Today’s edition of Skift’s daily podcast looks at Choice Hotels’ upscale ambitions, Brazil’s beach privatization and Lufthansa’s earnings.
Hello from Skift. It’s Friday, August 5 in New York. Here’s what you need to know about the travel industry today.
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Choice Hotels International’s acquisition of Radisson Hotel Group Americas for $675 million is expected to close this month, so what are Choice’s expectations for Radisson? The hotel franchise giant said the deal would help it expand its range of upscale brands, reports Sean O’Neill, hotel editor.
Choice President and CEO Patrick Pacious said on the company’s second-quarter earnings call on Thursday that the company would expand into, among other places, the U.S. West Coast and the upper Midwest. Pacious also believes Choice will be better able to attract high-spending business travelers with an additional 80,000 premium rooms in its portfolio. He added that Choice brands such as Cambria and Ascend Hotel Collection will benefit from the company’s addition of 10 million members to its loyalty program.
Choice generated net income of $106 million in the second quarter when its US hotels were only 61% full on average. O’Neill writes that its profitability was driven by average nightly rates of $95. That’s higher than what Choice typically charges.
We are missing a controversial bill in Brazil. Legislation that would open its beaches to private sector tourism development is creating a huge outcry in the country, writes Global Tourism Reporter Dawit Habtemariam.
All Brazilian beaches must, under the country’s constitution, be open to the public. But the proposed legislation would set aside 10% of the beach territory for the exclusive use of private sector developers, including hotel managers. Leaders such as São Paulo-based navy professor Ronaldo Christofoletti have spoken out against the proposal. He argues that giving carte blanche to the private sector to develop projects on Brazil’s beaches could increase pollution levels and harm marine ecosystems.
Large-scale privatization has taken hold in Brazil over the past decade, particularly in the travel industry. Although privatization has been credited with boosting Brazilian tourism, Christofoletti said local communities have been left out of such projects, such as beach development plans. He added that it is uncertain who will develop the areas if the bill passes.
Finally, travelers endured a brutal summer in the skies, with continued airline staff shortages leading to massive numbers of flight disruptions and cancellations. And Lufthansa Group CEO Carsten Spohr thinks travelers will still experience flight disruption next year, reports Edward Russell, editor of Airline Weekly, a Skift brand.
Although Lufthansa canceled more than 1,000 flights last week due to a staff strike on July 27, Spohr said he was confident the worst of the chaos was behind his business. However, he said during the group’s second-quarter earnings call on Thursday that airline staffing levels are still not able to effectively handle growing travel demand. Spohr added that the issues behind the airlines’ chaotic summer will not be resolved this year.