The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
May 9, 2000
In this week's report. . .
Major Hotel Construction Bodes Well For Additional "Rooms On Trade"
There's a hotel building boom underway, and the barter industry will profit from it. Last year 161,900 hotel rooms went into construction, more than any year since 1986 when 156,000 were built. Thirteen years ago when that building boom occurred, the hotel industry hit the skids and it took until the mid-1990s to recover.
Overall occupancy rates are expected to drop from 63.3% in 1999 to 62% next year, and slightly lower in 2002. In the face of falling occupancies, hoteliers will be looking to squeeze more income from ancillary goods and services, i.e. phone calls, restaurants, business centers, meeting rooms, and health-spa charges.
And with additional vacancies more trading of rooms will occur as hotels seek to make up for the softening occupancy rates.
There will also be an acceleration in the renovation and redesign of hotels, to lure the business travelers who are mixing business and pleasure. Research shows that travelers want better lobbies with more of a business environment, similar to airline executive lounges.
Homestore.com controls more than 90% of the 1.47 million homes listed for sale on the Internet, and the company needs to get its message and content in front of the marketplace. So they just reached a 5-year expanded agreement to offer their real estate listings and home services on the world's largest online service, America Online (AOL).
The two companies inked a $200 million barter agreement wherein AOL gets a 5.6% stake in Homestore (3.9 million shares of Homestore.com stock) for offering the "exclusive provider" arrangement of homes for sales listings on AOL plus its CompuServe, Netscape Netcenter, and Digital City brands.
Last week AOL also picked up 3.5 million additional shares of stock from DrKoop.com. (See this issue's "Here and There...") Bottomline: AOL continues to trade on the strength of their No. 1 ISP (internet service provider) position.
Primedia Announces Several Equity Deals
Primedia is a media company focused on consumer and business-to-business audiences. Last year, 1999, sales were $1.7 billion. The company's key brands include Seventeen, New York, Chicago, Fly Fisherman, Channel One, Horticulture, Modern Bride, and American Baby.
The company has bartered 10 ads-for-equities deals from January through April 25, which are expected to generate and build a valuable equity portfolio for Primedia over time.
Primedia's CEO Tom Rogers revealed, "Our new partners include Interactive Learning Network related to Channel One; CarsDirect.com related to Automobile magazine; Umagic, related to several of our consumer magazines; Professional Buyer, related to our international construction titles; and MetaFarms, related to our internet unit, IndustryClick."
BarterTrust Eyes Latin America
The BarterTrust Network is expanding into Latin America by purchasing a majority stake in Barter Latin America, which also operates Barter Mexico, www.barter.com.mx, headquartered in Mexico City.
Enrique Encisco Cordero and his sister Alicia Encisco Cordero are the founder of the company, both attended the IRTA convention in Vancouver last September where they met Mike Edelhart, president and CEO of BarterTrust.
Major clients of Barter Mexico include: Televisa, the largest media company in Mexico; Grupo MVS, a large cable, radio and online media operator; Casa Cuervo, the world's largest tequila manufacturer and producer of the Jose Cuervo Tequila; Digitel, the second-largest manufacturer of digital paging equipment in Mexico; PCTV, the largest cable operator in Mexico; restaurant chains Tony Roma's and TGI Friday's; Grupo Marti, the largest sports retailer and fitness center operator in Mexico; and Home Mart, Mexico's "Home Depot."
Other clients are: El Sitio, one of the three largest Latin American Internet portals; Seguros El Aguila (Eagle Insurance) and CP-Direct, a GE insurance company; El Economista, the second-largest daily newspaper in Mexico; Radio Acir, Radio Formula, and Grupo Imagen, three of the largest radio groups in Mexico; Cartonajes Estrella, one of the largest carton manufacturers; and Corev, a leading paint and construction finishes company.
Here and There. . .
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