Hotels woo travelers with brand changes
In September a pedestrian walking on Central Park South in Manhattan might have noticed the name Jumeirah being stripped from the marquee of the Essex House, a luxury hotel. The property became a JW Marriott. Earlier it was a Westin.
The Essex House is not alone changing its brand affiliation. As the recession has eased and hotel occupancy rates have improved, hotel owners have been increasingly changing their affiliations from one brand to a competitor’s — what is known in the industry as reflagging.
Nearly 2,500 hotels were reflagged in 2011, according to statistics from Smith Travel Research, a research firm in Henderson, Tenn. While that represents just a 5 percent sliver of all U.S. hotel properties, it was still a 39 percent increase from 2010.
"In the aftermath of the recession, travel patterns have changed," said Bjorn Hanson, divisional dean and clinical professor at the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University. "Owners think about repositioning, with some trading up, others forced to trade down."
Five-year leases on properties opened in 2006 and 2007 are expiring now. Typically hotel brands do not own the hotels. Hotels may have a contract with a management company, or a hotel owner may have a franchise agreement.
"The new brand promises either lower fees or offers more flexible standards that provide the hotel with ways to be more efficient or (have) greater reach in a market," said Henry Harteveldt, chief research officer and co-founder of the Atmosphere Research Group in San Francisco.
Operators reflag, he said, to take advantage of benefits they are not getting from a current brand.
Manufacturers weigh new emissions rules
LOS BANOS, Calif. » The Morning Star Co.’s three plants in California emit roughly 200,000 metric tons of carbon dioxide into the atmosphere each year — about the same amount as the Pacific island nation of Palau — as they turn tomatoes into ketchup, spaghetti sauce and juice used by millions of consumers around the world.
Beginning Jan. 1, under the terms of a groundbreaking California environmental law known as AB 32, Morning Star and 350 other companies statewide will begin paying for those emissions, which trap heat and contribute to global warming.
Companies are trying to figure out how this will affect their bottom lines and have lobbied state regulators to minimize the costs. In the meantime they are weighing their options. Should they stay and adapt or move operations elsewhere? Should they retrofit and innovate to reduce emissions? Should they swallow the regulatory costs or pass them on to customers?
Each company’s calculus depends on its particular circumstance. Morning Star, a top producer in a $926 million industry, has to be near the tomato fields of California’s Central Valley, so relocating was never an option. Its biggest question is how to handle the extra costs.
About 600 facilities with hefty emissions are covered by the Global Warming Solutions Act of 2006. Oil refiners, electric utilities and cement makers, whose greenhouse-gas output totals in the millions of metric tons annually, are the biggest. But overall, dozens of industries are affected.
Hedge funds shine in Greek debt buyback
Greece wanted to retire some of its debt by buying back its bonds at a deep discount. A senior executive at Deutsche Bank proposed that Europe use a legal mechanism that would force hedge funds to sell at a lower price than they might voluntarily accept.
But with the funds and a powerful lobbying group warning of a market crisis, European officials rejected the hard-line approach. When the results were tallied Dec. 12, Greece had reached its target to retire about $27 billion of its debt.
The bigger winners, though, were hedge funds, which pocketed higher profits than many had expected, in yet another Greek bailout financed by European taxpayers.
Windows 8 sales lag in shaky PC market
It used to be that a new version of the Windows operating system was enough to get people excited about buying a new computer. Not this time.
Windows 8, the latest edition of Microsoft’s software, failed to pack shoppers into a Microsoft store in a mall in Washington state last week, at a time when parking lots were overflowing. Weak PC sales this holiday season suggest that the struggles of Microsoft and other companies that depend heavily on the computer business will not abate soon. Plenty of consumers seem content to make do with what they have, especially in a shaky economy in which less expensive mobile devices are bidding for a share of their wallets.
ON THE MOVE
Hawaiian Airlines has promoted and appointed the following:
» Mark Arimoto to associate general counsel. He will also continue to help oversee the day-to-day activities of Hawaiian’s legal department. Arimoto joined the airline in September 2007 as an assistant general counsel.
» Robin Kobayashi has been appointed to assistant general counsel and will focus on employment and labor issues for Hawaiian. She has 12 years experience as a clerk and working for law firms and government, including working as an attorney for the National Labor Relations Board in Washington, D.C.
» Scott Miyasato has been appointed to assistant general counsel and will focus on financial and contractual matters for Hawaiian. He previously worked at the law firm Cades Schutte in Honolulu for 10 years as well as a general counsel for a medical device company.
