The Daily Lodging Report for 3/01/06
Presented by HVS International and Gaming USA Corp.
Alan R. Woinski, Editor
Info: www.gamingusacorp.com - http://dnaproductions.com/lodgeorder.htm

The DJIA rose 60 points while Nasdaq was up 33 points. The 10 year treasury yield was up .04 to 4.589%. Lodging stocks were modestly lower although Ashford Hospitality Trust rose to another new high and Lodgian and Strategic Hotel Capital both saw a rise of more than 3%.

STR reported U.S. lodging data for the week ended 2/25. Overall RevPAR was up 9.1% but it was upscale (up 10.1%), midscale w/o F&B (up 12.9%) and w/ F&B (up 9.3%) along with independents (up 10.5%) which led the way.

Luxury and upper upscale only rose 3.1% and 6.3% respectively and location wise, urban was only up 3% but resort was up 13.5%, suburban was up 12% and airport was up 10%. The timing of President’s Day and Winter Break along with lingering weather cancellations from the Northeast obviously played with these results. In the top markets, Houston was up 40.4%, New Orleans was up 32% and Oahu was up 22.9%. Anaheim, Dallas, Miami, Phoenix, San Diego and St. Louis were up in the teens but NY was down 14.9% and DC was down 18.5%. NY was up against a tough comparison with The Gates exhibit in Central Park last year.

Strategic Hotel Capital reported 4th quarter FFO of $0.33, well ahead of the $0.26 estimates. North American RevPAR was 7.9% and Total RevPAR growth was 9.8%. SLH maintained prior full year 2006 FFO guidance but 1st quarter guidance appears to be below the Street. Deutsche Bank called that just a quarterly modeling issue as prior guidance did not include quarterly breakouts.

MeriStar Hospitality Corp. announced that they completed the sale of the previously announced sale of a portfolio of 9 hotels and a golf and tennis club, all in Florida to an affiliate of Blackstone Group for $367 million, subject to adjustments made at closing. Obviously this deal was too far along to stop once MHX agreed to be acquired by Blackstone but this really makes no sense to go through with this considering all of MHX is being acquired by Blackstone. Then again, the money from this is being used to redeem the remaining $106 million of its 10.5% senior unsecured notes due 2011, and $75 million to term loan debt under their secured credit facility and the retirement of the $44 million mortgage on the Hilton Clearwater Beach Resort.

Starwood Hotels & Resorts Worldwide announced a November 1, 2006 reopening of the US Grant in San Diego. The 272 room hotel will be managed by Starwood’s Luxury Collection brand is owned by the Sycuan Band of the Kumeyaay Nation. The grand reopening follows a $52 million extensive renovation.

The Sheraton Portland Airport Hotel is nearing the end of the first phase of a $5 million renovation. The upgrades include a grand lobby entrance with vaulted ceilings opening the area to abundant natural lights, a new 2,500 square meeting room and a complete remodeling and upgrade to many of the hotel’s 213 guest rooms. The hotel is now undertaking phase two, a complete redesign of the property’s bar and restaurant facilities.

Linquist & Craig Hotels announced the recent sale of its leasehold interest in the Doubletree Hotel Los Angeles-Westwood for $33 million to a joint venture between Behringer Harvard and Realty American Group. Stephen Craig, CEO and sole shareholder of Linquist & Craig, will continue to manage the property for Behringer/Realty. LogiCap Real Estate Partners acted as special transaction advisor to Mr. Craig. HVS Capital Corp marketed the property since April 2005.

DTLL, Inc. announced they agreed to acquire the existing Tahoe Inn in Brockaway, California on the Nevada border in North Shore Lake Tahoe. The property is an operating 98 room Inn with additional 45 unit building rights sitting on 3 acres. DTLL wants to be established as a high end Hospitality, timeshare, resort destinations and development company. They announced yesterday they received an option to purchase an existing 40% stake in Grand Sierra Resorts, a company that has an agreement to acquire the Reno Hilton from Harrah’s Entertainment.

The Tamarack bill has been submitted in Idaho to loosen liquor license laws so the 225 room, 300,000 square foot Tamarack Resort in Donnelly can have a liquor license. The Tamarack is being developed by Andre Agassi, Steffi Graf together with Fairmont Hotels and Resorts. Current Idaho laws govern who is allowed to sell liquor by the drink. The sponsor of the bill said that the state has to be realistic and if someone is going to go to a luxurious ski resort, they are going to expect it to have a lounge serving alcohol. The existing Idaho law was passed in 1947 for the protection, health, welfare and safety of Idaho residents and for the purpose of promoting and encouraging temperance. Some are saying that if the state does not change the law, the deal to develop this property will collapse.

Optimum Hotel Brokerage announced that they closed on the sale of the 153 unit Days Hotel Rochester Airport in Rochester, NY. Optimum represented the seller in the transaction. The hotel was purchased by a regional management company who plans an extensive renovation and repositioning of the asset to a Quality Inn.

The Blue Rose, Orlando’s newest luxury condo hotel which is being planned said they sold more than 200 luxury condo hotel residences in less than 24 hours, representing more than $100 million in sales. CMA Companies, the developer, said they expect to raise prices based on the demand.

Cuba reported a new record of tourist arrivals in one day on February 21st, with 66,910 persons checking into hotels. A new record had been set on February 14th with 65,280 tourists.

Personality Hotels and Pegasus Solutions announced the hotels will be represented by PEGS’ Utell by Pegasus marketing and representation service. Personality Hotels has five upscale hotels located in the Union Square district of San Francisco. The agreement is for three years.

Hilton Hotels Corp. entered into a $5.75 billion credit agreement with a group of lenders a week ago. The agreement replaced one entered into on March 23, 2005. HLT borrowed $4.8 billion under the agreement to fund the acquisition of the hotel assets owned by Hilton Group PLC.

Oxford OBG-Waterton Skokie Hotel Property Company LLC, a joint venture of Chicago-based Oxford OBG Hospitality Investment Fund, and Chicago-based Waterton Associates LLC has acquired the 20,000 square foot North Shore Hotel and Executive Conference Center in Skokie, Illinois. Plans for the 367 room, full service Hotel and Conference Center that sits on six acres will include the execution of a comprehensive, multi-million dollar physical redevelopment, operational repositioning and strategic re-branding of the hotel. Once completed, the conference center is scheduled to become the Doubletree North Shore Hotel and Executive Conference Center.

A new hotel consulting firm Hospitum has been formed by lodging industry veteran Stephen Hennis. Hospitum will specialize in the upscale and luxury sectors of the lodging industry, providing various consulting services and products to owners, developers, management companies and financial institutions. Hennis most recently served as VP of hospitality investments for Lowe Hospitality Group and Destination Hotels & Resorts.

On Command Video Corp. announced a three year master agreement with RockResorts to offer On Command's video on demand pay for view services in RockResorts’ luxury resorts throughout the U.S. The properties will be converted to On Command’s digital entertainment system.

Lodgian Inc. announced that James MacLennan will be named executive VP and CFO. He joined the company today as VP but will not become executive VP and CFO until the retirement of CFO Linda Borchert Philp takes place on or about March 15th following the filing of LGN’s Form 10K with the SEC. MacLennan was previously CFO and treasurer of Theragenics Corp.

Accor announced they are selling the Sofitel Paris Forum Rive Gauche Hotel to Marriott International. The 782 room hotel is one of 50 properties that Accor has designated for disposal. UBS expects Accor to also sell off casinos, on board train services, travel agencies and restaurants.

The new Crowne Plaza Estepona-Costa del Sol is due to open this month. There are 146 bedrooms including 32 junior suites, 6 duplex penthouse suites and one exclusive presidential suite in the Southern Spain resort.

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