Hotel & Motel Management - December 10, 2007 - (Page 6)

Checking In PERSPECTIVE & LETTERS H&MM December 10, 2007 | HotelMotel.com EDITORIAL For all of our readers: good holiday cheer IN THE details Landry’s list brings smiles Light-hearted approach works Good advice for hoteliers Lawyers, auditors: Ouch! By Jeff Higley Editorial Director good chuckle is always around the corner when dealing with people in the lodging industry. It’s their nature to be hospitable, open, and for the most part, quick-witted and clever. Sometimes, the chuckle results from an unprintable quip or escapade. The people who fall into this category know who they are. But most of the time, the chuckles turn into hearty laughs because they are front and center. Don Landry’s performance during The Lodging Conference is a perfect example. The affable Landry opened a general session with some great one-liners, and in the spirit of the holidays, I’m passing them on to H&MM’s readers as a gift that should bring some smiles. The list consists of some “gifts” from Landry, a longtime industry executive who now runs Top Ten Consulting in Slidell, La. Following are some of the good ones: For the sellers who may have missed out on the peak: Depression is merely anger without enthusiasm. For the buyers waiting for the next downturn: The early bird may get the worm, but the second mouse gets the cheese. For the consultants who justiﬁed all of these acquisitions: A conclusion is the place where you got tired of thinking. For the management companies enjoying great results: Remember that if everything is going well, you’ve obviously overlooked something. For the marketing folks: To steal ideas from one person is plagiarism; to steal from many is research. For the brokers and their sales presentations: 82.7 percent of all statistics are made up on the spot. For the lawyers: 99 percent of you give the rest a bad name. For Wall Streeters: If at ﬁrst you don’t succeed, destroy all evidence that you tried. For developers: Experience is something you don’t get until just after you need it. For contractors: The sooner you fall behind, the more time you’ll have to catch up. For the franchisors: Avoid cutting yourself slicing vegetables by getting someone else to hold while you chop. Last and probably least, for the auditors and Sarbanes-Oxley parasites: Some people are like Slinkies—they’re not really good for anything, but they bring a smile to your face when pushed down the stairs. One good deed In the spirit of the holidays, here’s some good cheer. Orient-Express has agreed to acquire the Donnell branch of the New York Public Library, located at 24 W. 53rd St. in New York City. Orient-Express plans to build a 150-room luxury hotel, including a rebuilt state of the art Donnell Library location within it. The hotel will house contemporary dining, spa and wellness facilities, as well as expanded banquet and dining space for the company’s existing restaurant and dining business, ‘21’ Club. The property will be marketed under a new ‘21’ Hotel brand name. Orient-Express will pay the library $59 million in cash, in addition to the value of the library space, which the library will own and occupy. Construction, which is subject to Orient-Express obtaining all necessary permits, is scheduled to start in 2009. The hotel is expected to open in early 2011. The overall project is estimated at $220 million, inclusive of the purchase of the library. Yes, there certainly is money to be made for Orient-Express. But it is doing something good for the community while also acting in its own best interests. Not all hotel projects fall into that category. This one deserves a healthy serving of eggnog. jhigley@questex.com 600 Superior Ave. East, Suite 1100, Cleveland, OH 44114 Jeff Higley, EDITORIAL DIRECTOR . . . . . . . . . jhigley@questex.com Ph: (216) 706-3728 | Fax: (216) 706-3711 Stephanie Ricca, MANAGING EDITOR . . . . . . . sricca@questex.com Ph: (216) 706-3791 | Fax: (216) 706-3711 Elaine Simon, SENIOR EDITOR . . . . . . . . . . . . esimon@questex.com Ph: (216) 706-3782 | Fax: (216) 706-3711 Stacey Mieyal Higgins, SENIOR EDITOR . . . . . .shiggins@questex.com Ph: (216) 706-3783 | Fax: (216) 706-3711 Heather Gunter, ASSOCIATE EDITOR . . . . . . . hgunter@questex.com Ph: (216) 706-3792 | Fax: (216) 706-3711 Jason Q. Freed, ASSOCIATE EDITOR . . . . . . . . jfreed@questex.com Ph: (216) 706-3727 | Fax: (216) 706-3711 Emily Hanna, ASSOCIATE EDITOR . . . . . . . . . ehanna@questex.com Ph: (216) 706-3784 | Fax: (216) 706-3711 Patricia Sheehan, MANAGING EDITOR, Hotel Design Ph: (216) 706-3753. . . . . . . . . . . . . . . . . .psheehan@questex.com Amy B. Witek, ART DIRECTOR . . . . . . . . . . . . . awitek@questex.com Rob Ghosh, ART DIRECTOR. . . . . . . . . . . . . . .rghosh@questex.com ADVERTISING/SALES/CIRCULATION 600 Superior Ave. East, Suite 1100, Cleveland, OH 44114 John McMahon, GROUP PUBLISHER . . . . . jmcmahon@questex.com 757 Third Ave., 5th Floor, New York, NY 10017 Ph: (212) 895-8243 | Fax: (212) 895-8212 Matt Waddell, PUBLISHER . . . . . . . . . . . . . . mwaddell@questex.com 2835 N. Shefﬁeld Ave, Suite 236, Chicago, IL 60657 Ph: (773) 880-2240 | Fax: (773) 880-2241 Mary Malloy, NORTHEAST, INT’L. . . . . . . . . .mmalloy@questex.com Ph: (216) 706-3790 | Fax: (216) 706-3711 Brian Levine, SOUTHEAST . . . . . . . . . . . . . . . blevine@questex.com 757 Third Ave., 5th Floor, New York, NY 10017 Ph: (212) 895-8285 | Fax: (212) 895-8215 Jason Wallace, WEST . . . . . . . . . . . . . . . . . . . jwallace@questex.com 1461 S. 375 E., Kaysville, UT 84037 Ph: (801) 499-9999 | Fax: (801) 315-4137 Brian Olesinski, CLASSIFIEDS, RECRUITMENT, DIRECTORY . . . . . . . . . . . . . . . . . . . . . . . .bolesinski@questex.com Ph: (216) 706-3794 | Fax: (216) 706-3711 Heidi Spangler, DIR., AUDIENCE DEV. . . . . . . . hspangler@questex.com Ph: (216) 706-3705 | Fax: (216) 706-3714 BUSINESS DEVELOPMENT Stacy Silver, BUSINESS DEV. DIRECTOR. . . . . ssilver@questex.com Ph: (954) 306-0747 | Fax: (954) 697-6265 J. Richard Casson, ASSOCIATE BUSINESS DEV. DIRECTOR . . . . . . . . . . . . . . . . . . . . . . rcasson@questex.com Ph: (212) 895-8426 | Fax: (212) 895-8210 PRODUCTION 306 W. Michigan St., Suite 200, Duluth, MN 55802 Bonnie Ling, PRODUCTION DIRECTOR . . . . . . . bling@questex.com Ph: (218) 279-8820 | Fax: (218) 279-8812 Janelle Heller, PRODUCTION MANAGER . . . . . jheller@questex.com Ph: (218) 279-8834 | Fax: (218) 279-8815 MARKETING/MAGAZINE SERVICES MARKETING/MAGAZINE SERVICES Ilene Schwartz, Kroll Direct, LISTS . . . . . . . . .ilene@krolldirect.com Ph: (216) 371-1667 | Fax: (216) 371-1669 PERMISSIONS . . . . . . . . . . . . .questexpermissions@reprintbuyer.com Ph: (800) 494-9051 Ext. 100 REPRINTS . . . . . . . . . . .HotelandMotelManagement@reprintbuyer.com Ph: (800) 290-5460 Ext. 100 SUBSCRIPTIONS, CUSTOMER SERVICE. . Questex@sunbeltfs.com Ph: (866) 344-1315 | Fax: (615) 377-0525 BACK ISSUES, SINGLE CURRENT COPIES, CD-ROM, MICROFILM, MICROFICHE Ph: (866) 344-1315 | Fax: (615) 377-0525 Funding through sale-leasebacks I just ﬁnished reading “Lending hesitance may Letters to the Editor slow supply” in [the Oct. 15 issue of] HOTEL & hmm@questex.com MOTEL MANAGEMENT [page 1]. I agree with the statement, “It’s more an issue of delaying than canceling.” One additional point I think the magazine should address is the effect the “credit crunch” and the capital market “risk adjustments” will have on hoteliers’ desire and interest to utilize sale-leasebacks. As the cost of capital goes up, the SLB becomes a much more enticing and viable alternative to traditional debt and equity ﬁnancing. Aside from the obvious beneﬁts of a SLB, getting projects off the drawing boards while credit is tightening most likely will cause operators and developers Mail Box to seriously consider sale-leaseback transactions not only for “stripping equity” out of existing properties but also for funding new developments. Bryan J. Clark President, Lion CFC San Diego Think outside the borrowing box Although I agree in part with your article [“Lending hesitance may slow supply”], one stone was left unturned. I am always perplexed at hoteliers’ limited knowledge of their borrowing options. It’s evident that as acceptable loan-to-values drop and cash ﬂow coverage ratios increase, owners are expected to take on a much larger share of project risk than ever before. In light of the current credit crunch, one structure that seems to make a lot of sense when considering PIP is lease ﬁnancing. It typically is secured by the assets being ﬁnanced and not necessarily the property. When a hotelier needs to do a renovation, a re-position/ﬂag change or another capital improvement, they tend to either reﬁnance their property or deplete their cash reserves, which is not always the best option. Projects can be funded without placing debt on the property. PRESIDENT & CEO—Kerry C. Gumas EXECUTIVE V.P. & CFO—Tom Caridi EXECUTIVE V.P.—Robert S. Ingraham EXECUTIVE V.P.—Tony D’Avino EXECUTIVE V.P., CORP. DEV.—Claudia Flowers V.P. & G.M.—Don Rosenberg V.P., DIGITAL MEDIA—Seth Nichols V.P., HUMAN RESOURCES—Diane M. Evans Copyright 2007 Questex Media Group, Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including photocopy, recording or information storage and retrieval system, without permission in writing from the publisher. Authorization to photocopy items for internal or personal use, or the internal or personal use of speciﬁc clients, is granted by Questex Media Group, Inc. for libraries and other users registered with the Copyright Clearance Center, 222 Rosewood Dr., Danvers, MA 01923; phone: (978) 750-8400; fax (978) 7504470; call for copying beyond that permitted by Sections 107 or 108 of the U.S. Copyright Law. For those not registered with the CCC, send permission request to questexpermissions@reprintbuyer.com; phone: (800) 494-9051 Ext. 100. Hotel & Motel Management does not verify any claims or other i http://www.hotelmotel.com

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - December 10, 2007

Table of Contents News Wildfires test hotels' emergency plans LIIC roundtable: Capital available for hotel projects Departments Perspective Letters to the Editor At Your Risk Family Business Matters Sales Clinic On Finance Satisfaction Trends HotelWorld Update Events Trends & Stats Special Report H&MM's "year in review" tackles the top seven in 2007 Transactions Consumer Insight Travelers rank free breakfast high on must-have items Hot Products IH/M&RS Editors' Choice Award winners Construction Spending up, costs steady in construction Design Window treatments Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - December 10, 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.