Bizwatch

• Share

Checking In for A Recovery
The U.K. housing market is cooling off, but the hotel sector seems to be heating up. Saudi investor Prince Alwaleed bin Talal is in talks to buy London 's Savoy Hotel for at least $360 million. Ian Schrager has FOR SALE signs up at two London sites, the swanky Sanderson and the St. Martins Lane Hotel. Stelios Haji-Ioannou's easyGroup is launching a chain of no-frills easyHotels in early 2005. And Simon Woodroffe — the man behind the YO! Sushi conveyor-belt eateries — is opening Yotel, cramming luxury into tiny, 10-sq-m rooms, inspired by Japan 's "capsule" hotels, for $135 a night.

"It's budget chic," says Yotel exec Gerard Greene. "There are designer hotels everywhere, but not everyone can afford them." Britain may be the best European locale for hoteliers to cash in. The occupancy rate in London has jumped 10% this year; average room rates are up 8%. "There's still a lot of upside," says Julia Felton, who heads Deloitte's HotelBenchmark Survey. "The recovery will filter through to the rest of Europe, but London is leading the way." It's also the season for hotels to negotiate rates with corporate clients. "The balance

INDICATORS Merger 2.0 A U.S. judge ruled that softwaremaker Oracle can proceed with its hostile bid for rival PeopleSoft, rejecting U.S. antitrust authorities' bid to block a deal. E.U. officials are still studying the proposed takeover. Engine Trouble Blaming high German labor costs and a stagnant auto market, Volkswagen said it could cut 30,000 jobs unless employees accept a two-year pay freeze. A Happy Ring Tone Mobile-phone titan Nokia may be rebounding after a poor first half. It raised earnings forecasts for the third quarter, citing market-share gains and stronger-than-expected demand.

of power seems to be swinging back to the hotels," Felton says. So maybe this recovery will be back for an extended stay.

The Price of Membership
Call it the E.U. diet: soaring food prices in Poland since it joined the Union on May 1 have forced some people to alter their menus. Beef prices shot up by 21.7% in the second quarter, thanks to demand for cheap Polish meat in other E.U. states. Carb lovers suffered, too: rice prices rose 27.7% after Poland implemented E.U. tariffs on imports from countries such as Vietnam. Food and oil have driven overall inflation to almost double the central bank's 2.5% target, and bankers will likely hike interest rates for the fourth time in four months when they meet at the end of this month. Poland 's neighbors don't seem to be having the same problems; none has an agriculture sector of such size and scope. The national bank forecasts that food prices will continue to rise at an annual rate of 9% through the end of the year. "Too pessimistic," says Citibank Handlowy analyst Katarzyna Zajdel-Kurowska, who thinks relief may actually be on the way. "We expect a good harvest will relieve some of the pressure." That would give Poles double cause for a feast of thanksgiving.

Turbulence Over Italy
Alitalia management and unions made little progress on a layoff-heavy deal to save the Italian flag carrier as a Sept. 15 deadline neared. "This is the last chance," warned Transport Minister Pietro Lunardi. Unions responded with threats of strikes, while rival Ryanair increased pressure by adding five new Italian routes.

The Bottom Line
	Yawn and turn back to their computers
		ROBERT EBEL, energy analyst, on how traders will respond to this week's OPEC meeting