(Bloomberg) — U.K. real estate investors David and Simon Reuben are buying the upscale Surrey Hotel in New York City, in their latest push into U.S. real estate, according to a person familiar with the matter.
The price is less than the $215 million asking price, said the person, who asked to not be identified because the matter isn’t public.
A representative for the Reuben Brothers declined to comment. A representative for the owner of the Surrey Hotel, Denihan Hospitality Group, didn’t respond to a request for comment.
The tony hotel near Central Park is a recreation of the original Surrey, which was built in 1926 and hosted famous people including John F. Kennedy and Bette Davis, according to its website.
The brothers, London property investors, invested in New York City real-estate this year by buying a condo from SL Green Realty Corp. for $170 million, Bloomberg News reported.
This transaction follows three recent financing deals they did worth more than $300 million, including buying the mortgage of the St. Regis Bal Harbour Resort in Miami, as well as a stake in a senior loan tied to the St. Regis Chicago, the person said.
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The Covid-19 pandemic has hit the travel industry hard, including online travel agencies, or OTAs. Yet these were already facing headwinds going into the crisis, argues Bernstein, meaning that investors should proceed with caution.
Analyst Richard Clarke initiated coverage of OTAs with a cautious long-term view on Tuesday.
The fact that “we, lodging analysts rather than internet analysts, are covering the OTAs is in itself telling,” he wrote. “These are no longer 30%+ growth disrupters, but established parts of the travel landscape, in even competition with their underlying product and themselves being disrupted by tech intrusion, notably from Google (GOOGL).”
This leads him to believe that the OTAs’ core business model of hotel disruption and providing metasearch capabilities is slowing for the three main players—
(TRIP)—and that share gains from competitors could “abate or even reverse.”
Revenue from hotels was 23% in the decade ended 2019, but is set to slow to the mid-single digits post-pandemic, Clarke says, with branded hotels wrestling back control of their distribution. Other travel-related experiences, from home rentals to flight packages often carry lower margins, and while selling experiences—from group tours to wine tastings—may be most promising in terms of profit, Tripadvisor is so far the only company heavily invested in this market.
That is part of the reason that Tripadvisor is his only Outperform-rated stock of the group, with a $35 price target. He initiated coverage of Booking with an Underperform rating, with a price target of $1,720, and Expedia at Market Perform, with a $113 target.
With the shares of all three having recovered from their lows, Clarke warns that the stocks are “currently being valued on past glories not future realities …with only Tripadvisor offering any reopening upside.”
While Booking (formerly Priceline) has historically been the strongest performer of the group, he warns that its heavy exposure to lodging means that it will likely suffer the most.
Expedia is facing the same headwinds, but it can offset this to a degree with its business-to-business flight revenues and cost savings.
He’s more upbeat on Tripadvisor because of its ability to leverage experiences, “the final frontier of travel, where it leads,” even as
Google cuts into its core metasearch business.
Booking was up 1.7%, to $2,062.66 in trading Tuesday, and has gained 0.4% year to date; Expedia was 1.2% higher, at $125.98 with a 16.5% rise in 2020; Tripadvisor was up 5%, to $27.40 and is down nearly 10% year to date.
Planning future travel, whether that’s in a few weeks or a few months, is part of the enjoyment for many people. The excitement and anticipation of an upcoming trip can be motivating at work or for kids in school. Travel companies have been working especially hard to encourage travel planning, which also helps to support industry jobs in the process.
Robots, road trips, and hygiene and wellness managers will continue to be part of travel in 2021 as hotels and airlines work hard to reassure travelers that the experience is safe.
To encourage future travel, these companies are providing flexible travel policies and extra incentive to pay for travel now regardless of when you actually take the trip. The anticipation and excitement of a future trip may be the ideal gift for the holidays this year.
The Leading Hotels of the World Stay It Forward certificates
Stay It Forward certificates pack in extra value at a time when hotels, and their employees, may need it most. Hotels are donating 100 percent of the funds from these prepaid certificates to employees facing financial hardships or charities in their communities.
Valid through 2022, the $1,500 certificates include a two-night stay at double occupancy, special onsite experience (like wine blending in Argentina or behind-the-scenes tours of the kitchen at The Ritz London), a year-long membership in the Leaders Club program (normally $175 per year), and 1,500 Leaders Club points (a free night starts at 3,000 points). Participating hotels include Sun Gardens Dubrovnik, Croatia; Paradisus Los Cabos, Mexico; and The Vines Resort & Spa in Mendoza, Argentina.
Six Senses Plan Now, Play Later certificates
Available for purchase between now and Dec. 20, these prepaid certificates come with an additional 20 percent credit that can be used on-property for activities, food and beverage, or spa. Six Senses’ Plan Now, Play Later certificates are valid for three years from the date of purchase at participating resorts around the world. Travelers can choose the amount they want to purchase, starting at $1,000, and the specific property where they plan to use it. Six Senses guests are eligible to earn points in the IHG Rewards Club program, too, adding even more value to these certificates.
Montage Hotels & Resorts Spirit of Now offer
The Montage Hotels & Resorts group is offering a Spirit of Now package that includes a $100 resort credit for each night reserved (as much as $300 for certain suite and residence reservations) in advance and a complimentary upgrade, based upon availability, at check-in. For those that
As a real estate investor, you’re no doubt aware a vacation rental could be a solid addition to your portfolio — especially if you buy one in a prime spot. But is now a good time to buy a vacation home to rent out? Here are the benefits and drawbacks.
Pro no. 1: Low mortgage rates
Mortgage rates have been unbelievably low since summertime. Today, you can get either a 30- or 20-year fixed loan for well under 3% and a 15-year mortgage for well under 2.5%. Low mortgage rates mean lower monthly payments on your property, freeing up cash for other investments and giving you more flexibility.
Pro no. 2: You may snag some deals from desperate sellers
Though some vacation property owners have fared reasonably well this year, others have been struggling. The coronavirus pandemic has really put a damper on travel, and in some parts of the county, tourism has hit record lows. But as an investor, this gives you an opportunity to scoop up discounted vacation properties owners may be eager to get rid of coming off a dreadful season.
Pro no. 3: There may soon be a surge in demand for vacation homes
A lot of people have been stuck working remotely and staying close to home since March. Meanwhile, health experts say it’s possible a coronavirus vaccine will be widely available by mid-2021. If you buy a vacation property now, you may find that once travel restrictions ease and fears subside, there will be a boom in potential guests looking to escape their surroundings and venture out. That could, in turn, put a lot of rental revenue in your pocket.
Con no. 1: Inventory is low
The housing market has been tight this year, with many would-be sellers holding off on listing their homes due to the pandemic and the general economic uncertainty it’s caused. Because inventory is so low, property values are surging, so if you aim to buy a vacation home now, you could end up paying top dollar for it. And that could negate the savings you’d reap by locking in a competitive mortgage rate.
Con no. 2: You could end up settling
Low housing inventory doesn’t just mean inflated prices; it also means you may end up having to settle for a vacation rental that needs a lot of work. And if you’re not handy, you could end up spending a small fortune to hire a contractor for renovations just to make that property marketable.
Con no. 3: Travel restrictions may trip you up
Once the coronavirus pandemic ends, travel bans and quarantine mandates shouldn’t come into play. But now, state-imposed restrictions could leave you struggling to get bookings. Be prepared to endure a period of sluggish revenue if you opt to buy a vacation rental in the near future.
What’s the right move for you?
Clearly, there are advantages to buying a vacation home now, but consider the disadvantages as well. As is the case
Andrew Lewis thinks leasing hotel rooms is so yesterday.SHITTY SCREENSHOT OF THE SEATTLE CHANNEL
Some Seattle City Council members want to buy a hotel to shelter the homeless and then turn that hotel into affordable housing units once the pandemic is over.
To that end, Councilmember Andrew Lewis sponsored a budget proviso that would take $2.5 million from the Emergency Solutions Grant (ESG) program for homelessness assistance to buy a 100-room hotel. But, buying a hotel is a bit more complicated than it sounds at first blush.
According to Lewis and Councilmember Kshama Sawant, who brought forward a similar proposal last week but who is now co-sponsoring this proviso, homeless providers came to them with this idea, and they have already identified potential hotels to buy. The tricky part: though the $2.5 million would potentially cover a down payment on a hotel, the hotel’s ultimate price and maintenance costs are unclear.
Complicating matters further is the fact that the $2.5 million proviso money would come out of Mayor Jenny Durkan’s budget plan to lease 300 hotel rooms during the pandemic. Durkan plans to lease those rooms for 10 months, using $15 million from ESG and CARES Act money. Lewis wants the city to buy one-third of those rooms to “take full advantage of temporary money” for a “permanent solution.”
The council is faced with a dilemma. Should they use the money to pursue hotelling as a long-term solution, or should they only use hotelling in the short-term?
“Hotelling,” as the people are calling it, has been a popular and successful pandemic shelter solution.
According to a KOMO report, “researchers found fewer clusters and outbreaks of COVID-19 among individuals who stayed in hotels than among those who remained in traditional, large-group shelter settings.”
On Friday I asked King County how many COVID-19 cases public health officials recorded from hotel shelters. A spokesperson told me they’re still working on it, so I’ll update this post when I hear back. But in the meantime, since the pandemic began, the Washington State Department of Health recorded 12 outbreaks across homeless shelters. However, in the last week, the DOH reported no outbreaks in homeless communities.
Hotel rooms have been effective at getting people off the streets and into individual rooms. Part of that is hotelling is more attractive than normal shelter options, as the Seattle Times reported, because it “houses people before asking them to get an income or agree to change their behavior.”
Leasing hotel rooms does cost money, of course. King County leased four entire hotels and motels this year. As of mid-September, leasing and operating those hotels cost $12 million, with over $4.5 million spent on rent alone, according to KOMO News. Federal CARES Act funds will cover most of those costs.
Seattle dabbled in hotelling as well, albeit less successfully. As PubliCola reported, the city blew through $3 million of federal funding in one month of a three-month lease on the 155-room Executive Hotel Pacific downtown. That space was
Novato residents blasted Marin County’s proposal to buy a 70-room hotel to convert to homeless housing during a City Council meeting this week.
Some residents urged the city to file a lawsuit to stop it. The Novato City Council expressed some openness to at least exploring that option but first wanted to provide more time for the public to weigh in.
The strong response came just hours after the county Board of Supervisors voted unanimously Tuesday to continue negotiations to purchase the Inn Marin and Suites at 250 Entrada Drive under an expedited timeline that would not include any vetting by the city.
“It’s been my experience that if we want to get folks on board they need a seat at the table, and unfortunately in this situation, no one had a seat much less a table to even sit at,” Councilwoman Susan Wernick said.
The purchase could be approved by the county as soon as Nov. 17, just weeks after the county notified Novato officials in mid-October of the potential sale.
“I’ve spent more time and consulted with more people deliberating the purchase of a new television set than apparently has gone into the purchase of this property,” Novato resident David Gall told the council. “This is a long-term permanent imposition on the city in response to a short-term problem.”
The swift sale is possible through the statewide Homekey program, which launched in July. The program provides $800 million in state grants to counties and cities to buy hotels and motels to eventually convert to permanent supportive housing for homeless residents affected by the coronavirus pandemic. The state law that created the program, AB 83, allows counties to skip local government reviews for these housing projects if they meet certain criteria.
Inn Marin and Suites is one of three sites that the county is considering buying, along with sites in Corte Madera and San Rafael. The property owners had expressed interest in selling the properties to the county as part of the Homekey program.
The Inn Marin property owner, 250 Entrada Drive LLC, is seeking $18 million, though a county appraisal could change the price. About two-thirds of the cost would be covered by Homekey grants, county officials said.
The county plans to operate the inn as transitional housing with on-site services for homeless families for the first year before converting it into permanent supportive housing.
While acknowledging the rapid timeline is not ideal, county planning manager Leelee Thomas said the state grants must be used before the end of the year and properties must be readied for occupancy within 30 days after the purchase.
“A property needed to be fairly ready to be occupied because you have a limited time between closing escrow and having people move in,” Thomas told the council.
The county was also not expecting to be able to purchase the Novato hotel until it was notified by the state on Oct. 10 that it received tentative approval for more grant funds.
Punches were thrown before a meeting with officials and residents and their advocates at the Park View senior high-rise in Wilmington, forcing its cancellation. Residents wanted to air grievances over conditions at the WHA property.
Delaware News Journal
At a Tuesday night meeting, New Castle County Council plans to discuss and vote on a plan to purchase the Sheraton hotel on Airport Road and convert it into an emergency homeless shelter, according to the meeting’s agenda.
The Sheraton Wilmington South, located just off Exit 5A on I-95, is up for auction beginning Monday, according to a web listing. Bidding starts at $5.5 million. The auction ends Wednesday.
The county wants to use funding from the more than $190 million it has in “reserve allocation” it has from the more than $322 million it received in CARES Act funding during the coronavirus pandemic.
New Castle County wants to purchase the Sheraton Wilmington South Hotel and use it as an emergency shelter. (Photo: Daniel Sato, The News Journal)
The county plans to purchase the hotel and operate it as “emergency shelter and temporary housing for our most vulnerable residents, and others as deemed necessary by the Department of Community Services, during and in response to the COVID-19 pandemic.”
The hotel, which just underwent a $6.4 million renovation, has 192 rooms and the property is more than six acres.
Bearish sentiment on airlines may be running deep. But some analysts are making a case for the stocks, arguing there’s value in a lagging sector that has a postpandemic recovery path.
Citigroup analyst Stephen Trent reiterated Buy recommendations on several domestic and foreign airlines Wednesday, including
Delta Air Lines
The rationale for airline stocks is getting tougher as it sinks in that the recovery will take longer than hoped. “We are looking at a tough winter with cash crunches,” Trent writes. And it’s hard to be positive on a cyclical sector that isn’t participating in the broader cyclical rally that has lifted transportation and industrial stocks.
“But at a certain point,” he writes, “there’s scarcity value in a lagging sector with post-pandemic legs…the challenge being when and where things normalize.”
Global traffic patterns point to a mixed and uneven recovery. Air travel in the U.S. has improved a bit lately, with more than 1 million passengers going through security checkpoints on Sunday, the highest levels since the early days of the pandemic in mid-March. But that is still well below daily averages above 2 million passengers last fall, and traffic—which fell back to 662,000 passengers on Tuesday—isn’t showing a sustained rebound.
Total traffic isn’t the only headwind—it’s the fares and revenue composition, too. The U.S. recovery is being fueled by leisure and small-business travel, while large-scale corporate and international travel remains severely depressed. Consumers taking short hops to see friends and family may be filling planes domestically, but it isn’t helping the full-service legacy carriers that built route structures based on higher-margin business and international travel.
Global air travel remains broadly depressed. Domestic traffic in China is now higher, year over year, and Latin American markets like Brazil are looking stronger. But travel to European destinations is stagnating. Ryanair, Europe’s largest airline, recently said it would maintain capacity at 40% of last year’s levels through the first quarter of 2021, well below prior estimates of 60% of capacity. Travel restrictions by the European Union “forced” the airline to trim its schedule, Ryanair CEO Michael O’Leary said.
Country-specific travel restrictions remain a big hurdle. Canada, for instance, recently loosened some restrictions, allowing extended family members to visit for the first time since the pandemic started. But the rules remain onerous: Visitors must commit to staying in Canada for 15 days, present a detailed quarantine plan, stay isolated for 14 days, and have written authorization for the visit from Canadian immigration authorities. “Until further notice, most foreign nationals cannot travel to Canada, even if they have a valid visitor visa,” the Canadian government said.
Airlines are cutting their cost structures by 30% to 40% to adjust to lower demand, Trent writes. But the big question remains: When will a sustainable recovery take hold?
This winter marks North America’s first full cold season in the midst of COVID-19. Where the onset of the pandemic abruptly closed many heliski lodges last March, those same lodges have been working for months to put new health and safety protocols, according to the most updated requirements from medical experts, in place to welcome guests back this winter.
One of the emerging trends in the industry is an option to buy out the entire heliski experience for you and your chosen bubble of people. Where you would normally be sharing a helicopter and the lodge with other groups, and might even be skiing with people outside your party, some operations are now emphasizing full lodge buyouts to give their guests the most comfort and assurance possible. These are some of the once-in-a-lifetime opportunities for the most luxurious ski vacations on offer.
Mica Heli-Skiing is widely known as the most luxe heliski operation in the industry, offering small-group skiing in a spectacular alpine environment that spans over 500 square miles of mountains. The modern-crafted lodge, perched above Kinbasket Lake, hosts only 20 guests max, boasts two rooftop hot tubs looking out over the lake and its surrounding peaks, a ritzy bar, fireplace lounge, and rotating art on the walls from its artist-in-residence program. The dining room’s row of floor-to-ceiling windows showcases alpine sunsets best enjoyed over Mica’s signature innovative gourmet meals made with seasonal and locally-sourced ingredients.
Custom lodge experiences are nothing new for the seasoned guides and savvy staff at Mica, who’ve already created such experiences as bringing in a five-piece orchestra that composed and performed a piece for a guest during their stay, building backflips from snow outside the lodge for one keen group to hit after après, and flying a grand piano onto a glacier. Mica has also been offering full lodge buyouts for guests since its inception, making it practiced in the industry.
“We have several guests that book out our lodge exclusively and we work closely with them to create customized experiences that are all about them,” said Nicole Frico, CEO of Mica Heliskiing. “If they want to ski hard and fast then that’s what we do, if they want to have lunch on a glacier we work with them to make it happen. For us it is all about making sure they have the time of their lives with the people they care about most.”
Great Canadian Heli-Skiing
As a family-owned and -operated lodge since 1988, Great Canadian Heli-Skiing prides itself on being the innovator of small-group heliskiing. All of its packages in any given winter are skied in small groups of four guests or less and include unlimited vertical (no extra vertical charges). Its timber-frame lodge offers rare drive-in access, situated as it is on Rogers Pass on the doorstep of Glacier National Park (which frequently sets records for the snowiest place in the country), and also
35,000 North American Vacation Rental Properties Now Eligible for Easy Payment Plans
Emeryville, CA –News Direct– RedAwning
RedAwning, the leading hospitality platform for short term rentals, and Affirm, the better way to buy, today announced a new partnership to enable guests to book a vacation rental now and pay later, even after staying. Affirm offers flexible and affordable payment plans so that guests can rent their dream home at their dream destination, and not have to worry about paying for their trip all at once. RedAwning’s property collection, covering every major vacation destination in North America, represents the largest collection of vacation rental properties ever available on a pay over time basis. Property owners and managers participating in the RedAwning Network are already participating in this new program automatically with no action required.
“We know vacation rental stays can be a large purchase for many travelers, so we are excited to offer this industry-first approach,” said Tim Choate, Founder & CEO of RedAwning.com. “Demand for vacation rental travel is increasing and our addition of a pay over time option enables even more guests to travel, rent a nicer home, or take a longer trip. This new offering further expands on our industry leadership for property owners and managers too.” RedAwning participating property owners and managers generate more revenue for less work, with their properties presented everywhere guests shop for travel online.
Affirm adds to RedAwning’s long list of exclusive, industry leading benefits for property owners and managers to help them generate more revenue with less work. These include free professional photography with Meero, pricing optimization, distribution everywhere guests shop for travel, Amazon Prime Now delivery mapping, a mobile app, a web portal, 24/7 Reservations and Guest Services, payment processing with Stripe, Amazon Smart Concierge, and much more.
To learn more about RedAwning’s industry-leading marketing, reservations, and hospitality platform, just visit www.redawning.com/list.
Financing subject to eligibility. Affirm loans are made by Cross River Bank, Member FDIC.
RedAwning is the leading platform for short term rentals. RedAwning presents the world’s largest collection of vacation properties to guests wherever they shop for travel. With over 35,000 properties represented on behalf of thousands of property owners and managers, RedAwning covers virtually every leisure destination in North America, and includes a comprehensive layer of services and support with every stay. RedAwning is the largest single U.S. supplier to every major travel website, including Booking.com, Expedia, HomeAway/VRBO, Airbnb, and the new Google Travel. RedAwning also operates exclusive vacation property booking websites, including RedAwning.com for travelers, and TravelPro Rentals, which enables 20,000 travel agents to book vacation properties. RedAwning has been a leading innovator in the vacation rental industry since 2010, with a mission to redefine the customer journey for guests, hosts and property managers alike, and to drive new approaches that make the booking and staying experience at short term rental properties more consistent, easier, safer and better for all. To browse and book the RedAwning Collection, visit www.redawning.com.