Volume 221, Number 1

A Q U E S T E X PUBLICATION

Hotel
The Leading Newsmagazine of the Hospitality Industry since 1875

www.HotelMotel.com / hmm@questex.com

Global Hyatt ups its ante

Company banks on
vertical integration
to bolster portfolio
By Jeff Higley

Global Hyatt portfolio

Properties /o of portfolio Guestrooms % of portfolio
Hyatt (Americas)

129

172

62,559

44.0

53

71

20,605

14.5

Hyatt (Europe, Africa

& Middle East)
31

4.1

9,179

6.5

EDITOR-IN-CHIEF

Hyatt (Asia Pacific)

O (K Ac;()^A year after launching

its vertical-integration strategy,
(ilobai Hyatt Cxirp. has scratched
its way onto the roster of giants in
the lodging industry.
Wirh the addirion of the Hyatt
Place Itornierly AnieriSuircsl and
Siinimerfield Suites brand to its
portfolio, Glolxil Hyatt's reach extends from luxury and upscale
properties (Hyatt Hotels) to highend limited-service hotels (Hyatt
Please turn to page 58

Hyatt Place*

146

19.5

18,038

12.7

Microtel Inns

259

34.6

18,623

13.1

Hawthorn Suites

98

13.1

9,317

6.6

Summerfield Suites

21

2.8

2.982**

2.1

Timeshare
142,033

TOTAL

'formerly AmeriSuites, "estimate based on H&MM research

Source: Global Hyatt Corp., H&MM research

Chicago-based entity
flush with brands
after Summerfield deal
By Jeff Higley
EDITOR-IN-CHIEF

CuiCACdGiobai Hyatt Corp.'s

latest acquisition solidifies its strategy to become a multisegmented
lodging company.
'1 he Chicago-based company
in hue November acquired the
Summerfield Suites extended-stay
brand h'om partnerships between
iiffiliates ofrhc Blackstone Croup,
Cencom Group and Lehman
Brothers. The deal, which was expected to close Jan. 5, includes
Please turn to page 58

Hilton buys Hilton

By Jeff Higley
EDITOR-IN-CHIEF

BEVERLY HIELS. CAEIR AND

LONDONHilton

T h e c o m b i n e d Hilton Hotels Corp. and

Hilton Group portfolio will comprise 2,800
t)otels, including the Hilton Sao Paulo
(Brazil) Morumbi.

NEW CONTACT INFO

HOTEL & MOTEL
MANAGEMENT'S and HOTEL
DESIGN'S new mailing address

is 600 Superior Ave. East,

Suite 1100, Cleveland OH
44114. Our new toll-free
phone number is (800) 6691668, the main number is
(216) 706-3700, and our new
fax number is (216) 706-3711.

BREAKINGneWS
Choice Hotels International extended its employment
agreement with Charles A.
Ledsinger Jr., president and
c.e.c, for four years.
Ledsinger's contract now
runs until December 2009.
He joined Choice in 1998.
Dieter Huckestein, chairman and c.e.o. of Conrad
Hotels and president of the
Hilton Global Alliance, both
of which are part of Hilton
Hotels Corp., is retiring after
35 years with the company.
The move will be effective
early this year. Huckestein's
duties with Conrad Hotels
will be assumed on an interim basis by Matthew J. Hart,
Hilton's president and c.o.o.

U.S., international companies reunite after 40 years

Hotels

Cxjrp.'s pending S5.7-billion acquisition of the lodging assets of

Hilton Group pic opens new
frontiers for what the company
calls its select-service brands.
The deal, which was announced Dec. 29 and is expected to close during the first quarter of 2006, will allow brands
-uch as Hampton Inn, Hilton
Garden Inn, Homewood Suites
and Embassy Suites to seek development projects overse;is for
the first time, according to executives who participated in a
conference aill held ;ifter the ;innouncement of the deal.
"... Aside from bringing the
Hilton company together, that's
Please turn to page 54

January 9, 20Q6

Jerry Herman, former president and c.e.o. of Arlington

Hospitality, and real-estate
and hotel investors William
and Robert Lipnick formed
BJB Hotels LLC. It will o w n ,

develop and manage hotels.

Deal to help Host hoist

hroader range of flags
By Heather Gunter
ASSOCIATE EDITOR

BETHESDA, M D . AND WHITE

Plj\lNS, N.Y.A $4.1-billion

transaction with Host Marriott
Corp. will forward Starwotxi Hotels & Resorts Worldwides ttansformation from a real-estate company with several hotel brands to
a company with an emphasis on

branding lifestyle hotels.

In a defmitivc agreement between the companies. Host Marriott will acquire 38 properties
from Starwood, comprising
18,964 guestrooms, which Starwood will continue to tnanage
for up to 40 years.
Following the close of the deal.
Please turn to page 56

The average revenue per

occupied room that comes
from a U.S. hotel's spa increased $6.14 percent in
2004 to $40.09, according
to a study conducted by
spa consulting company
Health Fitness Dynamics. A
10,000-square-footto
20,000-square-foot spa experienced the largest increase, jumping $13.06,
compared with increases of
$1.29 for smaller spas and
$6.93 for larger spas.

News

H&MM January 9, 2006

Hilton
Continuedfrom page 1
probably the hi^est opportunity
we seetaking Hampton Inn,
Hilton Garden Inn, Embassy
Suites ... and taking them to markets we find partictilarly anractive,
like India, perhaps China," said
Matthew Hart, president and
c.o.o. of Hilton Hotels Corp.
Tom Keltner, executive v.p.
and president of brand petfor-

mance and development, said determining wbicb areas best fit

which brands will be thefirstsignificant step for the company.
"Once we figure out wbat
areas and what brands, and there's
a lot of opportunities fot us, then
we canfigtireout wben we want
to m a n ^ , when we want to fianchise, or are there some other
structures that make sense in
Icountries such as] India or China
that would allow us to grow
[more] rapidly than just individ-

HotelMotel.com

ual franchises but without committing a lot of our capital," he

said. "We're going to be open to a
lot of different things as long as
tbe brand still stands for something and we control the quality
and maintain tbe performance."
The deal brings together a
company that was separated in
1964 when founder Conrad N.
Hilton spun off Hilton Hotels
Corp.'s international business to
shareholders. The business ultimately was acquired by Ladbroke

Grotip pic, wbich operated it as a

subsidiary called Hilton International, which is another name fot
Hilton Group.
The deal includes 40 corporate-owned properties, 200 leased
hotels, 160 fee contracts and 80
Living Well Health Clubs. HHC
also will acquire full ownership of
tbe Hilton HHonors guest-loyalty program and Hilton Reservations Worldwidebotb of which
had been joint ventures between
tbe two entities before the deal.

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New Construction- Hotels, Motels, Resorts, Strip Plazas, Dry Cleaning Plants, Office Buildings

Tbe company's beadquarters will

remain in Beverly Hills.
Once tbe deal is fmalized,
Hilton Hotels Corp.'s portfolio
will include about 2,800 boteis
comprising 475,000 guestrooms
in 80 countries. Tbe combined development pipeline of both companies comprises about 575 hotels
comprising 78,000 guestrooms.
"The strategy tbat Hilton InternationiJ bas been taking is similar to ours, and tbat is to emphasize the fee part ofthe btisiness,"
Hart said. "They've been selling
some of theit boteis and maintaining long-term management
contracts much the same that we
have."
Bob La Forgia, HHCs senior
v.p. and c.f o., said tbe assets tbe
company is acquiring are strong
performers, particularly in the
United Kingdom and Europe.
He also said the company
would be willing to pan with the
ownership of those assets.
"Part of our strategy is to look
for opportunities to sell those assets at very good prices," La Forgia said. "[In 2005] we sold over
a billion dollars of our domestic
assets at exttemely good prices
and we hope to execute a similar
strategy internationally after we
close this transaction."

Moving on

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Following the completion of the

deal, which is subject to governmental clearance and the approval
of Hilton Group shareholders,
Hilton International will be renamed 1-adbrokes pk. It will operate as a gambling and betting
business.
The fmal acquisition price
could cbange based on excbange
rates at the time ofthe dosing.
Hart said the timing of rhe
deal was perfect in several ways,
including favorablefinancialmarkets and low interest rates.
"One of tbe things tbat has always beld us back is thar our investor base never really considered
us to be a glohal company and
didn't have some opportunities
tbat others had," Hart said. "Now,
with this deal, we have tbose."
Ian Carter, c.e.o. ot Hilton International, will become executive
v.p. and ce.o. of HHCs international business.
The company wiil refer to
Carter's international side ofthe
business as Hilton International
because it will operate as a wholly owned subsidiary.
jhigley@(juestex. com

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