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HOTEL & RESORT NEWS

Hilton, Promus merge in $4 billion transaction In a transaction valued in excess of $4 billion, Beverly Hills, Calif.-based Hilton Hotel Corp. has merged with Memphis, Tenn.-based Promus Hotel Corp. According to the agreement, Hilton will acquire the shares of Promus in a cash-and-stock transaction.

According to Hilton's president and CEO Stephen Bollenbach, discussions of the merger began with a casual phone call in mid-July to Promus president and CEO Norman P. Blake Jr. "I called Norm and essentially said that I wanted to talk to him about a combination," says Bollenbach. "We met and talked about it, and the more we talked about it, the clearer it became that the economics of merging were so compelling. It was a transaction that we simply had to pursue."

As to whether Promus will remain the franchising "arm" of Hilton, Bollenbach says the combination will create an extremely strong company. "I think we have the luxury of combining two really good forces in the franchise community," Bollenbach says.

The Hilton-Promus combination will boast nearly 1,700 hotels, approximately 290,000 rooms and 85,000 employees.

Sunterra expands resorts in Steamboat Springs, Colo. Orlando, Fla.-based Sunterra Corp. has opened Phase II of Sunterra Resorts The Village at Steamboat. The resort, located in Steamboat Springs, Colo., now includes 40 additional units - for a total of 66 - at the 20-acre resort.

The new units at Sunterra Resorts The Village at Steamboat include one, two- and three-bedroom condominiums, and feature amenities such as full-service kitchens, living areas, ski storage, fireplaces and decks. The resort offers an indoor and outdoor swimming pool, hot tubs, a sauna and steam room, and racquetball courts.

Boykin acquires joint share in Chicago's Executive Plaza In a transaction valued at approximately $48 million, Cleveland-based Boykin Lodging Co. has acquired a 75% interest - through a joint venture with Boston-based AEW Partners III LP - in the Chicago Executive Plaza Hotel. The full-service, 421-room hotel will undergo a complete renovation of all guestrooms, meeting rooms, and food and beverage facilities during 2000.

The remaining 25% interest in the hotel is owned by a private investor. Debt financing in the amount of $30 million was provided by San Francisco-based Wells Fargo Bank.

MeriStar completes two renovations; re-flags properties MeriStar Hospitality Corp. of Washington, D.C., has completed the conversion and re-flagging of two hotels - the former Holiday Inn in Annapolis, Md., and the former Ramada Plaza Old Town in Virginia. Respectively renamed the Radisson Hotel Annapolis and the Radisson Hotel Old Town Alexandria, the hotels have undergone extensive renovations.

Located within the city's historic district, the newly renovated Radisson Hotel Annapolis contains a fitness center, 12,000 sq. ft. of meeting space and five suites. The Radisson Hotel Old Town Alexandria is also located in the historic district of Alexandria and is adjacent to the Potomac River.

Hilton New York launches $85 million renovation project The Hilton New York, located at 1335 Avenue of the Americas, has begun a $85 million renovation project that includes a reconfigured lobby, two new dining venues, two lounges and more than 15,000 sq. ft. of additional meeting facilities. Work is slated for completion by January 2000.

The project - dubbed by Hilton execs as the "Master Plan" - will also include the creation of 37 new guest rooms and a sky-lit spa and fitness center. A new 8,200 sq. ft. meeting facility, complete with eight meeting rooms, will be located on the Concourse Level, and 10 new meeting rooms - totaling more than 7,500 sq. ft. - will be located on the fourth floor. A videoconference facility and boardroom will also be featured.

New York-based Brennan Beer Gorman/Architects is the project designer.

USFS Named "Best Practice Champion" for Fair Franchise Agreement Atlanta-based U.S. Franchise Systems has been named a "Best Practice Champion" for its fair franchise agreement by the American Hotel Foundation (AHF) and American Express. The award comes as a result of a study conducted by Cornell University's School of Hotel Administration and funded by AHF and American Express to identify the ideas, strategies and processes that epitomize excellence in the hotel business.

The study cites USFS' franchise agreement for being more two-sided than most industry agreements and for terms that contribute to building good faith and relationships. For example, any substantial changes in standards requires approval of a two-thirds majority of franchisees, while in a traditional agreement, changes are made at the company's discretion.

In addition, in traditional agreements there is no area of protection (AOP); USFS provides franchisees with an AOP that is negotiated with each deal and is valid for the life of the agreement. USFS' agreement also provides for no unreasonable upgrade requirements and impact fees, and no hidden fees.

According to the AHF, more than 3,500 hotel strategies were analyzed before 144 "Best Practice Champions" were selected. Best practices range from guest satisfaction to marketing and cutting costs.

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