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UK Travelers Worry That an EU Exit Will Make Holidays More Expensive

They worry about costs because they most certainly will rise. Very good news for U.S. travelers, though.

Jason Clampet

Rachel Holdsworth has the Brexit blues. The 38-year-old London resident is anxious that her already expensive planned Discount Holidays © holiday to Norway is getting pricier with each passing day. The pound is sinking under the weight of worry that her fellow subjects will vote to quit the European Union1.

How much I pay will be entirely dependent on the exchange rate, says Holdsworth, who will travel in May. Norway s not cheap at the best of times.

Her distress is shared by other Britons slogging through winter as their thoughts turn to summer vacations. Sterling has fallen against every developed-nation rival this week, raising the price in pounds of everything from Mickey Mouse hats at Florida s Disney World to a glass of Cote Rotie in Paris to a Kayak trip in the Norwegian fjords. The pound has sunk to its weakest since 2009 against the dollar and is almost 12 percent below its five-year average. It s still about 2 percent stronger than its five-year average versus the euro.

If you are anything like me and have a U.S. Discount Holidays © holiday already in the diary then you are hoping that the near-term turmoil recedes sooner rather than later, said Jeremy Cook, chief economist at the London-based currency exchange firm World First U.K. Ltd.

Too Late

It may not at least not until summer officially begins. The referendum on the U.K. s EU membership is set for June 23, suggesting even a vote for remaining would come too late for the pound to recover its losses by the time traveling begins in earnest. The pound is the worst performing major currency against the dollar this year, tumbling more than 5 percent. Traders are betting that even more extreme price swings are to come, pushing a gauge of volatility to the highest level since 2010.

If voters reject EU membership, the world will get even costlier for pound earners. Sterling, now about $1.40, would plunge to $1.35 or below within a week, levels last seen in 1985, according to 29 out of 34 economists surveyed by Bloomberg News. Most don t see the pound recovering the bulk of its losses even by the autumn. Pro-European campaigners this week cited Goldman Sachs Group Inc. s warning that the currency may fall 20 percent on a Brexit in their lobbying material.

Tough Backdrop

The debate creates a tough backdrop for summer 2016 U.K. leisure travel, HSBC Holdings Plc strategists said in a report on Wednesday. On the other hand, the 400 million-plus residents of the other 27 EU countries would find it cheaper to ride in the London Eye or take in a West End show.

The weaker pound will certainly make London a more attractive city-break destination for shopping and culture for passengers from Europe, said EasyJet Plc spokeswoman Anna Knowles. Martha Goncer, a 62-year-old teacher from Michigan who plans to visit the U.K. in the summer to visit her daughter, said she was happy to hear the news about the pound falling and our U.S. dollar being worth more.

We will plan to do the touristy things while we are there, and with the savings we will be able to include another sight or two in our itinerary, she said.

Costlier Travel

Still, Groupe Eurotunnel SE, which runs trains under the English Channel, dropped the most in almost three years on Tuesday with traders citing fears of the U.K. leaving the EU.

EasyJet Chief Executive Officer Carolyn McCall told the Sunday Times this month that a British exit would propel the cost of air travel and potentially mean a return to when flying was reserved for the elite. She was among the executives who wrote a letter this week advocating continued EU membership. Meantime, Ryanair Holdings Plc, the U.K. s biggest airline, is taking out newspaper advertisements urging voters to stick with the EU.

We re going to actively campaign on this issue for the next three or four months, CEO Michael O Leary said in an interview Wednesday. We re going to bore everybody to death.

We will also be campaigning with our passenger base, trying to influence people to vote in favor of Europe.

With assistance from Benjamin Katz.

This article was written by Eshe Nelson, Bill Lehane and Kristine Aquino from Bloomberg and was legally licensed through the NewsCred publisher network.

UK Travelers Worry That An EU Exit Will Make Holidays More Expensive
UK Travelers Worry That An EU Exit Will Make Holidays More Expensive

References

  1. ^ quit the European Union (skift.com)

7 Hotel Industry Experts on What It Means to Be Relevant Right Now

Brands refreshes are nothing new in the hotel industry, but what qualities make a hotel relevant today? Several industry experts weigh in on things like technology, design and how consumer behavior affects the ways in which trends get implemented.

Alexandra E. Petri

The reinvention of and refreshing of a brand s image is no new phenomenon, but there are some key markers making this particular stretch a particularly interesting competition to watch.

The difference between having this conversation 20 years ago and now is the fact that the pace of change is exponentially faster, says Peter Yesawich, vice chairman, MMGY Global.

The other reason we re really excited is that the industry is more focused on this now that for the first time I think in a long time, the owners, operators and developers of hotels are beginning to realize that the next generation of customers is really quite different than the generation of customers that they traditionally catered to. Skift spoke with hotel industry experts to assess what it means to be relevant in today s hotel industry and what are some of the factors driving those changes.

Ron Vlasic, regional VP, Kimpton Hotels: I think that there are two very distinct type of hotels in the U.S. right now. There are great, high-design hotels, and then there are generic hotels that get people in and get out. There s no attention to the style, and that s an unfortunate experience in my opinion when there are so many great hotels that really offer more of a residential stay or something that has a unique touch or flavor to it that is memorable.

Frances Kiradjian, founder, Boutique & Lifestyle Lodging Association: What is really important to a customer is taking care of them before they even leave their home or their offices.

And really connecting with their client, so they can get excited, know about the destination, be aware of offers and order things or request things so they are more organized or more comfortable when they arrive.

Paula Benesch, partner, P3 Design Collective: There are always new things that all these different brands are trying out, and I think it s very good they do try it out. There are things like less closet space, more open concept things in the room. They ll put things in place, try it out, see how it works, and then adapt. They re trying to get more creative on their options depending on the brand and the traveler and what suits that particular hotel. That s refreshing to see.

Bjorn Hanson, clinical professor, NYU Preston Robert Tisch Center for Hospitality and Tourism: People are looking for time efficiency, and often those core things remain at the center of hotel choices. Again, it s become an issue of negatives holding back some of the demographics from embracing some brands. Some brands don t have congregation areas in lobbies and good high-speed internet access in the lobbies. That s a negative rather than it being a plus. It s become more expected.

It s more a failure to keep up with trends.

Jennifer Gribble, vice president, Americas, Discount Holidays © Holiday Inn Express: What we at Discount Holidays © Holiday Inn Express also noticed is our guests aren t looking for our public spaces to really facilitate social connections per se, but they really look for the design to help enable it. As an example, we have a lot of variety of seating looks in our public space now. We have communal tables; we have two-tops and four-tops and different types of seating arrangements so that guests, when they want to, can connect with one another. There s power down there if they d prefer to work down there. It s kind of solitary, but in a more open social environment.

Matthew Carroll, vice president, global brand management, Marriott Resorts: Marriott is focused on converting from the shower/tub combinations to a much more upgraded bathroom experience with walk-in showers. We re also looking to move from carpet to hard-surface floors. Then a much more modern, locally-inspired design aesthetic. I think one of the things that, not unique to Marriott, but I think unique to brands these days is, how are we responding to technology and how that s impacting customer behavior in the room. Obviously, that s a big focus for us, and how these designs get implemented.

Peter Yesawhich, vice chairman, MMGY Global: The more elusive piece, and it s the one that I think would make the difference to a good degree, is the attitudinal piece.

It s really more of the personality. That puts you into things like you know brand image. Takes you into things like the kinds of people that you see there, the kinds of customers that patronize the place. It s reflected in the compounding of the advertising. All of these ways to be kind of accessorize other two critical pieces, which is the ambiance, or the design and the furnishings, and the technology piece.

Holiday Inns in Rural Canadian Towns Attract Private Equity Firm

Cerberus Capital Management and Westmont Hospitality Group are betting on small Canadian hotels in regions hit hardest by the slide in oil prices. The private equity firm and lodging company are buying 22 hotels in seven Canadian provinces from Fortis Properties, the real estate arm of gas and electricity provider Fortis Inc., for C$365 million ($278 million), according to a person with knowledge of the transaction. Citigroup Inc. and Brookfield Asset Management Inc. will provide debt for the deal, said the person, who asked not to be identified because the terms aren t public.

Fortis announced in July an agreement to sell the hotels without identifying the buyers. Nora Duke, head of the real estate unit at the St. John s, Newfoundland-based company, declined to comment beyond the July press release. Anthony Messina, president of Westmont s Canada unit, didn t respond to a request for comment. John Dillard, a spokesman for New York-based Cerberus, and representatives from Citigroup and Brookfield declined to comment. Cerberus and Westmont are buying the hotels at a time when Canadian economic growth is slowing. About half of the assets are in Alberta and Newfoundland and Labrador, two provinces reliant on oil and gas where local energy companies are cutting employees and scaling back expansion plans.

The Fortis hotel portfolio includes a 93-room Discount Holidays © Holiday Inn Express in Medicine Hat, a town of about 60,000 people in Alberta where many residents are employed by one of the hundreds of companies that service the energy industry. Fortis also owns the Greenwood Inn, a 102-room hotel in Corner Brook, Newfoundland, a 20,000-person town on Canada s east coast in a province with a handful of offshore oilfields.

Oil Plunge

Low oil prices are set to slow Alberta s economic growth for years to come, according to the Conference Board of Canada. The province s gross domestic product is likely to contract by 1 percent this year, and the number of people migrating to Alberta for work will slow to 31,000 annually, less than half the average intake over the past four years. In Newfoundland, Husky Energy Inc. announced last year it was delaying a C$2.8 billion ($2.1 billion) expansion in the province.

Cerberus, which oversees about $25 billion in assets ranging from amusement parks to debt issued by the bankrupt oil and gas company Samson Resources Corp., manages an array of real estate holdings around the world. The company has taken stakes in extended-stay hotel operator Chatham Lodging Trust and resorts in Hawaii. In recent months, the New York-based firm has snapped up soured property loans from Royal Bank of Scotland Group Plc. Fortis is selling the hotels as part of its real estate strategic review that it started a year ago. It marks the last stage in divesting its property holdings after selling 2.8 million square feet (260,000 square meters) of office and retail buildings to Slate Office REIT for $430 million in June.

Fortis will use the proceeds to pay down debt and focus on its core business, Chief Financial Officer Karl Smith said on a second- quarter conference call. Westmont owns more than 500 hotels spanning three continents. The closely held company s properties range from budget accommodations to luxury hotels under brands including Fairmont, Hilton, Comfort Inn and Discount Holidays © Holiday Inn Express.

With assistance from Rebecca Penty in Calgary.

This article was written by Sarah Mulholland and Katia Dmitrieva from Bloomberg and was legally licensed through the NewsCred publisher network.

<b><i>Discount Holidays ©</i></b> Holiday Inns In Rural Canadian Towns Attract Private Equity Firm