Skift Take

Today’s edition of Skift’s daily podcast looks at Choice Hotels’ upscale ambitions, Brazil’s beach privatization, and Lufthansa’s earnings.

Series: Skift Daily Briefing

Skift Daily Briefing Podcast

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Good morning from Skift. It’s Friday, August 5 in New York City. Here’s what you need to know about the business of travel today.

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Episode Notes

Choice Hotels International’s $675 million acquisition of Radisson Hotel Group Americas is set to close this month, so what are Choice’s expectations for Radisson? The hotel franchising giant said the transaction would help it expand its mix of upscale brands, reports Senior Hospitality Editor Sean O’Neill.

Choice President and CEO Patrick Pacious said during the company’s second quarter earnings call on Thursday that the company would grow in, among other locations, the U.S. West Coast and upper Midwest. Pacious also believes Choice will be better able to attract bigger-spending business travelers with 80,000 more premium rooms in its portfolio. He added that Choice brands such as Cambria and Ascend Hotel Collection will benefit from the company adding 10 million members to its loyalty program.

Choice generated $106 million in net income during the second quarter despite its U.S. hotels only being 61 percent 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 turn next to a controversial bill in Brazil. Legislation that would open up its beaches to private sector tourism development is creating an enormous uproar in the country, writes Global Tourism Reporter Dawit Habtemariam.

All Brazilian beaches are required, under the country’s constitution, to be open to the public. But the proposed legislation would set aside 10 percent of beach territory for exclusive use by private sector developers, including hotel executives. Leaders such as São Paulo-based marine professor Ronaldo Christofoletti have come out against the proposal. He argues that giving the private sector carte blanche 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 last decade, especially in the travel industry. Although privatization has been credited with boosting Brazilian tourism, Christofoletti said that local communities have been excluded in such projects, such as the beach development plans. He added it’s uncertain who will develop the areas if the bill passes.

Finally, travelers have endured a brutal summer in the skies, with airlines’ ongoing staffing shortages driving the massive number of flight disruptions and cancellations. And Lufthansa Group CEO Carsten Spohr believes travelers will still endure flight disruptions 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 July 27 staff strike, Spohr expressed confidence that the worst of the chaos was behind his company. However, he said, during the group’s second quarter earnings call on Thursday, that airline staffing levels are still unable to efficiently handle surging travel demand. Spohr added that the problems causing airlines’ chaotic summer won’t be solved this year.


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Tags: brazil, choice hotels, lufthansa, radisson, skift podcast, tourism