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McDonald’s gives up control of Chinese business in £1.7bn deal

McDonald’s is giving up the controlling stake in its Chinese business to a state-owned conglomerate as part of a global strategy to sell off more of its restaurants.
Beijing-backed Citic and Citic Capital Holdings will take a 52pc stake in McDonald’s restaurants in China and Hong Kong, while US-based Carlyle Group will control another 28pc.
The US fast food giant will retain the final 20pc as part of the deal, which it said was worth $2.08bn (£1.7bn).

Sales in China were hit last year as protests were staged against US companies amid a diplomatic spat between Beijing and Washington over the South China Sea.
McDonald’s has grown rapidly in China since it opened its first store in 1990, but is facing stiff competition from Asian brands such as Dicos and Real Kung Fu, which also offers noodles and rice dishes.
The new Chinese investor group plans to open a further 1,500 restaurants in the country’s second- and third-tier cities.
Experts claim a shifting diet towards burgers and pizzas has created an obesity explosion in China, particularly in less affluent inland areas.
But the new consortium will aim to capitalise on growing demand among the middle classes for healthier fast food options.
McDonald’s had previously announced plans for 4,000 of its global restaurants to be converted into franchises by the end of 2018.
Ninety-five percent of its restaurants will be converted in the longer term, it said.
This strategy enables McDonald’s to continue to take a slice of profits but cut down on operating costs.
The company is also facing tough competition in China from Yum Brands, which owns KFC and Pizza Hut.
Last year Yum created a new domestic business, Yum China, which plans to add 600 restaurants a year in China in the next five years.
McDonald’s has more than 2,400 restaurants in mainland China and 240 in Hong Kong. The deal will see 1,750 being converted into franchises.
Zhang Yichen, chairman and chief executive of CITIC Capital, will serve as chairman of the new venture.
“McDonald’s has strong growth potential in the Chinese market,” he said.
The deal will need to be approved by regulators in China but is expected to be completed this summer.

Source: http://www.telegraph.co.uk/business/2017/01/09/mcdonalds-gives-control-chinese-business-17bn-deal/

Luke Mangan to launch burger concept

Luke Mangan is the latest chef to enter the competitive burger sector, with the Chicken Confidential brand expected to launch in January 2017.

The first location is slated for Sydney, however five outlets are expected to open across Australia, as well as further expansion plans across Asia in the next 18 months.

From 7 to 22 December, Mangan – who also operates Hilton’s glass Brasserie – will give the restaurant’s lunch time bar guests the opportunity to taste Chicken Confidential’s chicken burger.

Mangan operates 19 different restaurants across five countries as well as the food offering for Virgin Australia’s Business Class, on P&O cruise ships and on-board Eastern & Oriental Express.

Chicken Confidential’s menu will offer fried chicken in a range of wraps, burgers and salads with the chicken supplied by Inglewood Fresh Organic Free Range Chicken.

Mangan is joined by other leading Australian chefs also operating in the burger sector: Warren Turnbull (Chur Burger), Neil Perry (Burger Project), Shannon Bennett (Benny Burger) and Daniel Wilson (Huxtaburger).

Source: http://www.hospitalitymagazine.com.au/food/news/luke-mangan-to-launch-burger-concept

Brexit impact yet to hinder Europe’s growing business travel market

The Eurozone’s population and institutions may have been surprised by the outcome of the June Brexit referendum, but the economy has barely missed a beat as markets have snapped back after an initial slide, with Germany continues to lead the charge amongst major business travel markets in Europe.

Consumers are consuming and businesses are hiring, investing and traveling for now. While spending has been somewhat resilient, measures of near-term investment intensions plunged in the third quarter of this year, suggesting coming weakness.

Brexit’s potential for delaying short-term economic decisions and its long term impact on trade, jobs, immigration and investment will create challenges for business travel across Europe in the years to come. The specific effects on business travel that GBTA foresees include:

Uncertainty: New waves of uncertainty may develop following the actual delivery of Article 50 as trade and immigration negotiations begin in earnest.
Travel Pricing: The end of open skies for European air carriers may result in fewer flights and higher fares and reinstituting mobile roaming charges could expose road warriors to rising voice and data communication costs.
Travel Friction: The debate over immigration could lead to extreme new UK visa requirements, which would likely be reciprocated across the EU. Coupled with rising security concerns in a new separated world, business travelers may face more difficulty and scrutiny moving throughout the EU.
Access: The free movement of people and money throughout the EU brought many advantages for business travel. Going forward airlines may have to renegotiate routes and gates with both the UK and the EU potentially resulting in fewer flights and higher fares, processing and acceptance of credit cards becomes more complicated and the end of the European Health Insurance Card for UK business travelers could muddle health coverage during trips.
Location Decisions: Establishing restrictions on the right for EU citizens to work in any member state will have profound longer-term impacts on business travel levels and patterns.
The GBTA BTI™ Outlook – Western Europe report looks at the five largest business travel markets in Europe: Germany, the United Kingdom, France, Italy and Spain that together make up 70 percent of Western Europe’s business travel market, and serve as a strong indicator for the European business travel market more broadly. Western Europe’s business travel spending is projected to increase to $210.7 billion USD in 2016 and top out at $220.6 billion USD in 2017, 6.0% and 4.7% growth respectively – very positive numbers, but slightly lower than predictions in GBTA’s previous forecast.

“While trips and spending have been bounded by slower European and global economic growth, Brexit’s influence has been negligible thus far,” said Catherine McGavock, GBTA’s Regional Vice President – EMEA. “Businesses and business travelers continue to show their resilience and ability to adapt as Europe has faced an array of challenges recently, but business travel remains strong.”

Germany’s economy remains one of the strongest in all of Western Europe fueled by a robust labor market, low interest rates, rock-bottom energy prices and strong demand for exports. GBTA projects Germany to continue to lead the growth in business travel spending from 2015-2017, with a 7.5 percent compound annual growth rate increase, followed by Spain (6.5 percent), the United Kingdom (4.7 percent), France (4.2 percent) and Italy (2.6 percent).

Country-Level Business Travel Outlooks

Germany – German organizations continue to send more business travelers on the road as itcontinues to be the strongest business travel market in the region.

Total business travel spending will increase 7.4 percent in 2016 and another 7.6 percent in 2017 reaching $73.4 billion USD.
Domestic business travel will advance 7.4 percent this year followed by 7.8 percent in 2017 reaching $59.7 billion USD.
International business travel will grow 7.3 percent this year and 6.8 percent next year hitting $13.8 billion USD.
The United Kingdom – Despite the uncertainties surrounding Brexit, the UK’s economy and business travel market have not imploded as many critics feared. Next year will present more of a challenge from the UK’s business travel market though as the downside risk becomes more palpable with many firms likely to postpone or reduce investment, which could lead to a slowing economy.

Total business travel spending will increase 6.9 percent in 2016 and another 2.4 percent in 2017 reaching $51.6 billion USD.
Domestic business travel will advance 5.9 percent this year followed by 2.5 percent in 2017 reaching $33.5 billion USD.
International business travel will grow 8.9 percent this year and 2.3 percent next year hitting $18.2 billion USD.
France – While French business travel has not been quite as challenged as travel in its Southern Tier neighbors over the past few years, growth has been much less robust than healthier European markets.

Total business travel spending will increase 4.1 percent in 2016 and another 4.2 percent in 2017 reaching $40.2 billion USD.
Domestic business travel will advance 3.3 percent this year followed by 4.8 percent in 2017 reaching $25.9 billion USD.
International business travel will grow 5.4 percent this year and 3.1 percent next year hitting $14.4 billion USD.
Spain – Just a couple years ago, Spain’s business travel market was one of the most troubled markets on the European continent, but is now expected to experience one of the highest growth rates over the forecast period, second only to Germany.

Total business travel spending will increase 7.2 percent in 2016 and another 5.8 percent in 2017 reaching $22.0 billion USD.
Domestic business travel will advance 8.0 percent this year followed by 5.7 percent in 2017 reaching $17.4 billion USD.
International business travel will grow 4.0 percent this year and 6.3 percent next year hitting $4.5 billion USD.
Italy – Ongoing political turmoil, obstinate banking tensions and Italy’s sizeable debt will likely continue to hinder investment prospects and create a ceiling for business travel performance.

Total business travel spending will increase 3.4 percent in 2016 and another 1.9 percent in 2017 reaching $33.3 billion USD.
Domestic business travel will advance 3.0 percent this year followed by 1.8 percent in 2017 reaching $29.2 billion USD.
International business travel will grow 6.4 percent this year and 2.7 percent next year hitting $4.1 billion USD.

Source: http://www.4hoteliers.com/news/story/16621