BETHESDA, Md.--(BUSINESS WIRE)--Nov. 17, 2000--
Company Plans to be Third-party Manager and Owner in U.S. and Europe
City Hotels USA, Inc., a subsidiary of City Hotels S.A., a Brussels-based hotel ownership company, today announced a new strategy to expand into third-party hotel management. The company will operate hotels for other institutional and individual investors in the U.S. Additionally, the company unveiled plans to expand its owned-hotel portfolio of twelve hotels on both sides of the continent by acquiring up to 20 to 30 hotels in the U.S. and Europe within the next two to three years.
City Hotels has managed its own hotels for more than 25 years, first in Europe and for nearly the past decade, in the U.S., said Jerry Herman, City Hotel USA, Managing Director. We now have the expertise and infrastructure in place, and proven asset value creation, to expand into third-party management. City Hotels has just signed its first, long-term contract to operate the Homewood Suites Hotel, in Falls Church, Virginia and has a goal of adding between 15 to 20 management contracts within the next several years. Our intention is to manage and/or operate approximately 20 to 25 properties in the U.S.
We are one of only a handful of companies that have combined such a global perspective with local expertise, he added. Our international experience, combined with our proprietary management and marketing programs, give us an important advantage as we compete for today's third-party management contracts. As the world continues to shrink, owners increasingly will look for global expertise from their operators, combined with in-depth knowledge of local markets. We have strong relationships with many major brands, including, Hilton, Bass, Choice and Starwood. We intend to be on the forefront of that trend.
We want to remain a mid-sized hotel operator in both the U.S. and Europe, said Stephen Moore, President of City Hotels USA. This will give us the size to take advantage of economies of scale in purchasing and marketing synergies while continuing to attract top talent. Concurrently, we will remain small enough to allow senior management to be personally involved with-and make a difference at-each property we manage.
City Hotels and its management team have operated virtually every major brand, location-type and size of hotel, ranging from upscale, first-class, full-service properties to premium limited-service properties. We will be very selective about which management opportunities we pursue, added Moore. With the financial stability provided by our own hotel portfolio, we will retain our orientation as owner. If we don't believe we can add value to an owner's hotel, we won't take the assignment.
As an independent, third-party manager, City Hotels will seek first-class, full-service hotels and resorts, as well as premium-branded, all-suite, extended-stay and limited-service properties, especially hotels located in primary and secondary markets, ranging in size from 100 rooms to 500 rooms.
In addition, City Hotels will provide an array of consulting services to hotel owners, including asset management, development and construction management, renovation and historic rehabilitation. As an independent operator, we have excellent relationships and experience with all of the major franchise companies, which will help us select the best possible brand for each property we manage, he noted.
Ronda McCrea, City Hotels' Director of Business Development, will be responsible for the development of third-party management contracts. A 16-year hotel industry veteran, she most recently represented four of Choice Hotels International's seven brands in the Northeastern corridor, where she was responsible for developing both new construction and conversion properties. She also held national account sales and operations positions with VingCard-El Safe, MiniBar Systems, Mitel and RCA. She holds a Bachelor's degree in Business Administration from Longwood College.
Acquisition Plans
Herman said that City Hotels, S.A. recently completed a major equity transaction with a subsidiary of The Almanij Group, a large European institutional investor. Initially we will primarily focus on Europe because market conditions currently are more favorable there, and we wish to add to our European portfolio. However, we have the ability and flexibility to move quickly on either continent, and believe U.S. acquisition opportunities will increase over the next year.
In the U.S., City Hotels will seek well located, full-service and all-suite hotels, primarily in urban markets. Typical properties will be interior corridor hotels with 150 to 400 rooms. Target candidates will be cash-flowing properties with minimum renovation requirements. Secondarily, the company will develop new hotels and seek major turnaround opportunities in strong, primary markets.
In Europe, City Hotels will acquire well-located, primarily three- and four-star hotels, in gateway cities. Preferred assets will be 150 to 400 rooms, cash-flowing properties with major international franchise affiliation potential. Additionally, the company will examine new development opportunities in strong, primary markets. We prefer to manage our own hotels but realize in Europe that is not always possible for major internationally branded properties, Herman pointed out. This year we acquired the 131 room Holiday Inn Nice, a 47-room development 4+ star boutique hotel in Paris and a major redevelopment project that will be flagged with a large, international chain in Brussels. We are flexible and creative in the ways we can work with franchise companies and will leverage our strong relationships.
Heading the U.S. acquisition team will be Michelle D. La Motte, Senior Acquisitions and Portfolio Development Manager. She has more than 20 years of hospitality industry experience, including market and feasibility studies, planning and financial structuring, joint venture and lender due diligence, appraisal, strategic planning, hotel operations evaluation, acquisitions and disposition negotiations, and refinancing.
La Motte's hospitality experience includes senior positions with Deloitte & Touche LLP's Valuation and Realty Consulting Group, The Gettys Group, Inc., and The Innovation Group. She holds both a Bachelor of Science and Master's degree in Hospitality Management from the Cornell University School of Hotel Administration.
City Hotels USA, Inc., is the U.S. operation of City Hotels, S.A. a fully integrated, global hotel owner and operator. With more than 25 years in the hotel industry, the company specializes in the acquisition, development and rehabilitation of hotel real estate, and has a proven management company. City Hotels, S.A., founded in 1975, is headquartered in Brussels, Belgium, and is publicly traded on the Brussels Stock Exchange.
CONTACT: Daly Gray Public Relations
Chris Daly or Jerry Daly
703/435-6293
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