Hotel & Motel Management - October 6, 2008 - (Page 31)

www.HotelMotel.com/digital_edition HotelMotel.com | H&MM October 6, 2008 Special Report OWNERS AND DEVELOPERS 31 Developers: Focus on cost-efﬁcient portfolio activity By Jason Q. Freed SENIOR EDITOR f companies that own and manage hotel properties aren’t able to buy more assets because of the weak ﬁnancial market, they must focus efforts on strengthening their current portfolios. One way to remain active is to search for solid partners. For many brands that own and franchise, the shift moves to doing deals with the right franchisees. For InterContinental Hotels Group, the development pipeline has not been affected by a weak economy. “We have been working hard to make sure we can weather this downturn,” said Tom Murray, COO of the Americas for IHG. “There is no drop-off in our pipeline. We’ve got the largest development pipeline of any hotel company, and we’ve signed more than half of that huge pipeline since October 2007.” According to its survey response, IHG has 1,788 properties in development, representing 242,249 guestrooms. None of the other top brands reported development pipeline ﬁgures, and the independent developer closest in activity is White Lodging Services Corp., which reported 41 properties in development, representing 9,432 guestrooms. Of those IHG properties in development, Holiday Inn Express is the most actively pursued, with 745 hotels in the pipeline. This follows a $1-billion relaunch of the Holiday Inn and Holiday Inn Express brands announced in October 2007. Proportionately, the branded boutique Hotel Indigo is growing the fastest. With 15 Indigo properties currently open, IHG has 59 more in development. “People have conﬁdence in the way our brands perform,” Murray said. “We still think the deals can get done. Our investors have established long relationships with banks.” Murray said deals that can’t get done right now are 1,000-room and larger projects that require a signiﬁcant amount of borrowing. Because of this, he said, the condo-hotel market has dried up. I Overall, Murray said IHG is optimistic about the future of the industry. “While there has been a slowdown in recent months, demand is still up year over year,” he said. “We’re careful because you can never be positive about what the future holds.” Strengthen operations IHG, like many owners and developers, is taking the downturn as a hint to strengthen operations at the current properties in the company’s portfolio. Instead of spending money at will, some are ﬁnding ways to streamline. “We’ve done things that we think can help reduce energy consumption,” Murray said. “There’s a huge savings from a ﬁnancial See Developers | page 32 INTERSTATE HOTELS & RESORTS Multiunit owners and developers are focusing on keeping properties already in their portfolios strong. Interstate Hotels & Resorts owns the Sheraton Columbia Town Center in Columbia, Md. [above]. InterContintental Hotels Group owns New York’s InterContinental Barclay [left]. IHG WORLD CLASS FF&E/OS&E PURCHASING SOLUTIONS PERFORMED WORLDWIDE Accuracy Integr ity Reliability www.benjaminwest.com BOULDER | CHICAGO | DALLAS | HONG KONG | HONOLULU | LONDON CIRCLE NO. 108 http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.benjaminwest.com

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - October 6, 2008

Hotel & Motel Management - October 6, 2008 Contents NYLO Brands Mix Up Lifestyle Segment La Quinta Eyes Mexico, Canada for Growth Perspective Legally Speaking Marketing Matters Satisfaction Trends Maintenance Doctor HotelWorld Update Trends & Stats Independent Hotels Top Hotel Multiunit Owners and Developers Survey Cleaning & Maintenance Music Wallcoverings Supplier News Transactions Softgoods: Bedding & Linens People Events Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - October 6, 2008

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