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GLOBAL HOTEL ROUNDUP
- Hilton-Starwood Feud Heats Up
- Marriott Loses $466 Million in Third Quarter
- 11 Hotels Destroyed in Sept. 30 Sumatra Quake
- Hawaii Hotels Lose $238 Million
- Overnight Stays Down Sharply in Spain
- DiamondRock Pays Off $33M on 2 Mortgages
(NEW YORK, NY) -- A six-month-old civil lawsuit filed by Starwood Hotels & Resorts against Hilton Worldwide has triggered a federal grand jury investigation expected to take two months to complete.
Investigators are trying to determine if there is enough evidence to criminally charge Hilton corporately and several of its former executives individually for allegedly stealing 100,000 computer-copied pages of confidential documents from rival Starwood Hotels & Resorts in 2008.
Starwood sued Hilton on those allegations in April 2009. That civil case is pending.
The alleged stolen documents were used by Hilton to develop its own luxury brand to compete with Starwood's successful W chain.
The Starwood lawsuit halted the development of Hilton's Denizen brand, the company's answer to the W chain and its first entry into the boutique-hotel category. Today Starwood operates roughly 30 W hotels, including the W San Diego.
Hilton has been renamed and is now owned by Blackstone Group, a private-equity firm in New York.
The Starwood executives named in the grand jury investigation, but who are not charged with any crime, are Steven R. Goldman, until recently president of Hilton's Global Development and Real Estate division; Ross Klein; and Amar Laivani.
Klein and Laivani remain with Hilton's Luxury Brands group. Goldman is on leave and not expected to return to the company, according to The Wall Street Journal. The three executives defected to Hilton in June 2008.
Hilton has denied any wrong doing and calls the Starwood suit meritless. The U.S. Attorney's office in Manhattan is handling the federal grand jury investigation.
Please see earlier articles:
("Starwood Wins Round One Against Hilton in Multi-Million-Dollar Corporate Espionage Lawsuit , April 23, 2009.")
("Starwood Suit Alleges Hilton Stole Over 100,000 Trade Secret Files on New Brand, April 17, 2009.")
(BETHESDA, MD) -- Marriott International, Inc. (NYSE:MAR) lost $466 million from continuing operations in third quarter 2009. In the same 2008 period, the global hotel chain showed a profit of $94 million.
The company's EPS guidance for the 2009 third quarter, disclosed on July 16, 2009, totaled 9 cents to 14 cents.
Reported diluted losses per share from continuing operations attributable to Marriott shareholders was $1.31 in the third quarter of 2009 compared to diluted EPS from continuing operations attributable to Marriott shareholders of 25 cents in the third quarter of 2008.
J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, says, "Revenue per available room across our North American system declined less than expected during the third quarter as leisure travelers responded to attractive promotions and great values in our hotels. With solid cost controls, our hotels translated better than expected occupancy rates to stronger than expected fee revenue and earnings."
(PADANG, WEST SUMATRA) -- The Sept. 30 earthquake damage to single-family shelter and commercial hotels in the West Sumatra province of Padang totaled an estimated $213 million (Rp2 trillion) as of Oct. 10. The death toll stands at 704 and is expected to reach 800, according to local medical officials.
A number of hotels, restaurants and their supporting facilities were also destroyed. Of the 47 star-rated hotels in West Sumatra, 24 were damaged, of which 11 were destroyed.
In the magnitude-7.6 earthquake, about 295 victims have remained missing, 746 others were seriously hurt and 1,344 slightly injured.
The quake also caused major damage to 101,653 houses, moderate damage to 48,966 houses, and minor damage to 49,026 houses. In Padang city alone, 54 schools were seriously damaged, 377 moderately damaged, and 351 slightly damaged, according to the West Sumatra disaster mitigation office:
(1 Indonesian Rp or rupiah = 0.000106 U.S. dollars)
(HONOLULU, HAWAII) -- The Hawaii hotel industry lost an estimated $238 million in total revenue this summer, as compared with summer 2008, according to the most recent Hospitality Advisors and Smith Travel Research survey.
The figure includes revenue losses that came from room, food and beverage, and retail sails. When compared with the record summer of 2006, industry losses totaled $374 million.
Hawaii hotel occupancy fell for the 18th straight month in August. As compared with the same month last year, hotel occupancy was down 3.5 percentage points to 70.9 percent.
(However, September occupancy was up. Please see, "STR Reports U.S. Hotel Performance, Oct. 5, 2009.")
Room rates also fell in August, down 15.9 percent to average $177 a night. The reduced rates led to a 19.9 percent decline in revenue per available room, which average $126 statewide.
The August decline "capped off the weakest summer season" that Hawaii has experienced since the hotel survey began, said the Honolulu-based Hospitality Advisors.
Hotel occupancy for June, July and August averaged 68.1 percent, compared with occupancy in the mid-80 percent range in summer 2006.
Hotel occupancy, room rates and revpar for the four main Hawaiian islands in August were as follows:
- Oahu occupancy slipped 2.1 percentage points to 78.3 percent, room rates fell $27 to $149, and revpar dropped $25 to $117;
- Maui occupancy dipped 2.9 percentage points to 66.2 percent, room rates decreased $57 to $231, and revpar was down $46 to $153;
- Kauai occupancy declined 8.4 percentage points to 65.8 percent, room rates dove $27 to $190, and revpar was down $36 to $125; and
- Big Island occupancy was down 6.3 percentage points to 57.2 percent, room rates slid $18 to $193, and revpar plunged $24 to $110.
(MADRID, SPAIN) -- The rain is falling in Spain these days - specifically on the hospitality industry.
Spanish hotels registered 36.2 million overnight stays during the key month of August, a 5-percent drop compared with the same period in 2008, according to the National Statistics Institute. A decline in the number of foreign visitors is the chief reason behind the weaker performance.
It was fourth straight month of falling overnight stays since a 2-percent increase in April when Easter Week vacationers flocked to traditional seaside resorts. .
Figures compiled by the Spanish Association of Travel Agents showed 6.7 million visits by foreign tourists during the month, an 8.1-percent decrease compared to a year ago.
In contrast, Britons were traveling to competing, non-European destinations such as Egypt and Turkey, Spain's most important rivals in the Mediterranean region, because of the declining value of the pound against the European currency, according to Joan Molas, president of the Spanish Confederation of Hotels and Tourist Accommodations.
Molas says that while the number of overnight stays by visitors from Britain, Spain's largest generating market, was down 16 percent over the summer, the number of overnight stays by visitors from France and Italy fell 20 percent and 27 percent, respectively.
(BETHESDA, MD) -- Hotel owner DiamondRock Hospitality Co. (NYSE: DRH) has paid off a $28 million mortgage on a hotel in Kentucky, its latest step toward making itself a capital structure with no corporate debt, according to the Washington Business Journal.
The Bethesda-based real estate investment trust retired its mortgage on the Griffin Gate Marriott in Lexington, Ky. without penalty. It also plans to pay off a $5 million mortgage on its Bethesda Marriott Suites using cash on hand in the fourth quarter.
DiamondRock says those moves, combined with others undertaken in September, will leave it with no debt maturities until late 2014. DiamondRock raised $57.3 million in the third quarter through a secondary stock offering, with proceeds to be used to pay down debt.
DiamondRock currently owns 20 hotel properties, including the Westin Boston Waterfront, the Chicago Marriott Downtown and the Marriott Frenchman's Reef Resort on St. Thomas in the Virgin Islands.
In a prepared statement, DiamondRock CEO Mark Brugger says, "Although the third quarter results reflect the continuing challenges in today's operating environment, we were pleased that our hotels continued to gain market share and our asset managers, working in concert with our operators, did a solid job implementing cost containment measures."
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