Hotel & Motel Management - August 2008 - (Page 4) 4 News H&MM August 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Red Lion considers buyout, options By Jason Q. Freed SENIOR EDITOR Overall guest satisfaction with hotels is down notably in 2008, according to the J.D. Power and Associates 2008 North America Hotel Guest Satisfaction Index Study. The study ranks the highest performers across six hotel segments. Four of the six segments declined in overall satisfaction, compared with 2007. Hotels sampled in the Americas posted yearover-year growth after Q2 of 5.1 percent in average daily rate ($110.14) and 2.7 percent in revenue per available room ($67.94), according to Smith Travel Research. Occupancy in the Americas fell 3.9 percent (66.7 percent). There are 5,883 projects with 785,547 guestrooms in the total U.S. hotel pipeline—a moderate quarter-over-quarter increase—according to Lodging Econometrics’ Q2 report. Of those projects, 1,723 are actually under construction. A recent PKF Hospitality Research report shows U.S. hotels could face a decline in demand greater than that experienced following Sept. 11, 2001, as a result of the current decline in airline capacity. Under a worst-case scenario, a 1-percent decline in the number of seats flown within the U.S. will result in a 0.39 percent decline in the demand, according to the report. Hyatt Hotels & Resorts and the owners of several Hyatt-managed properties are currently investing $1.3 billion in renovations and new openings within the Hyatt Regency brand. For updated breaking news, visit www.HotelMotel.com. Spokane, Wash.–Red Lion Hotels Corp. continues to explore its options after receiving an unsolicited bid in June from Columbia Pacific Securities Opportunity Fund LLC to purchase 15.9 million additional shares and take the hotel chain private. At presstime, CFO Anthony Dombrowik said Red Lion’s board of directors is “still engaged in discussion” and has appointed JMP Securities to assist. He said the company’s No. 1 concern is its obligation to increase shareholders’ value. “I don’t think anything is off the table,” Dombrowik said, when asked what Red Lion’s options are. Columbia Pacific already owns 12.7 percent of Red Lion, or 2.31 mil- Hennis lion shares. On HOSPITIUM June 28 it announced a non-binding offer to acquire the remaining shares at $9.50 per share. At the time, Red Lion was trading at around $7 per share, Dombrowik said. The buyout would total slightly more than $151 million. Dombrowik said he is not surprised there is interest in purchas- ing Red Lion. “With the downturn and the equities market in general, it’s not a surprise someone would take interest in the Dombrowik stock,” he said. RED LION Stephen Hennis, managing director of Hospitium, a hospitality research and consulting firm, said a down market is when some of the best deals are made. “Companies usually go private when their stock is trading at a perceived discount to the underlying value or when there is more value potential for the company as a private entity,” he said. Hennis also said Spokane, Wash.-based Red Lion is a good buy because real estate in the Pacific Northwest traditionally has been a strong market. Red Lion’s current portfolio consists of 53 hotels in nine states and one in Canada, plus an entertainment ticket business, TicketWest. Over the past year, Red Lion stock has traded as low as $6.45 and as high as $12.64 per share. Selling to Seattle-based Columbia Pacific is not Red Lion’s only option. “They will obviously review the offer and the consequencSee Red Lion | page 125 Technology red carpet rolls out at HITEC By Jason Q. Freed SENIOR EDITOR Austin, Texas–The Austin Convention Center overflowed with BlackBerrys and Bluetooth headsets as more than 5,000 techies gathered to show off their newest gadgets aimed at improving the hospitality industry at the Hospitality Industry Technology Exposition and Conference in June. From keyless lock vendors to third-party online booking agents, HITEC provided a venue for suppliers with extravagant booths to demonstrate their products to information technology professionals in the hospitality industry. HITEC featured so many new products that could increase efficiency at the property level, the challenge for a hotel IT staff becomes See HITEC technology | page 126 Dave Berkus, president of Berkus Technology Ventures, outlined 10 trends in technology, particularly as they relate to business travelers. HFTP Design show unites buyers, suppliers By Patricia Sheehan EDITOR IN CHIEF, HOTEL DESIGN MCLEAN EVENTS INTERNATIONAL Appointment-based, one-on-one meetings characterize HOTEC Design, so buyers and suppliers can maximize their time. Braselton, Ga.–The sold-out HOTEC Design forum held in June at the Chateau Elan Winery & Resort in Braselton, Ga., brought together hotel purchasers and suppliers for a fast-paced series of one-on-one, appointment-based sessions and an informational seminar program. Eighty-three buyer delegates from 75 companies met with 125 supplier delegates from 87 supplier companies. Buyers from hotels and resorts, cruise lines, casinos, and purchasing, management and design firms networked with the suppliers, whose products covered 24 categories. Globalization was the buzzword among attendees at the seminar porSee HOTEC Design | page 124 http://HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.HotelMotel.com
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