Hotel & Motel Management - November 5, 2007 - (Page 4)

4 News H&MM November 5, 2007 | HotelMotel.com www.HotelMotel.com/digital_edition M&A pace slowing after early boom By Tony Dela Cruz CONTRIBUTING EDITOR Demand will outpace supply in most key hotel markets in 2008, American Express predicted in its annual Global Business Travel Forecast. The high demand could cause hotel rate increases of between 4 and 7 percent in demand-heavy markets in the U.S., according to the forecast. Because of the large amount of new supply in some markets, the company predicted occupancy rates will remain nearly ﬂat in 2008. InterContinental Hotels Group announced a global relaunch of the Holiday Inn brand family, including Holiday Inn, Express by Holiday Inn and Holiday Inn Express. The relaunch includes updates in service delivery, physical quality, bedroom and bathroom products, and updated signage. The company expects the ﬁrst property with the new look to be completed by April 2008. New York–By now, most lodging dealmakers say 2007’s unprecedented pace and magnitude of mergers and acquisitions is rapidly fading due to credit volatility. It’s not the ﬁrst time the industry has seen Wall Street giveth then taketh away, and experts now say future transactions will be driven by asset performance more than speculative capital. The glut of blockbuster singleasset deals can be seen in the Mid Year 2007 Select Major U.S. Hotel Sales Survey, published by the hospitality and gaming group of CB Richard Ellis. Taking a cue from the $26-billion acquisition of Hil- ton Hotels Corp. by The Blackstone Group, many trophy and so-called supertanker properties exchanged hands with the aid of high levels of private debt and equity capital, explained Daniel Lesser, senior managing director, CBRE. The survey noted more than 50 transactions of single hotel assets in the ﬁrst half of 2007 that sold for $10 million or more. Of these, the largest deal was the $675-million ($2.3million-per-room) acquisition of the Resorts East Chicago Hotel & Casino in East Chicago, Ind., by Ameristar Casinos. The next-largest transaction was the $575-million acquisition of the Makena Resort, which includes the 310-room Maui Prince Hotel in Makena, Hawaii, by a joint venture between Morgan Stanley Real Estate Fund V US, Trinity Investments LLC and Dowling Co. Both assets beneﬁt from inherent value enhancement, one being a gaming property and the other packaged with two golf courses, 1,317 acres of vacant land and a water processing facility. Lesser pointed out that most of the other mega-deals beneﬁt from being in major urban markets and thus enjoying high barriers to entry for new construction. Conversely, “in a secondary or tertiary market, you could wake up one day and ﬁnd ﬁve new hotel projects in the ground,” Lesser explained. “That won’t happen in New York or Chicago.” The smart money that fueled many of these mega-deals, however, has been ratcheted back by volatility in the commercial realestate credit markets, marking a clear transition from hyperactive capital to hotel investment heavily dependent on hotel operating fundamentals. “The industry is experiencing See M&A pace | page 102 LodgeWorks jumps into upscale game First Avia set for Savannah, Ga. By Jeff Higley EDITORIAL DIRECTOR The total major hotel transaction volume yearto-date through June 2007 was $8.2 billion, according to the HVS Mid-Year 2007 Major and Mid-Market U.S. Hotel Transaction Surveys. The number of major hotel transactions during that period was 155, and the major transaction average price per room was $215,000. André Martinez, managing director and chairman of Morgan Stanley’s Global Lodging practice, will chair the 11th annual International Hotel Investment Forum, March 3-5 in Berlin. Program information is available online at www. berlinconference.com. For updated breaking news, visit www.HotelMotel.com. LODGEWORKS LP Plans for an Avia hotel in Napa, Calif., include 58 tub suites. Shown here is the plan for the new property’s terrace. Wichita, Kan.–LodgeWorks LP is going back to the fundamentals for the launch of Avia, a new boutique hotel collec- SEE RELATED tion that it launched in September. STORY: Wichita, Kan.-based LodgeSierra brand Works said it will focus on guest moves forward with new name, higher service, intimate settings and func- expectations tional, contemporary design to Page 85 create Avia, which will command more than $200 per night in average daily rate. The company in September broke ground on Avia hotels in Savannah, Ga.; Long Beach, Calif.; and Napa, Calif. The Savannah property is scheduled to open in December 2008, while the other two are scheduled to open in spring 2009. In addition, ground will break in spring 2008 in The Woodlands, Texas, for an Avia hoSee LodgeWorks | page 84 Accor reorganizes leadership, structure By Stacey Mieyal Higgins SENIOR EDITOR ACCOR NORTH AMERICA Accor North America portfolio (includes U.S. and Canada) Brand Motel 6 Company owned Franchised Studio 6 Company owned Franchised The economy brand Motel 6 is now the primary focus of Accor’s U.S. operations. Guestrooms Hotels 76,244 15,432 674 218 Carrollton, Texas–With new leadership at Accor North America comes a new plan for the organization. Former c.f.o. Olivier Poirot is now c.e.o. of Motel 6/Studio 6 and Accor North America. He replaces Georges Le Mener, who retired. The announcement was made in September. In addition, Jim Amorosia, Motel 6/Studio 6 c.o.o., was named president and c.o.o. of the brands with expanded duties. Accor NA Mexico hotels now will report to Accor Latin America, and Soﬁtel in North America will report to Soﬁtel See Accor | page 86 4,648 801 36 9 Soﬁtel Company managed 3,193 10 Source: Accor North America http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.berlinconference.com http://www.berlinconference.com http://www.HotelMotel.com

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - November 5, 2007

Hotel & Motel Management - November 5, 2007 Contents M&A Pace Slowing After Early Boom LodgeWorks Jumps Into Upscale Game Accor Reorganizes Leadership, Structure Perspective At Your Risk Travel Trends Sales Clinic On Finance Family Business Matters Cornell Insights Franchise Law Training Trends Satisfaction Trends Management Trends Events Guest Column Trends & Stats GM Survey Historic Property Conversions Offer Appeal for All Extended-Stay Brands Survey Green is the Word at IH/M&R Show Transactions Restaurant POS Handhelds Keep Managers Alerted Rising Costs Confront Midwest Builders Business Travelers: Breakfast Still an Important Perk IH/M&RS Product Preview Vacation Ownership Projects to Grow in U.S., Abroad Awards Training Programs Jump to Front Lines Refrigeration: Before You Break It, Fix It Lighting Enhances Property People Supplier News Best Western Aims High with Atria Vantage Makes Global Plans Sierra Moves Forward with New Name, High Expectations Maintenance Doctor Social Marketing Makes Way into Hotel Industry People Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - November 5, 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.