Starwood Corporate : exploring options to boost value inc acquiring or being acquired
Apr 18, 2015, 6:36 pm
#16
Join Date: Mar 2010
Posts: 1,324
Wirelessly posted (Mozilla/5.0 (Linux; U; Android 4.4.2; en-us; LGL31L/V100 Build/KOT49I.L31L10d) AppleWebKit/537.36 (KHTML, like Gecko) Version/4.0 Chrome/30.0.1599.103 Mobile Safari/537.36)
I don't believe a low end brand is needed in the SW portfolio. Four Points is flexible enough that it can cover the mid range down to the upper budget range depending on location. I won't disclose the specific area that we were thinking to put a Four Points with EB investment money, but the location would have relatively low land or existing property-to-convert acquisition costs and lower operating expenses than an urban or urban-adjacent center - so I can offer a solid quality product and not break anyone's nightly budget...plus the brand gives me flexibility to offer meeting space, wedding venue space, etc - I don't know many people who book their wedding reception at a local Travelodge or Motel 6.
Frankly I don't want a low end property to own - I don't need the hassle of constant refurbishment to undo guest damage, hiring security to chase out prostitutes and drug dealers, etc etc. I want mid priced business travelers and road trippers who appreciate the features, quality and value of my property and the brand is a magnet to draw SPG members into an area that has no current SPG coverage.
Days Inn, Extended Stay America, Value Inn, etc have a place in the American hotel landscape, but not as part of the Starwood portfolio. Now I believe there are a few European-only budget chains that are low priced, well maintained, very clean and offer a decent feature set (like Motel One of Germany or the Ibis brand), but I don't think you can "upscale" a budget brand in the US market and not have the individual properties end up trashed because of our unfortunate cultural practices.
Please do not open a new Four Points anywhere at anytime for any reason. Aloft would be preferred if they upgrade the mattresses.
Originally Posted by bocastephen
Instead of a large deal with IHG or Wyndham couldn't Starwood buy a limited assortment brand like La Quinta or Extended Stay America to cover their lack of properties on the lower end spectrum? Not advocating it but hasn't there also been talk that Accor wanted to rid themselves of the Motel 6 hotels brand. A deal with Carlson would also give them nice coverage on the lower end spectrum in the U.S. with Country Inn and Suites and help Carlson on the higher end in the U.S.
Frankly I don't want a low end property to own - I don't need the hassle of constant refurbishment to undo guest damage, hiring security to chase out prostitutes and drug dealers, etc etc. I want mid priced business travelers and road trippers who appreciate the features, quality and value of my property and the brand is a magnet to draw SPG members into an area that has no current SPG coverage.
Days Inn, Extended Stay America, Value Inn, etc have a place in the American hotel landscape, but not as part of the Starwood portfolio. Now I believe there are a few European-only budget chains that are low priced, well maintained, very clean and offer a decent feature set (like Motel One of Germany or the Ibis brand), but I don't think you can "upscale" a budget brand in the US market and not have the individual properties end up trashed because of our unfortunate cultural practices.
Apr 18, 2015, 6:51 pm
#17
Join Date: Jul 2003
Location: CT/ Germany - Ich spreche deutsch
Programs: UA 1K, Bonvoy LTTE, HH Dia, HY Expl
Posts: 4,655
I don't believe a low end brand is needed in the SW portfolio. Four Points is flexible enough that it can cover the mid range down to the upper budget range depending on location. I won't disclose the specific area that we were thinking to put a Four Points with EB investment money, but the location would have relatively low land or existing property-to-convert acquisition costs and lower operating expenses than an urban or urban-adjacent center - so I can offer a solid quality product and not break anyone's nightly budget...plus the brand gives me flexibility to offer meeting space, wedding venue space, etc - I don't know many people who book their wedding reception at a local Travelodge or Motel 6.
Frankly I don't want a low end property to own - I don't need the hassle of constant refurbishment to undo guest damage, hiring security to chase out prostitutes and drug dealers, etc etc. I want mid priced business travelers and road trippers who appreciate the features, quality and value of my property and the brand is a magnet to draw SPG members into an area that has no current SPG coverage.
Days Inn, Extended Stay America, Value Inn, etc have a place in the American hotel landscape, but not as part of the Starwood portfolio. Now I believe there are a few European-only budget chains that are low priced, well maintained, very clean and offer a decent feature set (like Motel One of Germany or the Ibis brand), but I don't think you can "upscale" a budget brand in the US market and not have the individual properties end up trashed because of our unfortunate cultural practices.
Frankly I don't want a low end property to own - I don't need the hassle of constant refurbishment to undo guest damage, hiring security to chase out prostitutes and drug dealers, etc etc. I want mid priced business travelers and road trippers who appreciate the features, quality and value of my property and the brand is a magnet to draw SPG members into an area that has no current SPG coverage.
Days Inn, Extended Stay America, Value Inn, etc have a place in the American hotel landscape, but not as part of the Starwood portfolio. Now I believe there are a few European-only budget chains that are low priced, well maintained, very clean and offer a decent feature set (like Motel One of Germany or the Ibis brand), but I don't think you can "upscale" a budget brand in the US market and not have the individual properties end up trashed because of our unfortunate cultural practices.
Apr 18, 2015, 8:45 pm
#18
A FlyerTalk Posting Legend
Join Date: Sep 2002
Location: LAX/TPE
Programs: United 1K, JAL Sapphire, SPG Lifetime Platinum, National Executive Elite, Hertz PC, Avis PC
Posts: 42,172
Frankly it's not what you and I want but what the investors pressuring Starwood want. I'm happy with the portfolio like you seem to be but that is not what they are under pressure to do moving forward. My comment was that it seems better (at least for us) if they buy a low end chain vs look for a deal with IHG or Wyndham.
Wirelessly posted (Mozilla/5.0 (Linux; U; Android 4.4.2; en-us; LGL31L/V100 Build/KOT49I.L31L10d) AppleWebKit/537.36 (KHTML, like Gecko) Version/4.0 Chrome/30.0.1599.103 Mobile Safari/537.36)
Please do not open a new Four Points anywhere at anytime for any reason. Aloft would be preferred if they upgrade the mattresses.
Please do not open a new Four Points anywhere at anytime for any reason. Aloft would be preferred if they upgrade the mattresses.
The beauty of doing projects with EB investors is their prime concern is getting the green card vs demanding a high return on their investment...so the other investors would be more like silent partners vs active. Don't get me wrong, we're not doing this if we can't make money, but there is no reason why making money and offering an amazing hotel stay experience (especially for brand loyalists) should be mutually exclusive.
Apr 19, 2015, 12:24 am
#19
Join Date: Sep 2013
Programs: SPG,HH,IHG
Posts: 786
More income for SPG ?
==> Tribute collection ?
==> Tribute collection ?
Apr 20, 2015, 12:16 am
#20
Original Poster
Join Date: Jan 2013
Location: London
Programs: BA Gold / OnBusiness, SPG Lifetime Plat 100, AmEx Centurion & BAPP, Superking Westin Heavenly Bed :)
Posts: 1,142
Apr 20, 2015, 1:13 am
#21
Join Date: Jul 2001
Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star
Posts: 5,536
This article was written with SPG being the acquired chain. But with their current stock price, it would be difficult for an acquirer to pay a premium to buy SPG. For that reason, I'd expect SPG to buy another chain or brand to expand their portfolio.
Much to my chagrin, the most profitable segment of the hospitality industry is on the low end right now. To that end, I'd look for SPG to make an acquisition on the lower end of the spectrum.
I'd love it to be Club Carlson, as it has some acceptable international properties. (I think that everything domestic is junk, but that's my opinion).
Other possibilities:
Best Western
Choice
Wyndham
La Quinta
Motel 6
Vantage Hospitality Group
Smaller, more easily absorbed chains:
AmericInn
Drury Hotels
Intown Suites
I'd like to see the acquisition of one or more of the following but none would fit the lower end requirement:
Fairmont
Loews Hotels
Omni
There are plenty of other chains that I've missed that SPG could easily acquire to make shareholders happy.
While we are currently watching this from the sidelines in fear of an uncertain future, the end result could be something like Hyatt's acquisition of AmeriSuites. They converted those properties into Hyatt Place and are decent lower end properties. I hope that SPG's able to pick up one of the above and do the same.
Much to my chagrin, the most profitable segment of the hospitality industry is on the low end right now. To that end, I'd look for SPG to make an acquisition on the lower end of the spectrum.
I'd love it to be Club Carlson, as it has some acceptable international properties. (I think that everything domestic is junk, but that's my opinion).
Other possibilities:
Best Western
Choice
Wyndham
La Quinta
Motel 6
Vantage Hospitality Group
Smaller, more easily absorbed chains:
AmericInn
Drury Hotels
Intown Suites
I'd like to see the acquisition of one or more of the following but none would fit the lower end requirement:
Fairmont
Loews Hotels
Omni
There are plenty of other chains that I've missed that SPG could easily acquire to make shareholders happy.
While we are currently watching this from the sidelines in fear of an uncertain future, the end result could be something like Hyatt's acquisition of AmeriSuites. They converted those properties into Hyatt Place and are decent lower end properties. I hope that SPG's able to pick up one of the above and do the same.
Apr 20, 2015, 2:01 pm
#22
Join Date: Mar 2014
Programs: AA Exec Plat, Hilton Diamond, Marriott Bonvoy Platinum
Posts: 235
Wall Street is always pressuring companies to diversify their product offering. But mergers often fail to create value because a combined company fails to maximize both a high-end operation and a low-end operation more effectively than if the two were run separately. Large, complex mergers are fraught with risk.
If investors really wanted to diversify their portfolio between high-end and low-end hotels, they could do so most efficiently by just buying two different stocks.
Forcing a company to go through fundamental changes like a merger or acquisition just because something is "missing" from its portfolio doesn't usually make sense, except in the very short-term way of thinking.
If investors really wanted to diversify their portfolio between high-end and low-end hotels, they could do so most efficiently by just buying two different stocks.
Forcing a company to go through fundamental changes like a merger or acquisition just because something is "missing" from its portfolio doesn't usually make sense, except in the very short-term way of thinking.
Apr 20, 2015, 2:24 pm
#23
Join Date: Mar 2007
Posts: 3,990
Wirelessly posted (Mozilla/5.0 (Linux; U; Android 4.4.2; en-us; LGL31L/V100 Build/KOT49I.L31L10d) AppleWebKit/537.36 (KHTML, like Gecko) Version/4.0 Chrome/30.0.1599.103 Mobile Safari/537.36)
Please do not open a new Four Points anywhere at anytime for any reason. Aloft would be preferred if they upgrade the mattresses.
Please do not open a new Four Points anywhere at anytime for any reason. Aloft would be preferred if they upgrade the mattresses.
Cheers,
Apr 29, 2015, 5:59 am
#24
Join Date: Apr 2003
Programs: B6 Mosaic, Bonvoy LT Titanium (x SPG LT), IHG Spire, UA Silver
Posts: 5,844
Potential big changes
http://www.bloomberg.com/news/articl...es-?cmpid=yhoo
Details are sketchy but Starwood has hired a firm to look into the possibility of being acquired or acquiring another company to increase their global foot print and cut costs.
More details may be announced on the earnings call later today.
Details are sketchy but Starwood has hired a firm to look into the possibility of being acquired or acquiring another company to increase their global foot print and cut costs.
More details may be announced on the earnings call later today.
Apr 29, 2015, 6:40 am
#25
Moderator: British Airways Executive Club, Marriott Bonvoy
Join Date: May 2006
Location: Englandshire
Programs: SPG LT Plat, BA G, BD*LG, MG Blue+ ...
Posts: 16,017
As Starwood future corporate direction looks like it'll be an active topic over the next few weeks and months, I've combined the recent threads and retitled for clarity
/mod
/mod
Apr 29, 2015, 7:18 am
#26
Join Date: Sep 2005
Programs: AC MM E50 , Former SPG, now Marriott LT Plat
Posts: 6,251
The first thing I thought of when I heard the announcement on the radio this
morning was " S..t! I am 16 stays ways from Lifetime Plat ( which I will make this
year), and Starwood will be disappear along with my lifetime status!!!"
morning was " S..t! I am 16 stays ways from Lifetime Plat ( which I will make this
year), and Starwood will be disappear along with my lifetime status!!!"
Apr 29, 2015, 7:46 am
#27
Join Date: Sep 2013
Programs: SPG,HH,IHG
Posts: 786
Apr 29, 2015, 8:09 am
#28
A FlyerTalk Posting Legend
Join Date: Sep 2002
Location: LAX/TPE
Programs: United 1K, JAL Sapphire, SPG Lifetime Platinum, National Executive Elite, Hertz PC, Avis PC
Posts: 42,172
http://www.bloomberg.com/news/articl...es-?cmpid=yhoo
Details are sketchy but Starwood has hired a firm to look into the possibility of being acquired or acquiring another company to increase their global foot print and cut costs.
More details may be announced on the earnings call later today.
Details are sketchy but Starwood has hired a firm to look into the possibility of being acquired or acquiring another company to increase their global foot print and cut costs.
More details may be announced on the earnings call later today.
Apr 29, 2015, 8:24 am
#29
Join Date: Feb 2013
Location: Miami, FL
Programs: UA 1MM, AA Plat, Marriott LT Titanium, Hyatt Glob, IHG ♢ Amb, Hilton ♢, Hertz Pres
Posts: 6,016
As for acquisition, these things take time... and I'd guess in the current market environment a PE firm will lever *Wood up and buy it (and take it private). Clean up the balance sheet for a few years and then try to spit it back out to the markets.
Apr 29, 2015, 8:58 am
#30
Join Date: Sep 2007
Location: stl
Programs: AA LT Plat/8.1mm now with 1350 miles left in my account and proud of it.. SPG LT Titanium.
Posts: 3,079
Time for Barry Sternlicht to come back as a "white knight" and take back his company.