From the desks of the Hotel News Now editorial staff:
- US, China might roll back tariffs during trade talks
- Stocks jump over trade-war optimism
- F&B investment yields higher margins propertywide
- Local minimum-wage efforts finding success
- How South Korea’s ‘love hotels’ have been reborn
U.S., China might roll back tariffs during trade talks: The U.S. and Chinese governments are considering rolling back some of the tariffs they’ve put in place as the two sides negotiate a possible end to the trade war, The Wall Street Journal reports. The two governments have agreed, at least in principle, to the first phase of many that would end the trade war.
The Chinese foreign ministry said the two presidents are in contact and have been making progress on negotiations. The two were expected to sign the first phase of the agreement once it’s reached at a meeting of Asia/Pacific leaders in Chile, but they have to find a new location after the government in Santiago canceled the meeting because of national protests, the news outlet reports.
Stocks jump over trade-war optimism: After a record closing the day before, stocks rose for the third straight session Tuesday morning as investors grew more confident in a trade deal between the U.S. and China, CNBC reports. Prior to opening, futures on the Dow Jones Industrial Average rose 70 points, with futures rising on both the S&P 500 and Nasdaq Composite as well.
“Strong earnings, more promising economic data and optimism over a resolution on trade with China drove the Dow to all-time highs on Monday, following the S&P 500 and Nasdaq’s new records last week,” the article states.
“The Dow’s year-to-date gain now stands at around 18% after rallying 3.4% the past month. The S&P 500 is up more than 22% this year after surging 4.3% in the past month.”
F&B investment yields higher margins propertywide: Real estate investment trust executives speaking during the “F&B and profitability” at the American Hotel & Lodging Association’s fall F&B committee meeting said making investments in a hotel’s food-and-beverage operations can achieve a return on investment that lifts the entire property, HNN’s Sean McCracken reports.
Thomas Healy, EVP and COO of DiamondRock Hospitality, said having a compelling F&B experience in a hotel’s lobby when guests arrive will elevate how they view the property, which can result in rate premiums. At a property in Chicago where his company made such an investment in the arrival and lobby space, spend per occupied room grew and the entire property saw a 20% increase in booking pace for 2020.
Local minimum-wage efforts finding success: As a way of bypassing the national debate over increasing minimum wage, labor unions and community groups have been finding success in increasing minimum wages by focusing on specific jobs and industries at the local level, The New York Times reports. The organizers are trying to focus their efforts on helping those “at the lowest rung of the economic ladder” to help lift them up into the middle class.
Airline and hotel employees have been a major focus for organizers, who believe the increase in wages “will primarily be borne by visitors and affluent local residents, rather than those with lower incomes,” the newspaper reports.
Critics of this approach, however, say by focusing on specific industries, such as hotels, it is forcing employers to find ways to employ fewer workers, the article states.
How South Korea’s ‘love hotels’ have been reborn: Once popular in the 1980s, South Korea’s short-term, pay-by-the-hour “love hotels” fell out of favor with the country’s more conservative hotel industry as they became associated with “illicit activities and extramarital affairs,” CNBC reports. Su Jin Lee, founder of Yanolja, has found a way to reimagine this segment of the industry and receive a $1-billion valuation following its latest funding round in June.
Lee, who was orphaned, started working at a love hotel when 23 as a janitor, gaining both a steady job and a place to stay, the article states. After an anti-prostitution law passed in 2004, he created an online advertising platform to help hotel owners attract new guests and then launched Yanolja in 2007 as a full booking site.
The company offered renovation services to these hotels and target a new set of guests, the article states. The model would prove popular with young couples in a country where the norm is living with one’s parents until they marry. It also helped budget travelers who need a quick break during their trips.
Compiled by Bryan Wroten.