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Hilton could be broken up as Blackstone seeks to realise value – For more hospitality stories, see what the weekend papers say

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Hilton could be broken up as Blackstone seeks to realise value – For more hospitality stories, see what the weekend papers say
Written by:

Hilton could be broken up as Blackstone seeks to realise value
Hotel giant Hilton could be broken up by its owner, private equity firm Blackstone, which is considering ways to realise value from the group it bought for $26bn (£15.5bn) in 2007 ahead of debt repayment deadlines in three and four years. Options include public listings for parts of the chain along geographic lines, debt-for-equity swaps with lenders, and trade sales of packages of hotels to rivals. Blackstone is believed to have written down the value of its investment in Hilton by 50% last year. “These are very much early stage discussions, but clearly the $21bn worth of debt raised to buy Hilton back in 2007 isn’t going to be easily refinanced,” said a source close to the company. “The costs on servicing the debt aren’t onerous, but the world has changed a lot since this deal was done and preparations need to be made.” Hilton is the world’s largest hotel group with nearly 3,000 properties and 480,000 bedrooms. Meanwhile, rival InterContinental is expected to report a near halving in interim profits to around $160m this week, with revenue per available room down by as much as 14%. – 9 August, Read the full article in the Independent on Sunday >>

McDonald’s likely status as sole Olympics food brand sparks anger

News that US fast-food giant McDonald’s is in talks to make it the only branded food outlet visible at Britain’s Olympic venues in 2012 has sparked fury among critics, who say it does not represent British values. Other players, including British and Indian outlets, would only be able to sell their food in some Olympic sites if they removed labels or changed packaging while restaurants and cafés present at sites such as the ExCel Centre would have to make way for official sponsors during the Games. “We are supposed to be properly representing London and its ethnic diversity,” said Iqbal Wahaab, founder of the Roast restaurant chain and a government adviser on race and employment. London councillor and former head of London Food Jenny Jones described the idea as ‘outrageous’, adding “There are a huge number of British companies who would benefit from being able to openly sell healthier, better produced, locally-sourced food. McDonald’s is one of the main sponsors of the games while Coca-Cola has exclusive rights to sell non-alcoholic drinks, including tea and coffee, at Olympic venues. – 9 August, Read the full article in the Observer >>

Hyatt owners hope to raise $1.15b through flotation
The Pritzker dynasty of Chicago, which owns 85% of the Hyatt Hotels Corporation, is planning to float the hotel chain to raise up to $1.15b (£685m) in an initial public offering underwritten by Goldman Sachs, Deutsche Bank and JPMorgan. The prospectus contains some of the strongest anti-takeover provisions seen by analysts and will, post-float, allow the Pritzkers to retain control over the selection of directors, offer of preference shares and scheduling of annual meetings. No dividends will be paid on the new stock for the forseeable future. Hyatt made a loss of $36m in the first half of the year (compared with a profit of $173m in the first half of 2008) as sales tumbled from $3.8b to $1.6b and revenue per available room slumped by 24%. The group plans to use the funds raised as working capital and possibly for acquisitions. ¬ 7 August, Read the full article in The Times >>

Hundreds of hotels fail to comply with fire safety regulations

Thousands of hotels are putting their guests at risk by failing to comply with fire regulations, warn fire safety experts. They say many hotel and guesthouse owners believe they are still covered by certificates issued decades ago or are flouting new rules that came into force in October 2007. Failings include poorly-maintained smoke alarms, blocked stairways and fire exit routes, poorly-trained staff and inadequate provisions to prevent hotel rooms and corridors becoming smoke-logged. Research by the IoS reveals that fire authorities have issued thousands of prohibition and enforcement notices since October 2007, including more than 1,500 by Lancashire Fire Authority, 200 in Cornwall and nearly 300 in Somerset. Several hoteliers have been prosecuted in recent months. The inquest into the fire at Penhallow hotel in Newquay in 2007, which killed three people, heard that the owners had failed to update their fire detection system in line with the new rules and had been warned four times that they were trading illegally. – 9 August, Read the full article in the Independent on Sunday >>

Starbucks puts 31 UK coffee shops on the market
Starbucks has put 31 of its British coffee shops on the market as part of its efforts to trim its estate worldwide. The outlets for sale include two in the City of London and cafés in Birmingham’s Bull Centre, Princes Square in Glasgow and Market Place in Wigan. “Like many other retailers, we are discussing options with landlords for a small number of our UK stores,” said a spokeswoman for Starbucks UK, “However, we do not have any specific announcements at this time.” ¬– 8 August, Read the full article in the Independent on Sunday >>

US cafés declare war on laptop loungers
Internet access may have become an expected free facility in coffee shops but independent café owners in New York are beginning to stage a backlash as they seek to discourage laptop loungers who use their space and power for hours but only spend a few dollars. M. Rohrs’ House of Fine Teas and Coffees on Upper Eastside hit the news when it started charging $3 (£1.80) an hour to power up a computer and posted a sign that said: “Warning: theft of electrical service is prohibited.” The recently-opened Café Green on First Avenue refuses to offer free internet access on the basis that students and doctors from a nearby hospital would take up its tables for hours while Irving 71 Place near Gramercy Park also discourages the use of laptops. Bruce Taz, former owner of the Broken Cup near the Café Green, taped over his electric plugs when he discovered customers were tapping into a wireless signal from elsewhere in the building. –  8 August, Read the full article in the Independent >>

By Angela Frewin

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