hotels on the top and bottom lines. 

New date for NYU Hospitality Investment Conference

The two-day event will now take place November 11 and 12 at the New York Marriott Marquis. After careful consideration and to ensure the health and safety of conference attendees and panelists in light of the COVID-19 pandemic, the conference’s executive planning committee has chosen to postpone the conference from its originally scheduled slot in June.

Read more about the event

Why work from home when you can work from a hotel?

Two California hotels in The Meritage Collection are pushing the idea of rooms as office space, with rates starting at US$69. The offer, at both the Pasea Hotel and Spa in Huntington Beach and the Estancia La Jolla Hotel & Spa in La Jolla, includes free high-speed Wi-Fi or wired internet, two-line speakerphone, unlimited in-room coffee and tea, access to touchless in-room dining service, free daily parking, same-day check-in, and one complimentary bottle of wine.