Hotelier with downtown plan is a major, worldwide player Westin rated high by analysts, honored as No. 1 upscale chain

December 10, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Westin Hotels & Resorts, which announced plans last week to develop a new $160 million hotel at the Inner Harbor, is an aggressive hotelier with a reputation for quality, according to analysts and lodging industry experts.

"Westin is a four-star hotel company that hasn't been as well known on the East Coast largely because of its size," said Robert T. Koger, president of Molinaro Koger, a Fairfax, Va.-based real estate brokerage firm specializing in hotels. "But they're known for being a good manager that maintains its properties at a high degree of quality."

Westin's performance, even in the rebounding hotel industry, has been impressive, outpacing competitors and national averages.

Through October, upscale hotels posted average occupancy rates of 70.8 percent and average room rates of $85.81 per night, according to Smith Travel Research Inc., a Tennessee-based company that compiles lodging statistics.

Westin, by comparison, generated an average occupancy of 73.5 percent, with an average room rate of $123.50, according to company data.

The Seattle-based company's revenue available per room, another key gauge of a hotel's financial health, also exceeds the national average, rising 10 percent between June 1995 and June 1996 to $87.96. In all, the privately held Westin's annual revenues exceed $2.3 billion.

"Over the past 18 months, our ability to deliver a new reservation system and instill a solid marketing plan have really set us apart, I think," said Fred J. Kleisner, Westin's president and chief operating officer. "Westin has always been in a narrow band of four- and five-star quality, and we've maintained a level of consistency. That was there when we bought the company and we've tried to capitalize on it."

Kleisner declined to comment on the company's future, citing Securities and Exchange Commission regulations. Westin announced plans last month to go public in January.

Westin's improving numbers apparently haven't come at the expense of maintaining properties. Since May 1995, when Starwood Capital Group Ltd. Partnership, Goldman, Sachs & Co. and Nomura Asset Capital Corp. teamed up to purchase the chain for $537 million from a Japanese owner, the company has invested $680 million to upgrade its projects.

Those investments have earned the company numerous awards, including a rating as the No. 1 upscale hotel chain by Business Travel News, the second consecutive year Westin has received the designation.

"Theirs' is an exciting story," said Bjorn Hanson, hospitality industry chairman at Coopers & Lybrand LLC. "Westin had lost momentum, but with the Starwood and Goldman, Sachs acquisition, the company has taken off like a rocket and exceeded everyone's expectations. And part of the reason for that is they've been extremely aggressive."

In all, Westin controls 99 hotels and resorts in 26 countries.

But along with -- and perhaps contributing to -- its balance sheet increases, Westin also is known for aggressiveness in expanding its portfolio.

In addition to Baltimore, where Westin and Schulweis Realty Inc. intend to develop a 44-story, 800-room project at 300 E. Pratt St., site of the former News American newspaper, the company is constructing hotels in Malta, Indonesia, Malaysia and Texas.

Last month, Westin announced plans to raise its flag over the 18-story, 417-room Doral Beach hotel in Miami. Closer to home, in Washington, Westin operates the 262-room Grande Hotel and is buying the 400-room Vista Hotel.

Analysts attribute the 66-year-old company's aggressive moves to an effort to fulfill its plan to be represented in every major U.S. city by the year 2000.

"We did research on every four-star hotel chain," said Harvey Schulweis, president of Schulweis Realty. "And we felt that Westin was the one flag above all others that Baltimore was missing. They're totally committed to first-class projects, they have higher-than-average occupancy and room rates, and their guests spend more on average. They'll be a real credit to the city."

Pub Date: 12/10/96

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