REITs targeted after using federal aid
U.S. Rep. Alexandria Ocasio-Cortez is taking aim at real estate investment trusts that seek to use federal aid to pay out shareholder dividends. The progressive congresswoman criticized industry trade group Nareit for lobbying congress to allow REITs to use federal aid to pay dividends. Ocasio-Cortez said that while an estimated 70% of hotel workers have been laid off, hotel companies were still paying out millions to shareholders. She pointed to three hospitality REITs in her letter: Park Hotels and Resorts, CorePoint Lodging Trust and Apple Hospitality, which at the end of March paid shareholders US$105 million, US$11 million and US$67 million, respectively.
Possible 19% shift to virtual meetings long-term: Survey
According to research from Morgan Stanley, surveyed corporate travel managers expect sharper declines in the 2020-2021 travel/hotel spend than initial RevPAR forecasts, and a 19% long-term shift to virtual meetings. While the travel managers also expect travel budgets to return to 2019 levels soon, the survey ultimately leans negative.
Over half of travel buyers have revisited policies
As signs of recovery continue in the business travel sector, travel procurement professionals are prioritizing the health and safety of employees, according to a poll by the Global Business Travel Association. Over half of travel buyers report their company has changed its travel policy, and 70% characterize the policy changes as being “somewhat” or “a lot.” When asked what travel program changes have been made due to the pandemic, instituting new rules about pre-trip approval (53%), having more frequent or detailed pre-trip communications or briefings (35%), collecting health information from employee travelers (i.e., virus exposure or preexisting conditions (24%); and clarifying or changing rules about ticket credits/unused tickets (22%) are cited most frequently.
Times Square Edition Hotel may be back
New York City’s Times Square Edition Hotel, dark since March and due for permanent closure in August, might yet live to see the New Year’s Eve. Operator Marriott International advised employees in May that the 452-room hotel would close for good on August 13, owing to a pending bank-loan default by property owner Maefield Development, which is led by developer/investor Mark Siffin. But sources told the Commercial Observer that a deal has been worked out with lead lender Natixis and other parties to clear up a tangle of debt claims that will enable Marriott to reopen the hotel this fall.
U.S. occupancy: Mostly flat
U.S. hotel performance data for the week ended July 11 showed mostly flat occupancy and lower room rates from the previous week, according to data from STR.
July 5-11 (percentage change from comparable week in 2019):
Occupancy: 45.9% (-38.0%)
ADR: US$97.33 (-26.8%)
RevPAR: US$44.67 (-54.6%)
Aggregate data for the top 25 markets showed lower occupancy (39.2%) and ADR (US$96.69) than all other markets. Norfolk/Virginia Beach, Virginia, was the only one of those major markets to reach a 60% occupancy level (60.4%). Two additional markets surpassed 50% occupancy: Detroit, Michigan (54.9%), and Atlanta, Georgia (50.1%). Markets with the lowest occupancy levels for the week included Oahu Island, Hawaii (19.1%); Boston, Massachusetts (28.6%); and Orlando, Florida (28.9%). In New York, New York, occupancy was 37.0%, down from 40.1% the week prior. In Seattle, Washington, occupancy was 32.4%, virtually flat from the previous week.