Archive for the ‘Lodging’ Category

2008: Forecasting The Hotel Industry And Private Equity Opportunities

Wednesday, January 2nd, 2008

The Washington Post business section has two stories I’m quoted in.

One is about the business side of hotels — a year-in-review and look ahead. Here’s an excerpt.

Now revenue per available room at Marriott and Host will probably grow 5 to 7 percent, according to the companies and analysts, as a weakening economy cools spending and growth. Marriott officials stress such gains would still beat inflation. …

“You will have an abatement of the really large increases, but you are still going to have increases, so that’s good,” said Fred Malek, the co-chairman of Thayer Lodging, which owns several Marriott hotels, including one in Annapolis.

The other article is about private equity and the credit crunch:

“The days of easy money — buying something with a lot of leverage and flipping it in 18 months — are over,” said Frederick Malek, founder of Thayer Capital, a private-equity firm in the District.

There is still good money to be made in private equity through purchases at more prudent values, more conservative leverage, and building market share and profits over time. This is the old fashioned way that we have always embraced and is bases on the time proven premise that if you can improve a company’s performance, you can earn a good return.

Both articles are worth the whole read.  And here’s the photo the Post ran:

Fred Malek Thayer Washington Post

The Greening of the Hotel Industry

Monday, October 15th, 2007

Today’s Washington Post carries an article on the makeover of The Bethesda Doubletree, the hotel owned by my company, Thayer Lodging Group. Here’s an excerpt from the article:

Mood lighting is the latest fancy touch added to the Doubletree by its owners, Thayer Lodging Group, the Annapolis hotel company co-founded by longtime Washington investor Frederic V. Malek. Over the summer, Thayer installed a purification system in the hotel’s meeting rooms to help keep air fresher and cleaner with an eye toward drawing more business customers.

The Post piece discusses our focus on providing a healthier and relaxing alternative to typical hotels. That it is, but there’s more. Our goal is to become the leader in the “greening” of the hotel industry. Surprising for this conservative Republican? Yes. Did Al Gore get to me? Sure – it proves even Democrats can get it right sometimes, and in my view Mr. Gore earned his Nobel for drawing attention not only to global warming, but to the environment overall.Perhaps the most important part of our efforts at Thayer Lodging is the impact not only the environment but also health. Not only are we providing healthy menu alternatives but we’re also purifying the air in meeting rooms and guest rooms. Typical hotels re-circulate the air throughout the day leading to a depletion of oxygen. Ever get sleepy in the afternoons? Wonder why? Maybe it’s more than the big lunch. Maybe it has something to do with the air you breathe. We are convinced that we can differentiate our product and improve preference for our hotels through these measures. Green means more than improving the environment – it can also create more green on the bottom line.

 

hi hi hi hi hi hi hi hi hi hi hi hi hi

Diving Into The Blogosphere: Hotels And Technology

Thursday, July 26th, 2007

Welcome to my new blog. I’ll be making regular postings to share my thoughts on a wide variety of issues – from politics to business to baseball, and lots more in between. You can see some of my experiences in these areas in my bio. I’ll be drawing on some of the lessons learned over the years. Please stop by whenever you can.

I wanted to kickoff this blog by talking about something that’s near and dear to my heart: Some big news coming out about the hotel industry.

I have been in the hotel business for 30 years (eight of these as President of Marriott Hotels and Resorts) and in the world of electronic media for the past five years. My experiences during this time have impressed upon me the power of the nexus of hotels and technology. My role as a founding shareholder and Advisory Board member of TIG Global (a leading independent electronic booking source for hotels) has furthered my interests and motivated me to learn more, and even to occasionally share some of my observations on selected developments in business and perhaps politics. In short, it’s time for even me to join the market place of the 21st Century.

My first such observation concerns the Blackstone acquisition of Hilton – a blockbuster of a deal by any standards. When consummated, this acquisition will be a terrific result for Hilton shareholders, and Hilton will be the brightest star in Blackstone’s lodging galaxy.

However, do not expect other hotel companies to follow suit and be acquired. This is particularly true of Marriott. Hilton is a unique blend of hotel assets and a management company with great value coming from both components. Most hotel companies follow a different model. Marriott, for example, is largely a management company with minimal ownership of hotel assets. In fact the sort of selling of hotel assets and conversion to almost a pure management company began when I was President in the mid 1980s. This trend followed with many other hotel companies separating out its hotel assets, aided by the rapid growth of hotel REITS which have taken ownership of these assets.

Thus, in the case of Marriott, you have the world’s largest hotel management company with leading brands from Ritz Carlton at the top to motels like Fairfield Inns. Further, you have an ingrained culture that started 60 years ago that celebrates and values employees, develops managers, and has led to an outstanding level of consistency of hospitality service in all brands. It is this dedication to employees and service that has fueled Marriott’s growth and led to the consumer preference enjoyed by its brands. Many other hotel management companies have their own particular culture and philosophy. In my view, it would be difficult if not impossible to hold this type of culture together if a company were to be sold to a non-lodging firm.

Thus, for now applaud the Blackstone acquisition of Hilton for its brilliance and enhancement of shareholder value. But don’t expect more of the same.

But you can expect to hear more from me here. Interested in your thoughts.

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