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June 2018

Industry News….
BANKS EAGER FOR HOTEL LOANS !
The timing is ready for borrowing cash from banks.  Troy Miller of Starwood Property Trust spoke to Hotel and Lodging stating, “It’s time…If I am a borrower.  You borrow all you can  borrow right now.”  Hoteliers are in concurrence with the Banking Industry that with lending rates ready to rise, now is the time to Buy or Refinance.  According to industry bankers who also cite rising interest rates, banks are in fact prepared to lend at once on refis and hotel acquisitions.

May 1, 2018

Hyatt is Contemplating Changing Group Commission Policy…… Mark Hoplamazian, CEO of Hyatt, announced at the World Travel & Tourism Global Summit that Hyatt is considering lowering its rate on group commissions because of several factors. Marriott lowered its group commission rate from 10% to 7% for North America bookings last month, and Hilton will follow suit in October.

Airbnb is Forcing Everyone to Up Their Game: How Hotels are Changing Tack….. There are multiple ways hotels can compete with Airbnb, such as targeting a different audience and offering excellent service. According to a report by Morgan Stanley, 42% of Airbnb users have replaced traditional hotel stay with an Airbnb property.

NEW AMERICAN TAX LAW CAN REALLY BENEFIT INVESTORS…BOTH THE SELLER  AND THE BUYER ! Tax Specialists including CPA’s see the new American Tax Law as a real prize for Hotel investors….both Sellers, and, Buyers !

Here are a few basic examples.  American Motel Hotel Brokers strongly recommends before acting one should consult with their CPA, or other Tax Advisor. The Tax Law has more Depreciation Options.  One really big option is the “Bonus Depreciation”.  There is a 100% “depreciation bonus” on acquisition of existing assets.  This Bonus is in effect until year 2022. Previously there were some laws favoring ‘new built’ bonus depreciation, but now for next few years can also be used on new acquired Hotels. There is a 20-% deduction of ‘Pass Through’ income that Partnerships such as LLC and Real Estate Investment Trusts can achieve. The 1031 can  now be moved from just ‘asset to common asset’.  May now also be used to defer taxes on Investments gains in ‘other forms of real estate’ via referred to “opportunity zones”. New Equipment can now be covered immediately as a write off in many instances. The Summation of these new Tax Rules can greatly benefit Hotel Investors that have a good generating cash flow asset, but depreciation has been, or is being, used up.  They may now have choices of assets to select new cash flow opportunities and gain new accelerated depreciation.

ARTICLE:  MAY 1, 2018

HIGH DEMAND MARKETS FOR BUYERS….CONTINUE TO SHOW GROWTH !
The 2018 Hospitality and Lodging business continues to ‘shine brightly’ in markets serviced by American Motel Hotel Brokers Member Brokerages, reports AMHB Network corporate office in Phoenix.  Demand in such markets as Arizona, California, Colorado, Dakota’s,  Florida, Georgia Illinois, Kansas,   Montana, Nebraska, etc., is actually exceeding the supply of well-priced-well financed Hospitality properties.  The earlier fear that a slowdown would occur in 2018, has been mostly erased.  Based on the hundreds of calls received daily, Bruce Barnes Vice President of AMHB’s Development Department reports, buyer demand is equal to, and in most instances, greater than 2017.  Barnes’ went on to say that due to fact that AMHB Network has continuous conversation with their Members, he has ‘1st hand’ facts regarding Buyer demand.  Because of this, American Motel Hotel Brokers Network Members have been especially active in acquiring ‘New Product’ to Offer the Buyers contacting AMHB.  Today the Inventory is turning over more quickly than the prior two calendar years.  To further support these facts, AMHB Network Research Staff has found all year a continuing upward trend in Occupancy, Rate and Revenue Per Room at Hospitality and Lodging properties.

INDIA HOTELS CONCERNED…. Luxury hotels in India fear business drop from 28% Tax assessed to luxury hotels in India.  Many expect stiff declines in inbound tourism that will hurt hotel’s growth reports India’s The Economic Times.

BLACKSTONE AND SPAIN’S HISPANIA…. Blackstone is preparing to make a full takeover bid for the Spanish property group Hispania. Hispania is valued at approx.. $2.3 Billion (American).  Blackstone is reportedly offering to purchase 16.65 % of Hispania stock for $386.1 Million (American).

NEW RETAILER HOTEL TREND…. Japanese homeware and lifestyle brand Muji, and brewer BrewDog are opening new branded hotel space.  These are examples of a new Hospitality sector trend.  Laura Ashley, already ventured into hotel retailing, is opening additional locations in Middle East and the Asia Pacific.

CHINESE TRAVELERS CAN NOW USE DIGITAL PAYMENT…. Millennium Hotels in partnership with digital payment platform, Alipay, now offers travelers from China the ability to book and pay for hotel rooms and misc. services at their Hotels.  Alipay has more than 600 million Chinese users.

AMERICAN STATISTICS UP ACROSS THE BOARD…. From STR Reports, week March 4 – 10, US Hotel occupancy increased by 1%….to 68% average;  ADR up 2% to $131.46; and, RevPar rose 3.1% to $89.53.  American Motel Hotel Brokers Network from their recent sales and new Listings of over 30 for January and February agree that rates and occupancies are trending upward.  With the expected increase of Bank Lending, Mike Sprinkle, AMHB Network Chairman and CEO feels, following the anticipated changing of some aspects of Dodd Frank banking regulations, travel will continue to grow in 2018.

EXPECT LARGE INCREASE OF FAMILY TRIPS THIS YEAR ! Based on AMHB Network Research Department, research indicates from study that 88 million are planning “family trip” in 2018.  These 88 million Americans plan to take FAMILY vacations this year. According to AAA Travel, 44% of millennials are planning a family getaway.  This is actually more than the members of Generation X that stand at 39%; or the baby boomers at 32%.  As families have done for prior generations, these family oriented trips are the one time in many families ‘to be together’.  Therefore, hospitality and lodging are main events in planning the trips.

EXPECT BANK LENDING TO EXPAND….. Eased Bank lending rules should increase given this week’s banking changes….including spreading into smaller Regional banks……

LIVE PLANTS KEEP HOTELS VIBRANT…..  Top hotels in America are keeping their public spaces more vibrant with live plants American Motel Hotel Brokers Network learns from outside reports.  Top hotels, though more expensive, are finding that using live plants in public areas are receiving very positive comments from their guests.  The overall guest experience, is well worth the cost of the upkeep.  Comments,and return reservations, further support this friendly amenity.

IF IT WALKS LIKE A DUCK….AND QUACKS LIKE A DUCK  !!!!…… Miss Ricca, Editor, writes that the ‘new’ Airbnb is looking more and more like a hotel company.  What will ‘you’ do about it?

THE FUTURE OF HOSPITALITY/LODGING ! That future lies squarely in hospitality companies and management employing advanced technologies land solving marketplace challenges.  This will be done in ways that  exploit their competitive advantages….their people, says Mr. Kerry Ranson, HNN columnist.  In doing this, Mr. Ranson states, the challenge is to attract quality individuals to tour organizations which will foster the genuine experiences that guests savor.

“SHRINKING ROOMS GIVE WAY TO MEETING SPACE…..” Construction Dive reports that today’s hotel makeover tend to downsize the room square footage in favor of more vibrant social spaces, upscale retail, and more usable meeting space.  In most of these revisions of space usage, experts state that security will command priority.

“PARK HOTEL AND RESORTS EXERCISING PURCHASE OPTION” Park has announced that underwriters are exercising option to repurchase 5,171,929, additional shares of common stock.  This repurchase option comes on the heels of a secondary offering to shareholder HNA Tourism Group

2017 ENDING WITH HOTELIERS SOLID GAINS…. As American Hoteliers end 2017, the North American Hospitality Review (NAHR) reports the following up ticks in Occupancy, Occupancy and RevPar. All travel segments have enjoyed: ADR, up 1.4%; OCC,up 3.9%; RevPar up 5.4%. Group Travel appears to lead the segments with : ADR , up 1.9%; OCC up 5.5%l and RevPar up 7.5% But, the lowest being Transient Leisure hit: ADR,up 0.5%; OCC up 4.3%; and RevParup 4.8%. It is surmised these upward trends are a result of favorable economic trends. It is expected that Holiday travel will increase nicely this year. Most regions of America are reporting very favorable Thanksgiving travel results.

CITIES USING HOTELS TO ‘REVIVE’ RETAIL CENTERS Cities with struggling retail centers are offering developers tax breaks to build Hotels in such usable space. The cities objective is long term. The development of tax revenues utilizing new Hotels as their product is catching on with American cities such as the Hotel and Convention Center in Brookfield, Wisconsin.

DAYLIGHT SAVING TIME ENDS NOVEMBER 5TH…… Do not forget to change your clocks this coming Sunday… except in Arizona, parts of Indiana and New England… where time does not change !……

GREAT BRITAIN INVESTIGATING OTAs…… Hotel Smart Brief reports that Online Travel Agencies are under the British “official scrutiny” in Great Britain. The British authorities scrutiny is founded on “suspicion of misleading consumers and possibly violating the law”. The practice of unclear and inaccurate information on the OTAs is increasing the difficulty for the Users of these OTA’s to get accurate and not misleading information.  This is resulting in difficulty for Users to in finding the ‘best deals’; the accuracy of what seems to be the ‘best deal’, the Competition and Markets Authority of Great Britain asserts.

CHOICE HOTELS AIM FOR COMFORT EXPANSION… Choice is reporting focus on increasing Comfort Inn distribution in No America.. They have opened 10 new ‘builds’ and/or ‘conversions’ last 3 months.. Texas (2) – Kansas (2) – and one each Mississippi, Tennessee, New Mexico, Michigan, South Carolina and Canada. The goal is to open at least one per month. Vice President of Development states current Comfort Inn lead in Upper and Mid-Scale segments. He says, “Choice is providing the tools not just for today, but support for our Hoteliers in future”. American Motel Hotel Brokers Network, America’s longest continuous named hospitality and lodging brokerage servicing Owners and Buyers throughout USA and some International venues, reports that Bruce Barnes, 40 year Veteran Hotelier has become Vice President of Member Development. Barnes will be concentrating on the continuous opening of new geographical markets within Canada and USA. Offering to experienced Hospitality/Lodging Brokers and Agents the opportunity to provide their Clients with an Inventory of over $300M hotels FOR SALE..and those ready to sell, the opportunity to have their Hotels offered to over 20,000 pre-qualified Buyers.

SAVANNAH . . . GEORGIA HOTEL & LODGING ASSOCIATION PRAISES – SEPTEMBER 6, 2017 Savannah occupancy in 2016 was up by 5%, speakers at GHLA Meeting reported.  All signs indicate this trend will continue upward in 2017 reaching 71.8%.  This compares to last year’s rate of 70.8%.  It is reported that nationally, hotels are expected to finish 2017 at 65.6%.  American Motel Hotel Brokers Network concurred with the occupancy increases, stating they are offering for sale a Best Western that is enjoying a 6% occupancy increase this year . . . and a guest revenue increase of over $400,000.

SAVANNAH VISITORS KEEP GROWING: 2012     12.4 Million 2013     13.0 Million 2014     13.4 Million 2015     13.7 Million 2016     13.9 Million 2017     14.2 Million (forecast)

CHINA FOREIGN INVESTMENT FACING RESTRICTIONS – SEPTEMBER 6, 2017 The beginning signals of a China  “slow down”  in USA investment opportunities shows signs of moving into the Hospitality and Lodging sectors, stated Mike Sprinkle, CEO of American Motel Hotel Brokers Network, at a recent AMHB Network market study forum for AMHB Member Brokers.  Major Chinese investors who also have interests in hotel investing such as HNA Tourism Group, Shanghai Jin Jiang Int. Hotels, Anbang Insurance, and others are receiving government restrictions in China related to overseas investing.  The Chinese government is beginning to “cry alarms,” Sprinkle repeated when asked why the underlying change in Chinese investing in America.  Sprinkle indicated the primary cause is that the Chinese government is concerned about the levels of bank-secured debt Chinese companies are deploying abroad.  However, Sprinkle went on to state that the influx of new money coming into our Hospitality and Lodging Industry surely seems to be offsetting any telling effects on AMHB Network sales.

HOSPITALITY/LODGING INDUSTRY CAN EXPECT MERGERS – SEPTEMBER 5, 2017 American Motel Hotel Brokers Network is reporting an anticipated development of mid-size companies considering mergers.  The Fitch Ratings seem to agree with American Motel Hotel Brokers Network’s research, except Fitch is taking their opinion down to even smaller companies.  This anticipated business change is attributable primarily to Marriott International and Hilton Worldwide market control of pricing.  As those companies enlarge their holdings, their control over increasing higher room rates continues to grow.  This factor of increased distribution of “product” and the market control factor of allowing increased rates could well entice smaller and mid-size firms to merge.

NEW HOTEL OPENINGS SPEAR INDUSTRY INTEREST – AUGUST 2017 Combined Industry Research reflects a surge of new hotels to be opened through year 2019.  Spearheading this estimated 114,906 new hotel openings is the South Atlantic Coastal region with an estimated 24,698. Closely behind is the West South Central Region of Texas, Arkansas, Mississippi and Louisiana with an estimated 21,190.  The Pacific Region of Washington, Oregon and California trails expectations, but still expects 17,881 new openings.  Arizona and the vast Mountain Regions are slightly behind the Mid-Atlantic (14,3890) and East North Central (10,494) with 8,943 expected new openings.  The smallest number of new hotel openings being forecast lives in the New England area, where approximately 3,045 are expected.  A portion of these numbers are actual that cover the next six months.  The remainder are forecast.

THE FINANCIAL POWER OF TOT’S OVERLOOKED BY SOME  – AUGUST 2017 The Transient Occupancy Tax is an important source of income for Municipalities.  As a ‘pass-through’ tax, your guests are paying, but it  is often not used by Hoteliers to advance their business.  The economic impact of TOT from meetings, conventions, family gatherings, organizational meetings, and other small and larger group events is much respected by most cities and towns.  Hotels using their Chamber of Commerce, local Universities/Colleges, Hospitals, etc., with the support of the City and County where located, can promote such events.  American Motel Hotel Brokers, the oldest continuous Hospitality and Lodging Brokerage Firm in America, when providing service to their buyers at time of purchasing a hotel, introduces the new Owners to the city/town organizations.  It is found that such introductions, combined with Owners’ use of the city and town support, builds ‘new’ sales growth for the Buyers (new owners).  Especially the younger population of hotel guests, it is found by AMHB, will often use these city/town organizations as a resource for lodging, entertainment, dining, recreation, etc.

LOVE HOME SWAP PURCHASED BY WYNDHAM – AUGUST 2017 The six-year-old Love Home Swap, with over 100,000 homes listed worldwide, is now part of the growing Wyndham organization.  This “home exchange” platform was purchased by Wyndham for a reported $44,600,000.  As the home exchange market, together with the home overnight rental markets, continue to grow, more American companies are entering.

RED LION HOTELS FIND A NEW “HOME” – AUGUST 2017 Red Lion, after 43 years being in Spokane, Washington, is moving its primary headquarters to Denver, Colorado.  Red Lion management intends to keep a Regional office in Spokane.  Red Lion was originally formed as a primarily Northwest Hotel company with tentacles into California, etc. some 43 years ago.  Citing the need, as they grow, for improved airline connections cemented their decision to relocate.

ISLAND OF BALI LAUNCHES INTERCONTINENTAL HOTELS GROUP FIRST RESORT! – JULY 2017 Hotel Indigo Bali Seminyak Beach set to open today for IHG.  It is the brand’s first Resort, and also their initial property in precious Bali. The resort covers over 4.7 hectares with beautiful landscaped gardens that add glamour and appeal to this 289 guest room hotel.  Giving the total of 289 are 19 Balinese styled villas which offer private swimming pools and featuring seven lifestyle dining offerings for entire Resort.

APPS……AND MORE APPS ! – JULY 2017 American Motel Hotel Brokers released information today that their New APP program for hotel owners, and those considering becoming owners in the Hospitality and Lodging business, has exceeded their initial goal by over 65%. For those interested in obtaining their AMHB APP….FREE.…go to the Apple Store or Google Play Store and ask for the APP. You may also contact American Motel Hotel Brokers at: info@amhbnetwork.com,…..or call, 602-230-9244. Comments from “recent users” are all positive, stated Joan Golden, Director of Technology.

INDUSTRY TIDBITS…..
American Motel Hotel Brokers Member Network reports very good success in their recent ‘drive’ to increase Inventory of Hotels for sale.  This increased inventory now provides over $500,000,000 of hotels, et al, ready to be purchased.  Many markets in the United States need more Hotels for sale to meet Buyer demand.  In AMHB Network’s Corporation home state, Arizona, Paul Parashar, Regional Director for a portion of Arizona emphasized recently that the Phoenix, and many surrounding markets, have an abundance of qualified buyers but fewer hotels available for sale at this time. The Arizona Member Agency, AMHB of Arizona, is actively contacting Owners interested in selling.

USA NEW CONSTRUCTION DROPS……
STR reports a 2.2% decline in new Hotel construction compared to April, 2017.  Construction of new hotel rooms in USA has declined in 6 of last 7 months.

FRANCE…AT LAST…SEE GROWTH…..
European sources report finally Paris is seeing new hotel supply as the return of travelers grows.

USA HOTEL REVENUES ‘HIT’ $208 BILLION….
from STR comes word that USA Hotel revenues exceeded $208 Billion in 2017.  That is an increase of $10 Billion !

CENTRAL/SOUTH AMERICA ‘SLOWS’….ASIA//PACIFIC ‘GROWS’…..
From the HNN Newswire comes word that hotel construction in Central/South America decreased 17.9% in April compared to April 2017.  Simultaneously, hotel growth increased in Asia and the Pacific by 27.1% during same period.

ARIZONA ‘BRIGHT SPOT’ FOR JOB CREATION….
Arizona State University in a new forecast writes that the Arizona economy will continue to expand ion 2018, with no recession on the radar !  Jobs will gain, as will population.  In 2017, Arizona placed among the top 10 states for job creation, domestic immigration, population growth and other key measures. ASU ended by forecasting further momentum likely this year, and perhaps beyond.

RED ROOF HAS ANNOUNCED their “Red Collection”,
John Garry, Franchise Development Director advises.
It is featured as an ‘Upscale Economy’ segment soft brand that is focused as unique hotels that are hper-local and inspired by a city’s vibe and culture.

CENTRAL AND SOUTH AMERICA HOTELS continue to report upward growth.  Occupancy rose 4.5% to 57.6% during past 30 days; ADR increased 7% to $1908; and RevPAR rose 12.l8% to $62.

WHILE CENTRAL/SOUTH AMERICA ROSE MIDDLE EAST AFT RICE saw ADR drop 4.5% land RevPAR slide by 3.7%.

AMHB MEMBER MONTANA and WYOMING OFFICES (Chuck Platt – Billings; Pat Green – Gillette, Wy.) are reporting are upping their game in terms of one-of-a-kind activities designed to provide guests with exceptional experiences to be remembered as guests return home. Many exciting experiences are now being offered….as an example, “saddle up with cowgirl legends as hotel activities go off the beaten path in exciting Western Style adventures”.

NAPA Valley
The Napa Valley Register reports that the famous Napa Valley experienced a 36% year over year drop in October hotel revenues. Smith Travel further reported a 22% decline in occupancy which extended into November. Experts expect similar numbers to be experienced regarding the December fires in Ventura and lower Santa Barbara Counties, California

Current SBA 504 November
Interest rates are:
20 Year Purchase Rate: 4.503%
20 Year Refinance Rate: 4.560%
10 Year Purchase Rate
Nov – Dec: 4.373%

54 YEARS AGO THIS MONTH……
The body of President John F. Kennedy was laid to rest at Arlington National Cemetery. His Widow, Jacqueline, lit an “eternal flame” at the grave-site.

TIDBITS OF CURRENT NEWS
California reports $6.2 Billion 2017 sales transactions.
This upward trend continues for 2018 according to American Motel Hotel Brokers accumulated statistics. Further, United Kingdom transactions are reportedly up 32% from Overseas Investors….including much American with a combined figure accounting for more than half.

Canada hospitality business ‘jumps’…… 
AMHB Network from their Canadian reports receive data of Occupancy and Rate growth similar to USA during first quarter, 2018.  ADR is up 4.7% to $154.55 ($117.13 USA); and RevPar up 7.5% to $94.88 ($73.07 USA).

WHOA !  INFLATION SLOWS…..
Per the US Government Reporting Agencies, Inflation slowed during February in USA…..

MARCH 16th, 2018
Following a South American hotel lodging surge, Brazil is reporting a 10.2% increase in year over year occupancy increase for early 2018.

NOVEMBER 9th, 2017
HOTEL RESERVATION CALL CENTERS BEING WASTED…….

A HTC Survey of over 20 Brands hired by Cloud5 is scheduled next week to issue an alarming report. The Report will state based upon a study that the hotel reservation call centers are being wasted as a revenue builder. They are being operated cheaply and the performance for their clients is poorly measured the study concludes.

OCTOBER 26, 2017
GET PREPARED !…….
Day Light Saving time changes Sunday, March 5th..
BEST WESTERN “SureStay” GETTING GOOD MARKS..
The new BW Brand is adding the Best Western name as ‘the brand’, as well
as including the popular Best Western Awards Program…

SEPTEMBER 21, 2017
Lodging Econometrics is stating that the Asia-Pacific new hotels under construction, excluding China, amount to approximately 342,670 rooms.  The primary Hotel Companies in this Asia-Pacific construction mecca are Accor Hotels with a reported 52,487 (245 projects), followed by Marriott International with 239 projects, and IHG with nearly 200.

SEPTEMBER 19, 2017
Sanitaire reports that guests’ final choices for a hotel can vary.  But, “cleanliness” is not a variable.  Guests will book elsewhere if rooms are not clean . . . and will not repeat.

SEPTEMBER 18, 2017
SmartBrief reports that 76% of Senior business executives travel for business at least once per month.  Reportedly, there are over 1,000,000 such travelers.  They tend to devoted customers who maximize business travel through “Awards Programs,” and lean toward ‘Extended Stay’ accommodations.

BEES!  BEES!  DO NOT BEGONE – SEPTEMBER 7, 2017
New York City’s Hilton Midtown Hotel is adding 450,000 bees to its rooftop, “Insiders” reports.  Purpose?  Bees are assisting Hotel to harvest 300 pounds more or less of honey per year.  The Hotel can now offer several honey dishes on its menu.

FRENCH TOURIST TRAFFIC – August 2017
The French tourist traffic is coming back strong after the 2016 terrorist attacks.  Paris occupancy figures are up some 10% compared to 2016.  The AMHB European Office reports that Melia Hotels, a major Spanish company, is aggressively seeking development opportunities in France.

FEDERAL PER DIEM RATES FOR FISCAL 2018 – August 2017
The General Services Administration, GSA, has announced that Federal Per Diem rates for Fiscal 2018 become effective October 1, 2017.  The Standard Rate will be increased from $91 per night to $93 per night for Lodging.

ARE YOU TAKING ADVANTAGE OF THESE TRENDS/OPPORTUNITIES? – JULY 2017
The advancement of mobile phones, together with the numbers being used, give businesses great opportunities! As a Hotelier, follow this trend! Utilize this trend for your Social Media Marketing! It works . . . it makes you money! American Motel Hotel Brokers, America’s oldest, continuous Hospitality/Lodging Brokerage, altered their marketing and their Offerings for Sale . . . and their Sales have increased and phone calls have practically doubled from Clients.

HILTON LONDON HEATHROW AIRPORT SOLD – JULY 2017
American Motel Hotel Brokers Network European office reports a group from Norway, “Pandox,” has entered into contract to purchase.  It is a 398 room hotel connected to Terminal 4.  Price is 80 Million Pound.

AAHOA HOSTS “INDEPENDENT HOTELIERS CONFERENCE” – JULY 2017
On July 31 at the Hyatt Regency in Dallas, AAHOA will hold their Conference for those that are Independent Hotel Owners….AND….those interested in becoming Independent. The theme of the Conference is “a can’t miss opportunity” for Independent Ownership! With more discussion today about ‘going independent,’ the timing of AAHOA is worth. You can find more details on the AAHOA.com Website.

THIS IS HEADLINE NEWS – JULY 2017
AccorHotels with aggressive acquisitions is surging forward with “home-sharing” market. Accor is merging Squarebreak and Travel Keys into their One fine stay company. This will give Accor in range of 10,000 rental properties.