Marriott increases global reach with purchase of Budapest hotel

July 18, 1992|By Ellen James Martin | Ellen James Martin,Staff Writer

Marriott Corp., which has been making tentative steps toward strengthening its hotel presence on several continents, has won the right to acquire a hotel in Budapest, Hungary, for more than $50 million, the company confirmed yesterday.

"We're heavily engaged in global and international growth," said Roger Conner, a vice president with Marriott Hotels, a Marriott subsidiary.

He said the purchase of the Duna Inter-Continental Hotel from the Hungarian agency that is privatizing property in the former communist country is dependent on Marriott's obtaining financing.

Analysts who track Marriott endorsed the move. They said the company is seeking to penetrate the foreign hotel market, since the domestic market is rife with excess rooms.

"Buying a hotel in the right kind of foreign market is a positive. The U.S. market is oversaturated," said James S. Schmitt, an analyst with Westcountry Financial in Los Angeles, an institutional research firm.

"Marriott has a strong desire to grow internationally because they see that as a fertile market for growth," said Steven A. Rockwell, who follows Marriott for Alex. Brown & Sons in Baltimore.

The Budapest hotel has 349 rooms, according to a statement by the Swiss Bank Corp. and Cazenove & Co. of London, both financial advisers to the Hungarian property agency.

Typically, Marriott prefers not to hold hotel real estate, opting instead to sell its hotels to investors and take management contracts to run them. But Mr. Conner said it was unclear whether that will happen with the Budapest property.

In late 1989, Marriott opened a hotel in Warsaw, Poland. It holds a 25 percent stake in the property and operates it through a management contract.

Marriott has signed agreements for the acquisition or operation of hotels in the United Kingdom, Australia and Japan this year.

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