I cover Red Lion and Interstate, which are both
owner/operators, and in Red Lion’s case, it’s also a brand company.
Marcus Corp. is another one that owns and operates. They’re getting no respect today.
MENDELL: That’s because of the real estate drag. It doesn’t mean
it’s not a good model. It’s just not good for the public markets.
LOEB: The public markets are paying a slight premium for
the brand companies that remain since there are fewer than
there used to be.
“You won’t see significant
discounts that might
otherwise occur if there
wasn’t this level of equity
waiting on the sidelines.”
BRIAN H. TRESS
ERNST & YOUNG
MENDELL: I would, too, if I were a retail investor. What you would
want is the model of a management and franchise business because
there’s stable growth. You have less volatility, and it’s easier to
underwrite and understand. You don’t have to deal with asset
appreciation. As a private investor, I would say the opposite is true.
Real estate does well in the private model.
LOEB: During the good times when money flows into hotel companies in the public markets, the brands will have much higher
multiples. And they ought to. If you look at Marriott as a pure
brand company, why should it be valued any differently than
Ralph Lauren, Coke or Pepsi? It is a global brand entity with
long-term fee revenue, and it’s trading at a low-teens multiple.
GOLDMAN: It’s an interesting point because the people at
Blackstone, when asked why they acquired Hilton, that was
exactly one of their premises—that the hotel brands haven’t been
recognized in the same way as other global, well-known, well-established names.
“The brand management
and franchise business is
actually a very good business
in a downturn because you
have operating leverage.”
STEVEN R. GOLDMAN
HILTON HOTELS CORP.
WOOD: In the last downturn, one of the tactics that
hoteliers used was to slash room rates. Is that happening this time around?
GOLDMAN: I saw a presentation by Mark Lomanno of Smith
Travel Research showing the Four Seasons was the only company early in this decade that didn’t cut rates, and they didn’t
really lose share the way one might think. They also came
back a lot faster than everyone else.
THOUSAND ISLANDS COUNTRY CLUB
Wellesley Island, New York
This extraordinary property, formerly a part of the George Boldt
estate, consists of 976± acres and 22,434± feet of frontage on the St.
Lawrence River and Lake of the Isles, two 18-hole golf courses, a 103-
slip marina, restaurant, clubhouses, 20 hotel-style rental units and all
the support systems required. Substantial development potential in
a sophisticated summer recreational area with excellent proximity
to the US/Canadian border. $14,950,000 USD
Vincent McClelland 518-576-2297
Wade B.C. Weathers, Jr. 802-651-5392
n 98 Properties
n 23 States
Senior Vice President of Investments
Phone (407) 982-4144
Fax (866) 748-7101
Vice President of Investments
Phone (407) 982-4143
Fax (866) 748-7101
Inland American Lodging Advisor, Inc.
200 South Orange Avenue, Suite 1200
Orlando, FL 32801
The Inland name and logo are registered trademarks being used under license.