Hyatt Vacation Club continues expansion at Puerto Rico resort With sales exceeding expectations, Hyatt Vacation Club has begun sales atHyatt Hacienda del Mar, a new vacation ownership project in Dorado, PuertoRico, with 82 two-bedroom units. Chicago-based Hyatt has also received keyregulatory approval for a new 60-unit vacation ownership resort at LakeTahoe, allowing construction to begin as scheduled this month.
Faison begins work on Tampa Convention Center Marriott Construction has began on Tampa's $104 million Convention Center Hotel,located on a 3.2-acre waterfront site at the Garrison Channel. Faison's Tampaoffice is leading the development team of the 717-room project. Host Marriottand Marriott International will own and operate the hotel upon completion. The hotel will include two waterfront restaurants, a sports bar, a 5,000 sq.ft. rooftop pool and 45,000 sq. ft. of meeting space.
CapStar Hotel Co. contracts to purchase Metro Hotels Bringing its hotel portfolio to 56 owned and 84 leased and/or managedproperties, Washington, D.C.-based CapStar Hotel Co. has signed a contract topurchase Dallas-based Metro Hotels, an independent hotel management company.Contracts being acquired by CapStar comprise 13 hotels with more than 2,400rooms nationwide.
Metro's Dallas office will combine with CapStar's regional Texas operations. This acquisiton will bring CapStar's total of Texas properties to 15.
U.S. Franchise, NorthStar form $100 million development fund In partnership with NorthStar Capital Investment Corp. and Lubert-Adler RealEstate Opportunity Funds L.P., Atlanta-based U.S.Franchise Systems Inc. hasformed the USFS Development Fund, which is capitalized with initial debt andequity commitments of $100 million. The fund will provide debt and equity tolocal developers building either Microtel Inns or Hawthorn Suites hotels inhigh-profile, hard-to-develop and high-barrier-to-entry markets.
NorthStar will provide $35 million of the fund's $50 million equity commitmentand will also arrange a $50 million senior credit facility. Lubert-Adler willprovide $5 million in equity commitments. USFS will make a $10 million loanto an entity controlled by NorthStar, which subsequently will make a subordinated investment in the fund.
The fund is currently reviewing five projects requesting debt and equity commitments of $22 million.
Starwood reorganizes, consolidates and relocates As part of the integration of ITT Corp. and Westin Hotels & Resorts Worldwide,Phoenix-based Starwood Hotels & Resorts Worldwide Inc. will reorganize intotwo operating groups: the Hotel Group and the Gaming Group. Each will beoperated by separate management teams. Juergen Bartels will serve as CEO ofthe Hotel Group, and Peter Boynton, CEO of Caesars World Inc., will becomechairman of Caesars and will lead the Gaming Group.
Starwood plans to relocate corporate headquarters toWestchester County,N.Y./Fairfield County, Conn., with most operating and staff functionsconsolidating to this office. Satellite offices will remain in Seattle,Boston and Atlanta.
Revenues and profits of the U.S. lodging industry could increase to recordlevels this year, according to E&Y Kenneth Leventhal's 1998 National LodgingForecast. Strong economic fundamentals such as lower unemployment, continuingjob growth and positive stock market values bode well for the U.S. lodgingmarkets, resulting in a rise of the average daily rates (ADR). Althoughoccupancy levels are expected to decline slightly to 64.3% from 1997's 64.8%,the ADR will increase 7% to $79.50 in 1998 from $75 in 1997, E&YKL predicts.
As a whole, the lodging industry will generate approximately $82 billion inrevenue for 1998, while profits will increase to $16 billion to $17 billion,up from around $14 billion last year, the forecast says.
Because of the lack of new construction in prior years, demand continues to outpace supply for full-service hotels, so this segment will remain hot throughout the late '90s, according to E&YKL.
Occupancies for limited-service is expected to decline, but demand will remain strong, says the report. Its ADR is expected to increase, and profits should remain historically high. The economy extended-stay niche is most likely to succeed.
1997's top performer was the luxury segment with an occupancy rate of 76% andan ADR of $128.50. However, few of these projects will be developed in 1998due to the limited availability of financing for such projects, the long leadtime for development and the focus of owners and operators on internationalgrowth, says E&YKL, adding that resorts will continue strong growth in revenueper room and profits.