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Hotel Lawyer — Notable quotables from hotel industry thought leaders 2007

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31 January 2007
Hotel Lawyer on what the top names in the industry are saying now. In my recent blog entries, we have looked at how every hospitality company could be in play — from InterContinental Hotels to Marriott, Hilton and Starwood, the most interesting features of 2006, explored financing hotel projects in 2007, and talked about the explosion of international hotel investment — particularly in places like Mexico, Costa Rica, the Caribbean, China, India, and Europe.

But last week, I attended the Los Angeles hotel investment conference (ALIS) and promised to report on the pulse of the hotel industry. So here is the first followup on that promise — and the first in a series of reports on about what’s going on in the industry. This report is my collection of notable quotes I captured from hotel industry thought leaders at the ALIS Conference.

Setting the scene.

As a hotel lawyer seeing 2,500 of my closest hotel industry friends at the ALIS Conference last week, I heard some interesting things from the “thought leaders” of the industry. Some of the items making my list of notable quotes were taken from private meetings, and some from the public ALIS panels. In either event, I thought I would share some of the current insights, activities or musings from some interesting people in the hospitality industry.


Barry S. Sternlicht, Chairman & CEO, Starwood Capital Group: Because of the foreign exchange rates, the United States — the whole country — is ‘on sale.’ It’s a 30% off shopping spree for foreign investors.

Barry S. Sternlicht, Chairman & CEO, Starwood Capital Group: I did W when I was 36, and ‘1’ is for me now when I am 46.

J.W. (“Bill’) Marriott, Jr., Chairman and Chief Executive Officer, Marriott International, Inc.: Lifestyle hotels are a generational thing. I am not in that generation. We are studying it and trying to understand it. It is important and going to get more important.

Matthew J. Hart, President and Chief Operating Officer, Hilton Hotels Corporation: There is a huge opportunity and growth potential in India and China. We did not mind investing in India with a great partner, where there is a long history of English law and process. China is a little shakier but our partner there did not want our investment anyway. There is plenty of money, but the trick is to get hotels open. You need someone with integrity and the ability to get things done.

Andrew Cosslett, Chief Executive Officer, InterContinental Hotels Group PLC: At InterContinental, we have done a lot of research and we are looking to differentiate ourselves. We are investing time to understand what the guest wants.

Steven A. Rudnitsky, President and CEO, Wyndham Hotel Group: In China, Super 8 is going great with a terrific partner who is opening 50 properties and will more than double openings this year. We will have 85-90 hotels in China soon and may be the biggest or one of the biggest in China.

J. William Blackham, President & CEO Eagle Hospitality Properties: We have diversified our portfolio through acquisitions targeted in coastal and high barrier-to-entry and select resort markets. Currently about 40% of our hotel EBITDA is generated from midwest hotels — down from 70% when our REIT was formed in late 2004. We are also looking to acquire an unbranded boutique hotel in our targeted markets that would be operated by an experienced boutique hotel manager.

Joseph V. Green, President & CFO, Winston Hotels Inc.: Development is like buying wholesale.

Douglas N. Dreher CHA, President The Hotel Group: We just launched our third Opportunity Fund of $100 million and are actively pursuing acquisitions of underperforming hotels in markets with further up-side. And, we have owned and/or operated 100 hotels during our 23 years of business.

Henry G. Vickers Jr., Principal, AEW Capital Management LP: We have acquired 9 hotels since the beginning of 2006. We find the risk-adjusted returns for hotels attractive relative to what we’re typically seeing for pricing of other real estate product types.

Christof Winkelmann, Managing Director and Head of Real Estate Structured Finance, Valartis Bank: Our first focus is North America and Europe, but we also like Eastern Europe, Turkey and Russia. On a risk-adjusted basis, these are the best markets for us.

Philip Ribolow, Director, CIB/Credit Risk Management, Deutsche Banc Alex. Brown: We are now working on a new-build mega casino across from the Macau Venetian.

Daniel H. Lesser MAI CRE CHA, Senior Managing Director-Industry Leader, CB Richard Ellis: In Manhattan, a lot of projects that were going to be residential are now going to be hotels because it is a higher and better use.

Michael A. DeNicola, Chief Investment Officer & EVP, FelCor Lodging Trust Incorporated: Dispositions are almost done. We are now working on adding spas, guestrooms and meeting space to a number of our existing hotels
Stephen L. Van, President & CEO, Prism Hotels: We passed the century mark — more than 100 hotel management agreements.

Greg O’Stean, SVP Hospitality Finance, GE Capital Solutions Franchise Finance: Most of our capital is going into new development. We will start considering equity.

Abid Gilani, Managing Director, Real Estate Banking, Scotia Capital (USA), Inc.: We are focused on luxury ground-up construction in North America, the Caribbean and Mexico. The big story this year is developers looking to the Caribbean, Mexico, Bahamas, the BVI and Turks and Caicos.


Richard C. Conti, President, The Plasencia Group, Inc. (formerly President of Boykin): Sell now. Think later.

Francis J. Nardozza, Chairman & CEO, REH Capital Partners LLC: The biggest consumer trend in the luxury hotel segment is larger and better spas, and guests spending a lot more money on spa treatments.

J. William Blackham, President & CEO Eagle Hospitality Properties: Gen Xers are becoming a significant percentage of the road warriors and they have different preferences in their guest experience.


Our Perspective.
We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $50 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at or 310.201.3526.

Jim Butler is one of the top hotel lawyers in the world. GOOGLE “hotel lawyer” or “hotel mixed-use” or “condo hotel lawyer” and you will see why.

Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of 50 seasoned professionals with more than $50 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. In the last 5 years alone, Jim and his team have assisted clients with more than 90 hotel mixed-use projects, all of which have involved at least some residential, and many have also involved significant spa, restaurant, retail, office, sports, and entertainment components — frequently integrated with energizing lifestyle elements.

Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. They are a major gateway of hotel finance, facilitating the flow of capital with their legal skill, hospitality industry knowledge and ability to find the right “fit” for all parts of the capital stack. Because they are part of the very fabric of the hotel industry, they are able to help clients identify key business goals, assemble the right team, strategize the approach to optimize value and then get the deal done.

Jim is frequently quoted as an expert on hotel issues by national and industry publications such as The New York Times, The Wall Street Journal, Los Angeles Times, Forbes, BusinessWeek, and Hotel Business. A frequent author and speaker, Jim’s books, articles and many expert panel presentations cover topics reflecting his practice, including hotel and hotel-mixed use investment and development, negotiating, re-negotiating or terminating hotel management agreements, acquisition and sale of hospitality properties, hotel finance, complex joint venture and entity structure matters, workouts, as well as many operating and strategic issues.

Jim Butler is a Founding Partner of Jeffer, Mangels, Butler & Marmaro LLP and he is Chairman of the firm’s Global Hospitality Group®. If you would like to discuss any hospitality or condo hotel matters, Jim would like to hear from you. Contact him at or 310.201.3526. For his views on current industry issues, visit