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North America's Borders Remain Closed

North America’s Borders Remain Closed

North America’s borders remain closed through January 21, 2021, limiting border crossings to “essential trade only” between the U.S., Canada, and Mexico.   The mutually-agreed extension has been made on a month by month basis during 2020, and has been in place since March of this year.

 

The border closure is due to Covid-19 cases on both sides of each border, and the interest of each country in protecting their citizens.   The national health agencies and ministries, and health officers, for each country are part of the decision-making for these restrictions.  Each country is looking to relevant data and protective health measures that seem to be working.

 

So-called border crossing due to “essential trade” activity is allowed under the provisions of the agreed restrictions, between the U.S. and Canada, and between Mexico and the U.S.   While essential economic development and various business activities continue, cross-border tourist activities to any number of visitor destinations have been decimated.

 

Presumptive President-elect Joe Biden’s administration will be part of the next consideration of these border restrictions.  Biden is set to take office on January 20, and the current border restrictions come due for consideration on January 21st.

 

A full article in Travel Pulse from December 11, 2020 indicating that North America’s borders remain closed, is available at this link:

 

US, Canada and Mexico Land Border Restrictions Extended

Comparing the Pfizer and Moderna Vaccines

Comparing the Pfizer and Moderna Vaccines

We found this interesting, an article comparing the Pfizer-BioNTech and Moderna vaccines by Mike Terry writing for BioSpace, the life sciences digital hub.  All of us are of course keen to know what may be coming with these Covid-19 vaccines.  The economic recovery and economic development we all hope for, depends upon the actual and perceived protections and treatments that are coming.

 

The best early news is the so-called “efficacy rate” … both vaccines are reporting 90%+ efficacy rates.   the CDC states that “vaccine efficacy/effectiveness (“VE”) is measured by calculating the risk of disease among vaccinated and unvaccinated persons and determining the percentage reduction in risk of disease among vaccinated persons relative to unvaccinated persons.

 

One big similarity in comparing the Pfizer and Moderna vaccines is that each use new messenger RNA technology.  RNA therapies that use mRNAs have been in the works prior to the Covid-19 outbreak, for possible use in personalized cancer vaccines and as vaccines for infectious diseases such as Zika virus.  However, as Mike Terry notes in his article, to-date, no therapeutic or vaccine using mRNA has been approved for use by the U.S. Food and Drug Administration (FDA).

 

to-date, no therapeutic or vaccine using mRNA has been approved for use by the U.S. Food and Drug Administration (FDA).

 

Both of these vaccine candidates require two doses about 28 days apart.  The Pfizer-BioNTech requires specialized refrigeration although the drug researcher and manufacturer Pfizer has designed its own packaging using dry ice that can be stored for weeks without the specialized freezers.

 

Pfizer and BioNTech have no development funding from the U.S. government, but do have a $1.95 billion agreement with the government to supply 100 million doses of the vaccine, with an option for another 500 million.   The Moderna vaccine trials were developed with financial and logistical support from the U.S. National institute of Allergy and Infectious Diseases (NIAID) and Operation Warp Speed, and could receive up to $2.45 billion in federal government funding.  And Moderna has a $1.5 billion deal to supply 100 million doses to the U.S. government.

 

The rapid progress from virus detection, sequencing information availability, and these vaccines being in their current state of testing, is a testament to the role of the burgeoning life sciences research and development industry in today’s connected global community.

 

The full article at BioSpace comparing the Pfizer and Moderna vaccines can be reviewed here:

 

Pfizer-BioNTech and Moderna’s Vaccines Are Leading the COVID-19 Race. How Do They Compare?

 

Covid-19 Upended a Luxury Hotel Truism

Covid-19 Upended a Luxury Hotel Truism

Covid-19 upended a luxury hotel truism in 2020, that wealthy travelers make luxury accommodations impervious to economic downturns.   Those of us involved in the hotels and resorts industry, particularly the luxury segment, well remember the longstanding promoter’s line that luxury hotel investments were among the “least risk” real estate asset classes due to their business being about the rich.

 

As of November 2020, we see that among lodging segments, luxury hotels have been the most dramatically impacted by the pandemic.   Two of the leading luxury destination markets, experienced a decline in occupancy to 37% for the March through August, 2000 reporting period (per a CBRE report).   This is a remarkable result even given the pandemic.

 

Travel restrictions, quarantines, infection rates, and safety concerns have gutted corporate travel and group business of all kinds, adding to how Covid-19 upended a luxury hotel truism in 2020.   Looking ahead, although there is some evidence that the luxury segment rebounded reasonably well after past recessions, there has been no “black swan” economic event similar to this year’s pandemic.   Luxury travel will return, whether for leisure or business, but we may also remember this year as having propelled alternate accommodations – eco resorts, glamping, and the like.

 

Ironically, that staycationing concept and the driving distance lodging distances that are implied, proved to be the winner.  California’s coastal resort segment might have been one exception to the difficulties with luxury travelers, but the additional California policies for shuttering industries (including Covid-19 restrictions for accommodations) was an additional impedance.

 

We will now remember 2020 as the year that exploded this “luxury hotels are the safe investment” myth, perhaps fallacy.   There have always been independent luxury accommodations, since those days when our ancestors traveled the early highways and inns popped up along the way.  But it is the luxury “chain” concept were the “luxury can’t fail line” really took hold.

 

Some History of the Luxury Lodging Segment

 

William B. Johnson helped to propel this promotional line, in the years following his acquisition of the Ritz-Carlton hotel brand in 1983.   Most hoteliers are unaware that part of W.B. Johnson’s legacy is the initial founding of the Hotel Asset Manager’s Association (“HAMA”).   Founding HAMA members were asset managers involved with luxury hotel investments, each of which on behalf of owners deeply unhappy with the annual coupons coming from these assets.

 

Other luxury lodging brands were getting going in those days.  Just before W.B. Johnson, Rosewood Hotels & Resorts was founded by Caroline Rose Hunt in 1979.   And although a somewhat parallel development, between 1981 and 1983 the first of the boutique hotels opened.  These included the first Kimpton Hotel and the first Morgans Hotel (in New York, an Ian Schrager and Steve Rubell creation).

 

The 1980’s saw more luxury chains take hold.  The Mandarin Oriental name was established in 1985 following the merger of Mandarin International Hotels Limited and the holding company of the hotel The Oriental.   Aman Resorts got its start in 1988, the result of Adrian Zecha’s initial interest in building a vacation home in Phuket which became a plan to open a boutique resort with Anil Thadani and others.

 

In the next decade, in 1999, Fairmont Hotels would merge with Canadian Pacific Hotels, creating the truly iconic luxury lodging brand as we know it today.

 

There are certainly predecessors to these chain roll-outs, such as Four Seasons (which took hold following Inn on the Park in 1970), and, RockResorts which dates is origin story to 1956 at Caneel Bay on St. John USVI.   Few of these founders would have believed that a day would come when luxury hotels were the emptiest of hotels, when Covid-19 upended a luxury hotel truism in 2020.

Senior Housing at Record Low Occupancy

Senior Housing at Record Low Occupancy

Senior housing at record low occupancy during the 3rd Quarter of 2020 according to the National Investment Center for Seniors Housing & Care (“NIC”).  According to this new data, the seniors housing and care sector is now experiencing its largest drop in occupancy on record.

 

Key findings from NIC’s report show varying occupancy levels for the categories of senior housing types, including:

 

  • Senior housing occupancy averaged 82.1% during the third quarter of 2020, down about 265 basis points from the prior quarter.

 

  • The occupancy rate for independent living properties and assisted living properties averaged 84.9% and 79.1% during the third-quarter, respectively.

 

  • The occupancy rate for nursing care properties averaged 76.0% in the third quarter of 2020.

 

NIC publishes its Market Fundamentals report each quarter.  The Market Fundamentals report compiles current quarter data from more than 15,000 seniors housing and care properties in 140 U.S. metro markets.   NIC’s Market Fundamentals report is prepared by its MAP® Data Service (established in 2004), which seeks to provide reliable and objective time-series data that investors, operators, and analysts can use to make informed investment decisions.  With each quarterly report, data is summarized for independent living, assisted living, memory care, and nursing care facilities.

 

The National Investment Center for Seniors Housing & Care (NIC) is a nonprofit 501(c)(3) organization whose mission is to support access and choice for America’s seniors by providing data, analytics, and connections that bring together investors and providers.

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