bhrubin

High nightly rates tell you what consumers PAY not what the hotels get in PROFITS. High nightly rates are accompanied by higher costs/taxes/fees in all sorts of ways, let alone the property costs involved in higher hotel rate locations. Europe may have high rates (thought the europ drop has revealed many to be illusory to some extent), but their hotels also have higher taxes and property costs--causing European hotels as a sector to be much less profitable than those in other regions, including the most profitably region: the USA.

There are many sources:

http://www.statista.com/statistics/2...ide-by-region/

http://www.bloomberg.com/news/articl...ry-real-estate

http://www.statista.com/topics/1102/hotels/

Dieuwer

So thanks go the greed of Europe's governments, traveler are getting the short end of the stick when staying in a property in Europe? I always been dismayed at the poor value proposition of Europe: tiny rooms for an outrageous price.

bhrubin

It isn't just Europe where more expensive hotels rooms don't necessarily translate to more profitable hotels! There are plenty of expensive hotels in the USA and abroad where that can be true. Europe's older hotels are expensive but have smaller rooms because of the fact that they're older (and that wasn't so unusual in the past)! These older hotels have to refurbished to bring them to modern standard, and that refurbishment costs a lot of money--which then gets further passed onto consumers. Not sure what the big issue is here? Nor do I understand what Europe's governments have to do with this issue, since NYC's most expensive hotels are also not the most profitable. More expensive hotels ALWAYS tend to be higher cost of living locations with higher property values and therefore higher costs to maintain, staff, and refurbish. Nothing new here, nothing surprising here.

Dieuwer

This is not just not true. The same quality hotel room in say Madrid goes for a much lower nightly rate than that in Amsterdam. Or the same quality room in say Budapest goes for a much lower rate in than that in Paris.
It has nothing to do with "refurbishing". But everything to do how large the government wants its cut. If the French government demands $100/night in taxes, while the Hungarian government wants $10/night, then obviously from a base perspective, the room in Budapest will be cheaper.

bhrubin

You are determined to find the gov't responsible, but the overall hotel room rates are determined by supply and demand, not gov't policy. The French gov't doesn't collect $100 per night in taxes...unless your room rate is high enough, that is, such that the $100 is negligible to the overall room rate. Hotel room rates are higher in Paris overall than Budapest because demand is higher for hotels in Paris than Budapest.

We can agree to disagree. But this back and forth has little to do with investor realities in what Starwood should and will do to improve its stock valuation.

Land-of-Miles

Indigo is simply a superb proposition. Every one of the indigos I have tried has been excellent. Perhaps rebranding W as Indigo Plus would be the way to go. I would always rather stay at an indigo than a W.

I still think it is fanciful to think that Starwoiod a company with no real leadership or strategy will be in the driving seat of any acquisition play.

bhrubin

I respect that you prefer Indigo. I wonder, though, how often you stay at Indigo vs W?

While I also like Indigo and have stayed at several (San Diego Gaslamp, Asheville, RDU Airport, and Boston most recently), I also stay at many W locations (San Diego, Westwood, Hollywood, San Francisco, Boston, DC, London, etc).

I think of W as being more upscale than Indigo--with more amenities, better/higher end locations, and certainly more "lifestyle" with the club energy of the W lobby scene. And room rates to match, almost always. While I think a few Indigo hotels may be better than W (San Diego, for instance), I generally would put W a notch or two above Indigo.

I still think it is fanciful to think that Starwoiod a company with no real leadership or strategy will be in the driving seat of any acquisition play.[/QUOTE]

Just because there has been a change in leadership doesn't mean there isn't leadership at Starwood. Aron is the CEO that likely will take Starwood through the wheelings and dealings of any potential acquisition and/or sale. Until the next guy does. Speculate away.

http://www.hotelnewsnow.com/article/...e-for-Starwood

http://www.hotelnewsnow.com/Article/...rategic-review

kavok

With a SPG/IHG merger, I also see most of the SPG brands continuing on.

On the budget side, Candlewood, Staybridge, and Holiday Inn Express all have their place, and I would see those IHG brands continuing on in their current form. It would provide a nice expansion of SPG into the budget/lower-mid market areas.

As mentioned in previous posts, I would guess the Four Points and Holiday Inn brands would be merged (not sure which of the brand names would be retained), as they essentially serve the same purposes. In a similar fashion, I would also expect the IHG Crowne Plaza hotels to be rebranded as Sheratons, with hopefully a minimum quality threshold in place. Both Crowne Plazas and Sheratons serve essentially the same purpose.

I could also see the few Even Hotels becoming Elements, but not sure what to think about the future of Indigo hotels. I would expect the IHG Hualuxe and IC brands to continue on in their existing form.

bhrubin

^^^

nongsom

Totally agree with you.
And Ambassador/Royal ambassador program?
IHG reward club have upcoming status for 75 night stay same as plat75 but not clear in benefits.
I hope if they merged poorest ihg customer service center and brg would eliminate

craigthemif

No matter what happens, hopefully it's Starwood doing the acquiring.

Otherwise Lifetime Gold/Platinum will be "enhanced" away by the new owner. Just ask former BMI lifetime Golds how long that lasted after the BA takeover...

nongsom

So all of us need another airline elite experience after M&A of airline.
To prepare for some enhancements.

DenverBrian

More speculation on an IHG/SPG merger: It's wishful thinking to believe that brands like Sheraton and Four Points would survive and/or brands like Holiday Inn, HIX and Staybridge Suites would be retired. If for no other reason than cost.

If I'm CEO at SPG, do I approve rebranding 4,000 Holiday Inns and Expresses...or 2,000 Four Points and Sheratons?

Not to mention the goodwill value and awareness penetration of Holiday Inn vs. Four Points. I put the brand awareness of Four Points right about there with Baymont Inn and Radisson...in other words, low. Heck, Ramada Inn probably carries more residual brand awareness than Four Points.

bhrubin

I think you have a good point to consider with Four Points, though only those with market research can ascertain whether the Holiday Inn brand is successful compared with Four Points at attracting customers. I generally think of Four Points as being nicer than Holiday Inns.

But not Sheraton. That is quite a brand name that is recognized world-wide. That there is quality inconsistency across the Sheraton brand doesn't diminish its brand value--especially since it's still probably (and generally) better than that of Crowne Plaza.

TTT

Are there real synergies with collapsing a brand? What sort of overhead is there on brand that would be saved by merging HIE with FP, for example?