From the desks of the Hotel News Now editorial staff:
- Euro zone reports record GDP drop
- Consumer spending jumped in June
- Ashford warns of incoming foreclosures
- Host, MGM, Pebblebrook share Q2 earnings results
- UNICEF announces plan to house victims in Mexican hotels
Euro zone report record GDP drop: Shortly after the U.S. reported the deepest gross domestic product contraction on record, the euro zone economy did the same, with those European countries collectively reporting a 12.1% contraction for the second quarter of 2020, according to CNBC.
The worst performing economy within the euro zone was Spain, which was down 18.5%. Germany was down 10.1%, Italy was down 12.4%, and France dropped 13.8%.
Consumer spending jumped in June: While the GDP numbers are grim, there are some signs of hope in the U.S. economy, including a 5.6% increase in consumer spending for the month of June, The Wall Street Journal reports, citing Commerce Department data.
This marks the second month of increased spending following declines due to the spread of COVID-19. The Commerce Department also noted there was a 1.1% decrease in household income for the month.
“June’s spending growth wasn’t large enough to make up for the sharp drop in spending earlier this spring,” The Journal reported. “Compared with February, ahead of the pandemic, spending for the month fell by 7%.”
Ashford warns of incoming foreclosures: Ashford Hospitality Trust President and CEO J. Robison Hays said he fully expects to hand over some of his company’s properties to lenders as it recovers from the downturn, HNN’s Sean McCracken reports.
The company stopped making debt payments months ago, and has sought forbearance agreements with lenders, successfully securing a deal that covers 24 of it’s 116 hotels. But Hays there won’t be success with every hotel and loan.
“It is likely, however, that we will be unable to agree on forbearance terms with all of our loan pools, and investors should anticipate that we may be handing back some assets to lenders in the months to come,” he said.
Host, MGM, Pebblebrook share Q2 earnings results: The second quarter earnings season continues, with two of the industry’s largest ownership groups announcing results along with MGM Resorts’ first report following the elevation of Bill Hornbuckle to CEO.
Host Hotels & Resorts: Host reported quarterly revenue of $103 million, a 93.1% year-over-year drop, with revenue per available room down 93%. The company posted a net loss of $356 million for Q2.
Pebblebrook Hotel Trust: The real estate investment trust reported a $130.9 million net loss for the quarter with a 96.2% drop in room revenues and a 127.8% drop in earnings before interest, taxes, depreciation and amortization to negative $40.8 million.
MGM Resorts: MGM posted an operating loss for the quarter of $1 billion with a 91% year-over-year decrease in consolidated net revenues.
UNICEF announces plan to house victims in Mexican hotels: The United Nation’s Children’s Fun is now funding a program to house Mexican women and children threatened by domestic violence in hotels in that country, Reuters reports. The program is slated to begin in September.
“Nearly 19,000 formal domestic violence complaints were filed in Mexico in June, up from around 15,000 in April, according to government data, though the complaints are widely believed to undercount the true number of incidents,” the news outlet reports.
Compiled by Sean McCracken.