Political Risk Watch: Hotels

WASHINGTON – Economically, the U.S. lodging business has nice momentum. The industry sold a billion room-nights last year, which meant $134 billion in revenues. Investors have been enthusiastic too–hotel and cruise stocks in the Standard & Poor’s 500 are up 14% in the past year, six points ahead of the broader market.

Yet could politics prove a problem? The industry’s standard bearers in Washington admit a mixed forecast, given the new policy priorities on Capitol Hill.

“Many of them are good for our industry,” says Joseph A. McInerney, chief executive of the American Hotel & Lodging Association (AHLA). “Some of them are not that great.”

Full story at Forbes.com

Skunk At The Innovation Party

WASHINGTON, D.C. – Every business lobbyist–and politician for that matter–favors spurring technological innovation and advancing American economic competitiveness. So how did a Capitol Hill hearing Wednesday, on just those subjects, turn contentious?

Network neutrality crashed the party.

The hearing was called by Rep. Nydia Velázquez, D-N.Y., who in January became chairwoman of the House Committee on Small Business and declared herself a champion for entrepreneurs. But at Wednesday’s hearing, Velázquez and colleagues heard from groups representing big businesses too.

Among the eight trade associations on the witness panel: USTelecom, whose members include AT&T and Verizon Communications, and the American Electronics Association, which counts Apple and Intel among the 2,500 companies on its roster.

There was agreement on most of the items discussed. America needs to produce more engineering and math students. And the Sarbanes-Oxley rules have gone too far.

But then they got around to network neutrality–the matter of whether big Internet service providers should be allowed to charge certain customers, mainly big bandwidth consumers like Google and Yahoo!, extra for access.

Full story at Forbes.com

Stock Focus: Betting The Farm

WASHINGTON – Activity on farm policy is buzzing in Washington, as the big 2002 law on American agriculture nears its September expiration and needs renewing.

In January, the Bush administration unveiled its proposal for the so-called “farm bill,” and the appropriate congressional committees have also been busy. Wednesday, for example, a House Agriculture subcommittee took up the topic of organic farming in the Bush package. Gigantic pieces of legislation like this usually have implications for stock investors. Take the reauthorization of the 2005 law on highway and transit spending, which stirred up interest in publicly held heavy equipment, engineering and construction materials companies.

Full story at Forbes.com

The Airlines’ Captain In Washington

WASHINGTON, D.C.- A former Marine captain who served in Vietnam, James May is no stranger to tough missions. He’s got plenty of them these days as chief executive of the Air Transport Association, the trade group representing the biggest U.S. airlines. Last week, for instance, May was an industry point man in responding to the furor over JetBlue’s passenger-stranding debacle.

But on May’s priorities list, the passenger-rights controversy falls well below another big-ticket item: the reauthorization of the Federal Aviation Administration, whose programs expire next September.

Full story at Forbes.com

Smarter Skies

Beijing has 16 million inhabitants, an economy that grew 12% last year and the 2008 Summer Olympics coming to town. If any city needs to let in more planes, it’s this one.

The Chinese are adding a runway to Asia’s second-busiest airport, but officials there also are hoping new technology will free up more space in the skies. In January the Civil Aviation Administration of China struck a deal with ERA, an Alexandria, Va. company, to install 27 devices, each the size of a minifridge, at Beijing International, and 5 more within a 12-mile radius of the airport. The boxes are packed with sensors that can track planes in flight and on the ground, as well as airport vehicles. More frequent and accurate data on the location of aircraft will let the Beijing airport safely cut the distance between planes as they descend.

Full Story at Forbes.com

The Entrepreneurs’ New Friends

WASHINGTON, D.C. – Not all business folks are worried about the Democratic takeover of Congress. Venture capitalists, for example, are welcoming Nydia Velázquez, D-N.Y., as the new chairwoman of the House Committee on Small Business.

“We feel she really understands the positive impact of venture-backed companies,” says Emily Mendell, a spokeswoman for the National Venture Capital Association (NVCA). Full story at Forbes.com

Blowing Up Infrastructure

WASHINGTON, D.C. – Last week, a crowd of 200 business reps and government officials piled into the U.S. Chamber of Commerce’s Washington headquarters for the organization’s annual State of American Business conference. Thomas Donohue, the Chamber’s chief, ticked off priorities for 2007. His top three: education, energy and improving America’s infrastructure.

On the latter, Donohue admitted at least one challenge. “Many people do not find infrastructure to be one of the more scintillating or sexy topics,” he said.

No, infrastructure is not sexy. But the Chamber hopes to add some sparkle this spring, when it rolls out an infrastructure capacity initiative known as “Rebuilding America.” The effort serves as more evidence, with implications for policy watchers and investors alike, that the building, construction, materials and transportation trades enjoy some of the hardiest support in Washington.

Full story at Forbes.com

New Congress: Investing Pluses and Minuses

WASHINGTON, D.C. – A former Hill staffer armed with a business degree from the University of Chicago, Stuart Sweet makes his living telling Wall Street what’s going on in Washington. With the 110th Congress kicking off this week, we checked in with Sweet, president of D.C.’s Capitol Analysts Network, to get his take on sectors bets for the Beltway-minded investor.

“The volatility of Washington has increased considerably,” says Sweet. “My job has gotten more interesting.”

Broadly speaking, Sweet’s take is that this Congress could prove productive. Reasoning: The Democrats’ need to protect conservative-leaning seats will prevent them from drifting too far left. Republicans, with a nervous eye on 2008, risk being tarred obstructionists if they block too much. Add to the mix President Bush’s likely desire to burnish his legacy, and the stage is set for cutting deals and passing laws.

Full story at Forbes.com

Memo To Enviros: Go Easy

WASHINGTON, D.C. – Five years ago, Roger Ballentine opened a lobbying and consulting shop, Green Strategies, to counsel companies on setting environmental agendas and dealing with eco-policy in Washington. At the time, he says, that corner of business was relatively quiet.

Things have picked up. “It’s just absolutely booming,” says Ballentine.

Full story at Forbes.com

Pushing Bankers On Climate Change

WASHINGTON, D.C. – There’s no shortage of scary stats on the world’s energy needs, particularly for poorer folk. Some 1.6 billion people have no access at all to modern energy services, and 2.5 billion still rely on burning wood and the like for cooking and heating. Developing countries, reckons the International Energy Agency, will need $10 trillion worth of energy investment from here to 2030.

For those worried about global warming, the nightmare is that those trillions will get spent on low efficiency, high pollution technology.

“The investment that takes place in the next ten to 20 years could lock in very high greenhouse gas emissions for the next half-century,” notes the British government’s recently released Stern Review Report on the Economics of Climate Change, “or move the world onto a more sustainable path.”

Pushing for the latter scenario is the International Finance Corporation, the private sector development arm of the World Bank Group. One the IFC’s prime targets at the moment: commercial banks, particularly those in developing economies such as China, India and Central Europe.

Full story at Forbes.com