CHICAGO, Jan 9, 2001 (BUSINESS WIRE) -- Taking an initial--and transforming--step to strengthen and sustain independent hotels in the crucial competition with global chains, the recently formed IndeCorp Corporation has acquired two global hotel groups, Summit Hotels & Resorts and Sterling Hotels & Resorts, it was announced today by Peter Cass, President and CEO of IndeCorp and President and CEO of Preferred Hotels(R) & Resorts Worldwide.
Summit and Sterling, acquired from Pegasus Solutions, Inc. (Nasdaq: PEGS) for approximately US$12 million, are joining Preferred under the IndeCorp holding company umbrella. The three subsidiaries, consisting of distinctive wholly owned independent hotels, will more than double IndeCorp's resource base to approximately US$29 million. The added revenues provided by multiple brands will greatly expand IndeCorp's ability to offer state-of-the-art shared services in such essential and costly areas as customer relationship management and e-commerce, as well as procurement and other back-office functions. IndeCorp, in turn, is projected to generate revenues of US$200 million for its brands' member hotels and resorts for calendar year 2001.
Summit has 155 independent hotel members in 44 countries; Sterling, 140 in 30 countries. That more than triples the total number of independent hotel properties under IndeCorp to 405, including the 110 under the Preferred brand, throughout the world.
The added resources that come from IndeCorp's operating scale can make a defining and pivotal difference for independent hotels competing against global chains, Mr. Cass said. We recognized the opportunity, developed the strategy based on industry research by PricewaterhouseCoopers, launched IndeCorp in September with Preferred as the initial brand, and some three months later are adding our first acquisitions. The world is changing and independent hotels, while retaining their high standards and charismatic individuality, are changing with it. We are multiplying their power exponentially through IndeCorp's expanded resources, reach, capabilities and technological expertise. It is a strategy that sustains independents, and builds for their future. We are looking forward to other acquisitions and/or mergers in the near term, he said.
IndeCorp is the structural answer to increasing the competitive positioning of independent hotel brands, said Peter Abby, Chairman of the Board of IndeCorp. The high standards of independent hotels will not change. Their individuality will be preserved. What will change is the force behind their sales and marketing efforts--enhancing consumer awareness and brand recognition on a global basis, he said.
Summit and Sterling are ideal acquisitions for IndeCorp--they add international value, have complementary cultures and governance, and provide global sales and marketing resources. Summit is a prestigious brand of independent hotels and resorts in city centers and major leisure destinations around the world. Sterling is a reservations/representation company serving a diverse global collection of independent luxury properties.
Pegasus Solutions, Inc. will continue to provide reservations technology, call center services, electronic distribution, and commission processing to Summit and Sterling hotel members. In addition, IndeCorp has chosen Pegasus to provide these same services for Preferred, effective July 2001. IndeCorp will manage the vendor relationships for all brands as well as provide value-added reservations services such as account management, training, revenue management and data management.
In addition to achieving the critical mass needed to compete in the global marketplace, the IndeCorp model allows for increased operating scale resulting in greater efficiencies and savings, the aggregation of capital for technology, and more attractive financing opportunities. At its core and through its cumulative strength, IndeCorp provides independent hotels with the resources they need--and cannot otherwise secure--while fiercely protecting their independence, individuality and diversity.
Each brand under IndeCorp will have its own quality standards and market position, as well as its own distinctive culture. IndeCorp will protect these distinctive qualities while distinguishing, reinforcing and promoting brand strengths with added resources, including marketing technology.
The benefits provided to independent hotels through IndeCorp include:
- Proven brand management from a company with the highest
average production per independent hotel member;
- Proven reservations account management;
- State-of-the-art e-commerce solutions, customer relationship
management and sales management technologies;
- Expanded global marketing and sales coverage; and
- Successful and innovative brand partner programs.
At the same time, the multiple brand model works for consumers, preserving the culture of choice vacationers and business travelers want. Consumers will have access to new, heightened levels of information, and be served by the most sophisticated Internet and reservations systems. They will also be able to take advantage of new marketing partnerships and programs.
Travel agencies will find important efficiencies and convenience through a centralized, consistent commission payment program, while streamlined negotiations procedures across the board will enhance corporate purchasing programs.
Meeting planners and others booking facilities for groups will have access to the broadest range of options from a single source through IndeCorp-level sales representatives. Clear lines of communication and accountability will also greatly facilitate meeting an account's special needs.
At the heart of the strategy and serving all audiences is the significant variety and greatly expanded number of properties and destinations available, coupled with brand-level standards of quality and service.
The Preferred Board of Directors approved the IndeCorp business model on July 23, 2000, and Preferred shareholders unanimously approved the creation of IndeCorp as an umbrella holding company on September 20, 2000. Headquartered in Chicago, IndeCorp is designed to protect and sustain independent hotels and independent hotel brands through a range of state-of-the-art shared services for its wholly owned subsidiaries.
Established more than 30 years ago, Preferred Hotels(R) & Resorts Worldwide (www.preferredhotels.com) is a global brand of more than 110 of the world's finest independent luxury hotels and resorts. To qualify as a Preferred hotel or resort, each property must adhere to Preferred's Standards of Excellence(R), an exhaustive quality assurance program that includes an annual, third-party unannounced audit of 1,600 standards and practices. Preferred generated more than US$100 million in revenue for its hotels and resorts in the fiscal year ending June 30, 2000. Headquartered in Chicago, the company has sales offices in New York, Los Angeles, San Francisco, London, Paris, Milan, Zurich and
Frankfurt.
Summit Hotels & Resorts (www.summithotels.com), headquartered in London, is a collection of 167 luxury, independently owned hotels located in more than 125 city centers and resort destinations worldwide. Each individual property in the Summit brand has an established reputation as being among the world's finest hotels, offering exceptional levels of service and facilities.
Sterling Hotels & Resorts is a collection of 141 independent luxury hotels in 30 countries, located in key business and resort destinations throughout the world.
Dallas-based Pegasus Solutions, Inc. (www.pegs.com) is a leading provider of end-to-end reservation distribution solutions to the hotel industry worldwide. Its services include central reservations systems; third-party marketing and reservation representation services, including Utell and Golden Tulip Worldwide; electronic distribution services that connect more than 38,000 hotels to the Internet and to the global distribution systems (GDS); commission processing and payment services; the consumer travel Web site TravelWeb.com (www.travelweb.com); data warehousing and database marketing and consulting services; and soon, a Web-based property management service. Pegasus' customers comprise more than 100,000 travel agencies around the world, including nine of the 10 largest U.S.-based travel agencies; approximately 40,000 hotel properties around the globe, including 18 of the 20 largest hotel companies in the world based on revenues and total number of guest rooms; and more than 240 Web sites/services that have contracted to have their hotel reservations Powered by Pegasus(TM). In addition to its corporate headquarters in Dallas, Pegasus has 39 offices in 25 countries, including regional hubs in Phoenix, Arizona (USA), London and Singapore. The company's stock is traded on the Nasdaq National Market under the symbol PEGS.
CONTACT: Linden Alschuler & Kaplan
Lloyd Kaplan, 212/575-4545
lkaplan@lakpr.com
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