Blackstone misses US$274M loan payment
As the hospitality sector struggles to regain its footing as the first waves of the coronavirus crises begin to subside, New York-based investment firm Blackstone skipped a payment on a US$274 million hotel loan. The hotels at issue are in Chicago, Philadelphia, Boston and San Francisco. Blackstone acquired them in 2016 from Club Quarters. A portion of the debt has been trading at levels that indicate investors have long-term concerns about the sector.
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BD Hotels defaults on Watson Hotel mortgage
In another potential COVID-19 casualty, Richard Born and Ira Drukier’s BD Hotels — the largest boutique hotel company in New York City — has stopped making payments on a mortgage for the 600-room Watson Hotel on Manhattan’s West Side. Now, HSBC, which provided BD Hotels with a US$42.5 million loan in 2011 to finance its leasehold on the hotel, is apparently looking to sell the non-performing loan.
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China reports another plunge in tourism revenue
China’s struggle against the economic overhang of the coronavirus continues. Renewed limits on social activities has hurt the pace of recovery, as evident from the nearly 69% drop in tourism revenue during the three-day Dragon Boat Festival that officially ended Saturday. The restrictions are primarily in Beijing, where authorities increased social-distancing measures and tightened scrutiny on travel in and out of the capital city after a series of COVID-19 cases emerged just two weeks before the holiday. Nationwide, many scenic spots are still capping visitors at a fraction of total capacity.
Fragile U.S. industry continues to have monthly gains
In the U.S., between April and May, total revenue per available room (TRevPAR) was up 39% (down 92% year-over-year) and gross operating profit per available room (GOPPAR) was up 32% to $-17.25 (down 116.2% year-over-year), according to data from HotStats. The uptrend is a sign that April may have been the bottom and absent a surge in cases, which is a possibility, the expectation is that month-over-month numbers will continue to improve, especially as more states move into Phase Two, which allows for non-essential travel to commence and sets out certain guidelines should hotels decide to reopen. Occupancy and room rate in May remained well off 2019 levels, but did climb 4 percentage points and 5%, respectively, from April, helped out in some way by Memorial Day Weekend travel at the end of May.
U.S. Travel reacts to EU travel ban
The U.S. Travel Association issued a statement in response to the European Union’s announcement that it will exclude most travelers from the U.S. as it opens its borders. According to Tori Emerson Barnes, the group’s executive vice president for public affairs and policy: “The EU’s announcement is incredibly disappointing, and a step in the wrong direction as we seek to rebuild our global economy. In the U.S. alone, travel-related jobs account for more than a third of lost employment due to the fallout of the pandemic. Health is paramount, and the public has a major role to play by embracing best practices such as wearing masks, but we are at a stage when it should be possible to make progress. This is unwelcome news and will have major negative implications for an economic recovery — particularly if this ban results in cycles of retaliation, as is so often the case.”