|Bid||23.77 x 0|
|Ask||24.27 x 0|
|Day's range||23.77 - 24.31|
|52-week range||20.15 - 42.56|
|Beta (5Y monthly)||N/A|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||N/A (N/A)|
|1y target est||N/A|
(Bloomberg Opinion) -- Las Vegas might not sound like the best place to hunker down and get some work done. But hotel groups are hoping to change that.MGM Resorts International is offering a new “Viva Las Office” package, whereby frazzled home workers can swap a view of their backyard for one of the Bellagio fountains. Opt for the top-end “Executive” deal, which starts at $278 a night, and guests can stay at the Vdara Hotel & Spa or the Aria Resort & Casino, work from a lavish suite or an outdoor cabana, and wind down afterwards with a poolside massage. Since the pandemic halted lucrative business travel and overseas vacations, hotels have been confronting their biggest crisis. They’ve had little choice but to get creative in filling all those rooms. That’s why operators from Whitbread Plc’s budget Premier Inn to the luxurious Mandarin Oriental International Ltd. are trying to attract a new clientele: home workers. If they succeed in repurposing their properties, the hotel trade may be an unlikely beneficiary of our shift to flexible working.Most of the focus right now is on the rise of work-from-hotel programs, through which operators not only offer workspace in hotel rooms, but also provide wifi, business support, refreshments and use of other facilities.Accor SA, the French hospitality company, launched Hotel Office in August — and the program is now in around 220 hotels in the U.K. and 70 in the Benelux region. It’s also available in Russia and South America and is being expanded to other markets, including North America, Hong Kong and France.In the U.K., you can work from the group’s five-star Hotel Sofitel St James. For 350 pounds ($455) a day, you get one of the most deluxe suites, along with breakfast, unlimited tea and coffee, lunch and a cocktail in the bar. Or you can go the budget route and work in an Ibis — their offerings start at about 30 pounds per day, roughly comparable to subscribing to a desk in a co-working space.Accor says it’s seeing strong demand from individuals booking a single day to get respite from distracting building work, noisy children and crowded house shares. But companies are also looking for longer-term availability. In Russia, for example, one business booked multiple rooms in an Ibis hotel for two months.Other hotels are partnering with co-working companies to offer workspace in their rooms and suites. Proper Hospitality, which operates luxury hotels in Los Angeles, San Francisco, Austin and Palm Springs, recently teamed up with premium flexible office provider Industrious. Still, selling rooms for the day is less profitable for hotels, typically commanding 50% to 80% of the price of an overnight stay. Then there’s the cost of intensive cleaning. But with hotel occupancy at less than 50% globally in August, according to data provider STR, having some extra customers is better than earning no income at all. Meanwhile, managing room occupancy to maximize profits is a core skill of hotel operators. Richard Clarke, a leisure analyst at Bernstein, says the dream would be to sell a room twice over — once for a daytime worker and once for an overnight stay. Although this struggling industry is a long way from such a happy situation, flexible working may leave a lasting legacy. Up until now, business travel has mainly involved people visiting customers and staying in nearby hotels overnight. Now we’re likely to see a greater proportion of the trade made up of workers coming to spend some time at corporate headquarters.CitizenM, a hip Dutch hotel chain, recently signed a deal to build a 240-room hotel next to Facebook Inc.’s Menlo Park, California, campus. The company is unusual in the industry because it owns most of its hotels. It is backed by Singapore’s sovereign wealth fund, the Dutch pension fund APG and entrepreneur Rattan Chadha, founder of the Mexx fashion brand, so it can afford to take a long-term view. But it’s still a bold bet on more nomadic workforces.It’s even possible that as corporate offices shrink, some vacant floors could be turned into on-site accommodation, which could also be managed by hotel chains. Alternatively, companies cutting back on traditional office space might use hotel facilities when their teams come together.With infections rising across Europe and the U.S., the hospitality industry’s focus is firmly back on navigating the crisis and new restrictions. But there are reasons to think that our great work-from-home experiment could help hotels cope in a post-pandemic world. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- With international travel decimated by Covid-19, it’s a dark time for hoteliers. So it’s hardly surprising that Accor SA might be interested in a merger with London-listed InterContinental Hotels Group Plc, owner of the Crowne Plaza and Holiday Inn brands.France’s Le Figaro newspaper reported that Accor’s chief executive officer, Sebastien Bazin, considered an approach for the rival company before deciding the timing wasn’t quite right. But if a deal could be agreed, there would be an opportunity to strip out costs to help the chains navigate the current crisis. It would also put them on a surer footing when an upturn eventually comes.IHG operates a so-called “asset-light” business model, where it doesn’t own much property — preferring instead to franchise its brands and offer hotel-management services to the owners. Its French rival has moved in this direction too, which limits the savings you’d get if you were combining two big property portfolios. Nevertheless, there are other costs that could be cut in areas such as centralized bookings, property management and the procurement of goods used by hotels. IHG and Accor are respectively the world’s fourth- and fifth-biggest hotel operators, and there would also be geographical advantages to bringing them together. IHG is the market leader in China and is strong in the U.S., while Accor is number one in many other regions, according to analysts at Bernstein.The two companies are especially concentrated in the mid-market, through chains such as Accor’s Ibis and Novotel brands. These cater more to domestic travelers, so they’re better placed to recover more quickly from the pandemic.The problem is that the very circumstances that make a deal desirable also render it difficult to construct. Shares in Accor have fallen 40% since before the pandemic — about twice as much as IHG stock. So Accor has suffered much more, leaving it as the smaller party. That makes it harder for Bazin to initiate talks from a position of strength. Based on their market values, a nil-premium merger would give IHG shareholders 57% of the combined company and Accor’s 43%. In another unhelpful development, Accor’s bonds were cut to a junk rating by Standard & Poor’s on Wednesday. And its shareholder base is complicated: China’s Jinjiang International and the Qatar Investment Authority are its two biggest investors, each owning stakes of between 11% and 12%.A bigger concern is that negotiating a deal in the midst of a travel maelstrom is challenging. The two sides would have to make assumptions about how quickly consumers will start returning to hotels, and when companies will be prepared to send their staff on trips again. Against this backdrop, it’s not easy to work out a fair price. Both sides are at risk of being caught out.Still, if a deal can be done, it has some merit. Travel will recover at some point, and a more muscular group would be better placed to negotiate franchise deals with property owners and to use its combined marketing clout to snag more customers. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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