Hotel Management February 2012 : Page 14

14 DEVELOPMENT NEW MARKETS Feb r u a r y 2012 | HotelMana g ement . net Big brands bank on Latin America The region emerges as a hot spot for midscale growth with Starwood, Marriott moving in ➔ ■ NEWS BRIEFS ◾ Ritz-Carlton: The Ritz-Carlton, Vienna, owned by an investor represented by Verny Capital, is slated to open in June 2012. Earlier in 2011, Verny Capital also completed the acquisition of The Ritz-Carlton, Moscow. The 202-room hotel is located in two 19th-century palaces listed as culturally protected properties in Austria. ◾ Interstate JV: Interstate Hotels & Resorts acquired the 300-room Crowne Plaza Columbus North hotel through a joint venture with Waramaug Hospitality and a private investment group. The hotel will remain as a Crowne Plaza and immediately undergo a $5.25-million renovation ◾ DoubleTree Japan: Hilton Worldwide signed a management agreement with ASV Investment Co. to introduce the fi rst DoubleTree by Hilton property to Japan. The 228-room DoubleTree by Hilton, Naha, will open in mid-2012 as Hilton Worldwide’s tenth property in Japan ◾ Edition grows: Marriott International will build fi ve new hotels for its lifestyle Edition brand. New projects under construction include Bangkok and Abu Dhabi, as well as contracts signed for hotels in Los Angeles and Gurgaon, India. ◾ Wyndham India: Wyndham Hotel Group expands in India with a non-exclusive development agreement to launch the Howard Johnson brand with 3,000 rooms across 35 new HM properties by 2017. ■ Build By Andrew Sheivachman ASSOCIATE EDITOR The 150-room Courtyard by Marriott Lima is typical of Marriott’s low-cost approach to developing midscale product in Latin America. W hile new hotel development has slowed to a trickle in the United States and Europe, Latin Amer-ica continues to off er attractive terms and growing demand for developers to plan around. “Brazil is clearly one of our priority markets on the global level,” said Ricardo Suarez, Starwood Hotels and Resorts’ VP of development for Latin America. “We’ve been present for 38 years in the market, so we know it quite well. We’re looking for opportunities to grow not just in response to the World Cup or Olympics, but because of all of the positive economic growth and development in the country.” MARRIOTT Starwood recently announced the development of the Sheraton Reserva do Paiva Hotel and Convention Center in northeast Brazil, slated to open March 2014. Th e 289-room hotel is part of a trend featuring new hotel developments in Latin America designed to appeal to the infl ux of international businessmen looking to hold meetings at full-service hotels. “Last year we opened our fi rst managed Aloft in Colombia and see a lot of oppor-tunity in countries like Colombia and Panama,” said Suarez. “It is really a very good moment for Latin America because the economy is very healthy with lots of growth prospects. Th e fact that we’ve added more rooms in our upper-upscale segments See Latin America | page 31 L AS V EGAS –The Siegel Group, owner of four boutique hotels in Las Vegas, acquired a former Crowne Plaza hotel with the intention of refl agging it under a major brand. The six-story, 202-suite property was acquired for $4.2 million in an all-cash transaction, coming in at $26 per square foot. “We acquired it pretty quickly,” said Steve Siegel, presi-dent and CEO of The Siegel Group. “We were in negotiations for several months until we came to an agreement on the property.” Th e Siegel Group owns four other Las Vegas hotels including the Rumor Hotel and Artisan Hotel Boutique. Th e new acqui-sition, located next to Th e Hard Rock Hotel, will off er the owner-Siegel gambles on Las Vegas property The Siegel Group is looking to refl ag the former Atrium Suites Las Vegas as a boutique hotel with a major brand. ship group an opportunity to open a property with meeting and convention space. “Th e location is key being on Paradise Road,” said Siegel. “Th ere’s only so many hotels on Paradise, and the bones of the property are appealing with a lot of common area space for meet-ing and convention areas, which would help out some of our other hotels.” Siegel will look for a partner with a strong reservations system. “We’re talking to several brands, including Starwood, Hilton, to see what will work there,” said Siegel. “It may open as another boutique hotel to add to our collection; we’re not going to give up management but if we can get a good reserva-tions system, that helps us funnel HM during the week.” ■ asheivachman@questex.com LaSalle acquires Park Central Hotel for $396.2M $30-35 million renovate starting in Q4 2012 probably through the N EW Y ORK –LaSalle Hotel Properties acquired fi rst quarter of 2013,” said Barnello. “We’ll do the The Park Central Hotel in New York City in ➔ ■  guestrooms, bathrooms, corridors and lobby.” early January for $396.2 million in a transaction The amount LaSalle will devote to renovating the Park Central Highgate Holdings will continue to operate funded by cash and the issuance of new Hotel. the hotel through the renovation. Barnello also operating shares. said LaSalle will continue to look for acquisition “We’ve got a fantastic address in one of the opportunities in the New York City area as they best cities in the country unencumbered by arise in 2012. brand,” said Michael Barnello, president and CEO of LaSalle. “We need a seller fi rst,” said Barnello. “New York is a target LaSalle will begin a renovation of the property in late 2012 and HM market for us, so we will defi nitely look at everything available. ■ look for new partners to operate the hotel. They’re looking to put between $30 and $35 million into the renovation. “We’re going to asheivachman@questex.com THE SIEGEL GROUP ➔ ■ Refl ag

Development

new markets<br /> Big brands bank on Latin America<br /> <br /> The region emerges as a hot spot for midscale growth with Starwood, Marriott moving in<br /> <br /> By Andrew Sheivachman<br /> associate editor<br /> While new hotel development has slowed to a trickle in the United States and Europe, Latin America continues to offer attractive terms and growing demand for developers to plan around.<br /> “Brazil is clearly one of our priority markets on the global level,” said Ricardo Suarez, Starwood Hotels and Resorts’ VP of development for Latin America. “We’ve been present for 38 years in the market, so we know it quite well. We’re looking for opportunities to grow not just in response to the World Cup or Olympics, but because of all of the positive economic growth and development in the country.”<br /> Starwood recently announced the development of the Sheraton Reserva do Paiva Hotel and Convention Center in northeast Brazil, slated to open March 2014. The 289-room hotel is part of a trend featuring new hotel developments in Latin America designed to appeal to the influx of international businessmen looking to hold meetings at full-service hotels.<br /> “Last year we opened our first managed Aloft in Colombia and see a lot of opportunity in countries like Colombia and Panama,” said Suarez. “It is really a very good moment for Latin America because the economy is very healthy with lots of growth prospects. The fact that we’ve added more rooms in our upper-upscale segments shows that Brazil is a key component of our planning.”<br /> For Starwood, introducing a wider variety of brands to the region is essential. “Typically for us in Latin America we have a lot of interregional and international travelers,” said Suarez. “With more than 50 percent of hotels at least 15 years old in the region, there’s clearly a big opportunity for internationally branded hotels that really set themselves apart from existing supply and focus on positioning themselves to make a big difference.”<br /> Other brands are looking to increase their share of the midscale market to capitalize on the region’s growing pool of middle-class travelers. Marriott, for instance, has increased its presence in Peru to bring new brands to the developing country. The 150-room Courtyard by Marriott Lima will open in 2013, while the upscale 300-room JW Marriott Cusco is slated to open in 2012.<br /> “When you look at our region and ask where the opportunity is to develop at scale, I would say Brazil and Mexico are appropriate because of the size, population and number of secondary cities,” said Laurent de Kousemaker, CDO of the Caribbean and Latin American region for Marriott International. “We’ve seen the economies of Latin America as being relatively resilient to the economic crises with stable growth and political environments. In general, there’s been more of a business-friendly environment in countries like Colombia, which is particularly interested in attracting foreign investment.”<br /> Marriott is targeting Latin American countries where a variety of product can be developed simultaneously to grow the company’s platform in the region. The company currently has 34 hotels in its active Latin American pipeline, with 13 hotels slated for Mexico and just one for Brazil. “When we’re faced with a market that is more domestic and sensitive to price, that forces a natural growth of the midmarket product,” said de Kousemaker. “If you look at our representation in the region, we have Marriott-brand hotels all over and large hotels in the gateway cities. Now we’re shifting gears and looking at what other brands we should bring to secondary markets with a more efficient operating model.”<br /> “Two years ago we signed a multiunit agreement to build 36 Fairfields throughout Mexico, so that’s one platform that’s now being executed upon,” said de Kousemaker. “We’re now looking to do a similar platform in Brazil. It could be more than 50 properties; the potential is very large and the fees for a Fairfield Inn are much lower than for a larger hotel. If we’re going to put in the same effort to design and build a hotel, we’re going to want to spend our time on appropriate concerns.” <br /> <br /> Siegel gambles on Las Vegas property<br /> <br /> Las Vegas–The Siegel Group, owner of four boutique hotels in Las Vegas, acquired a former Crowne Plaza hotel with the intention of reflagging it under a major brand. The six-story, 202-suite property was acquired for $4.2 million in an all-cash transaction, coming in at $26 per square foot.<br /> “We acquired it pretty quickly,” said Steve Siegel, president and CEO of The Siegel Group. “We were in negotiations for several months until we came to an agreement on the property.”<br /> The Siegel Group owns four other Las Vegas hotels including the Rumor Hotel and Artisan Hotel Boutique. The new acquisition, located next to The Hard Rock Hotel, will offer the ownership group an opportunity to open a property with meeting and convention space. <br /> “The location is key being on Paradise Road,” said Siegel. “There’s only so many hotels on Paradise, and the bones of the property are appealing with a lot of common area space for meeting and convention areas, which would help out some of our other hotels.”<br /> Siegel will look for a partner with a strong reservations system. “We’re talking to several brands, including Starwood, Hilton, to see what will work there,” said Siegel. “It may open as another boutique hotel to add to our collection; we’re not going to give up management but if we can get a good reservations system, that helps us funnel during the week.”

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