Bannerot Partners

MSC Postpones Cruise; Alters Itineraries Due to Hurricane Milton

This year, at least 16 restaurant companies have filed for bankruptcy, primarily in the summer. While this number is high, it’s not as severe as during the pandemic, when nearly 30 restaurant chains filed for bankruptcy in a year. The current filings reflect ongoing financial struggles exacerbated by the pandemic, inflation, and shifts in consumer behavior. Despite the high number of filings, it's unlikely that we will see a repeat of the pandemic's record figures unless there is a new wave of financial distress. https://lnkd.in/gZvBrZbV

Congrats, Janet! https://lnkd.in/gQftniAc

The U.S. hotel market is seeing increased activity driven by several factors. A key driver is the impending maturity of loans facing financial strain if refinanced at today's high interest rates, according to a recent JLL report. Sellers are worried about rising insurance and capital costs, while investors are eager to deploy capital, creating favorable conditions for more hotel sales. Despite hotels achieving high RevPAR, profitability is declining due to these high interest rates, making refinancing challenging. This scenario, combined with normalized RevPAR growth and shrinking profit margins, is expected to stimulate transaction activity. Owners facing loan maturities may opt to sell their properties at a discount rather than face financial difficulties. On a positive note, there is strong interest from well-capitalized buyers, including private-equity investors, cross-border capital, and high-net-worth individuals, which enhances market appeal. Although current prices may be lower than in previous years, the growing number of buyers suggests potential stabilization and even upward movement in market pricing ahead.

MOD Pizza, once a rapidly expanding force in the fast-casual dining sector, is now contemplating bankruptcy, marking a significant turn of events in the industry. Unlike struggling competitors like Red Lobster, which faced difficulties due to strategic decisions, MOD had recovered well post-pandemic and seemed poised for growth, having amassed substantial investment and planned for an IPO. However, despite its initial success and extensive funding, MOD's expansion did not translate into sustained profitability. The chain's growth outpaced its ability to increase average unit volumes, a critical financial metric. Moreover, the fast-casual pizza market became oversaturated, intensifying competition and thinning profit margins. Private-equity involvement, while initially supportive of growth, also contributed to MOD's challenges. Investors often prioritize rapid expansion to show returns, leading to potentially risky decisions such as costly leases. These financial commitments, combined with inflation and rising operating costs, strained MOD's finances further, dashing hopes of an IPO and driving the brand towards bankruptcy. The potential bankruptcy of MOD Pizza underscores broader concerns within the industry, making investors wary and complicating future deals. As the situation unfolds, the exact reasons behind MOD's financial troubles will become clearer with the expected bankruptcy filing.

Here's an easily digested overview of the hotel industry. Nice to see a client prominently featured. https://lnkd.in/gBvtcYfk

Innovative design. The Silenseas concept uses wind propulsion via its Solid Sail technology, Orient Express Corinthian should be able to reach a speed of 17 knots while saving some 30%-40% in fuel consumption.

Overall, U.S. corporate bankruptcy filings reached a 13-year peak last year. It has been a busy two years for bankruptcy courts handling restaurant filings. Rubio’s filed for Chapter 11 protection earlier this month, on the heels of Red Lobster’s filing. Bankruptcy filings have come so far this year from Party Fowl, Boxer Ramen, Tijuana Flats, Sticky Fingers, Oberweis Dairy, and Foxtrot/Dom’s Kitchen. In 2023, Corner Bakery Café filed, as did major franchisees from Burger King, Wendy’s, CKE, Popeyes, Denny’s, and McDonald’s. Bankruptcy filings reached the highest annual total on record for private equity and venture capital-backed companies in the U.S. in 2023, according to S&P Global Market Intelligence data. https://lnkd.in/gJJQbuac

Bestie Q&A: Jason breaks down what happened to all those "Day in My Life Working in Tech" TikToks... During peak ZIRP (late 2020-early 2022), these kinds of videos were all over TikTok and Instagram They mostly showed off amazing perks... and very little work Jason's take: "These companies historically provided perks because they recognized that their employees were working on important things and sacrificing." "They were working 10, 11, 12 hours a day and coming in on the weekend." "If you have an employee who is that dedicated, the least you can do is buy them lunch or dinner." "Then, another generation came into these companies and cluelessly thought that they were entitled to these perks, simply for having a business card that had the name Google on it." "They poked the bear. It infuriated management at these companies." "And what happened is all those people got laid off." Jason's tech entitlement cycle: -- Hard problems create strong team members -- Strong team members create insane profits -- Insane profits create massive entitlement "And now, with the layoffs, we're back to strong team members solving important problems in the world... and the cycle starts anew." #dayinthelife #dayinmylife #tech #worklifebalance #startups #employee #work #working #allinpodcast

First quarter spending in 2024 for major online travel agencies (OTAs) like Expedia Group, Booking Holdings, Airbnb, and Trip.com Group reflected their ongoing competition to attract customers. Despite the challenges posed by competing with each other and with suppliers, such as hotels and airlines, these OTAs have collectively increased their marketing spend by 10.6% compared to the same period last year, reaching a total of $4.08 billion. Expedia Group stands out as the highest spender, allocating $1.65 billion on sales and marketing, representing 56.9% of its revenues for the quarter. Booking Holdings follows suit, spending $1.6 billion, which accounts for 36.4% of its revenues. Airbnb and Trip.com Group also increased their marketing budgets, with Airbnb spending $514 million and Trip.com Group spending $320 million in the first quarter. The reasons behind these expenditures vary among the companies. Trip.com Group attributes its increased spending to growth in China's domestic market, driven by changing consumer preferences and increased interest in travel. Expedia Group, on the other hand, is focusing on improving its products and brand value propositions to drive growth, particularly after experiencing slower-than-expected recovery in certain segments. Booking Holdings emphasizes the importance of driving more direct bookings and achieving greater marketing efficiencies. Airbnb, while maintaining disciplined marketing strategies, identifies incremental opportunities to invest in channels with higher return on investment (ROI), particularly for international expansion.