Four Seasons of Growth
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|Revenue per available room went up for Strategic Hotels in 2010, and CEO Laurence Geller says it will continue to do so as it sells assets in Europe and buys assets in the US. (Us too: We buy Swiss chocolate and sell Girl Scout cookies.)|
|On the company's quarterly call, Laurence said Strategic closed on the Four Seasons in Jackson Hole and another in Silicon Valley Thursday, with an average cost per key of $273k. That's far below replacement cost, says CFO Diane Moreland. The company also sold off the InterContinental Prague and got a cash release from a refi of a hotel in Hamburg. The Marriott Champs de Elysee is also on the market. With RevPAR increasing by 7.3% to 8.1% per quarter and customer satisfaction up 70 bps, Strategic is feeling good about the hotels they now own.|
|Refinancing has also been key in the past year as investors look to an asset class that has quick turnaround, Laurence says. Strategic's refinancing of the Fairmont Hotel in Chicago and the Westin St. Francis in San Francisco helped bring in some cash. They also entered a partnership with Blackstone and KSL for the Hotel Del Coranado in San Diego, remaining a 43% owner and manager while allowing Blackstone to bring capital to the project. Overall, Strategic's officers expect the hotel market to continue to improve: group room booking rates are increasing by 10% to 20%month-over-month.|