{"id":1004118529,"date":"2015-05-01T05:22:36","date_gmt":"2015-05-01T13:22:36","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004118529"},"modified":"2022-12-07T03:57:45","modified_gmt":"2022-12-07T11:57:45","slug":"are-big-changes-ahead-for-starwood","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/are-big-changes-ahead-for-starwood\/","title":{"rendered":"Are Big Changes Ahead for Starwood?"},"content":{"rendered":"
\"Gregory<\/a>

Gregory LaBerge, Marcus & Millichap<\/p><\/div>\n

By Keith Loria, Contributing Editor<\/em><\/p>\n

Starwood Hotels & Resorts Worldwide\u00a0Inc.’s decision to\u00a0explore strategic alternatives to maximize shareholder value was a wake-up call for the hotel sector. Announced\u00a0during its Wednesday earnings call,\u00a0the news led industry analysts to believe that all options are under consideration, including a possible sale or the potential for some sort of merger.<\/p>\n

\u201cNo option is off the table,\u201d Bruce Duncan, Starwood\u2019s chairman, said on the call.<\/p>\n

\u201cStarwood\u2019s announcement means that the firm is acknowledging that is underperforming other large-cap hotel companies, most notably Hilton and Marriott,\u201d Gregory LaBerge, Marcus & Millichap\u2019s vice president & national director for the National Hospitality Group, told Commercial Property Executive<\/i>. \u201cWhatever initiatives Starwood has undertaken to improve performance have not delivered their intended results.\u201d<\/p>\n

The Starwood announcement is also a recognition that the hotel industry\u2019s upswing is getting quite mature.<\/p>\n

\u201cThey\u2019re shrewd enough to recognize that, with equity and debt still pouring into the sector, now is the time to make a move, whether that is selling off entire brands, portfolios or disposing of individual assets,\u201d LaBerge said. \u201cHotel companies and investors may see an opportunity to create value in some of Starwood\u2019s properties, and would be willing to pay for potential upsides. That\u2019s where we are in the cycle.\u201d<\/p>\n

Starwood, which controls the St. Regis, Westin, Sheraton and W Hotels brands, unexpectedly replaced its chief executive a few months back and announced a spinoff of its time-share business. How this latest announcement affects the rest of the hotel sector is anyone\u2019s guess right now, as it will all depend on what direction these \u201cstrategic alternatives\u201d go in.<\/p>\n

\u201cCertainly, from a sale standpoint, there are plenty of investors that would be interested in their properties. But bear in mind that most of Starwood\u2019s properties are in the luxury and upscale tiers, where the pool of potential investors is relatively small and deals often require a long time to complete,\u201d LaBerge said. \u201cThere is a much larger universe of prospective buyers for upscale hotels, where Starwood has more than 160 assets under the aloft, element and Four Points by Sheraton flags.\u201d<\/p>\n

Industry vets believe a merger with another hotel company, or an acquisition by private-equity players, is certainly an option for Starwood, although a potential acquirer would have to determine how well Starwood\u2019s culture and brands would fit in. And, most important, the deal would have to be accretive.<\/p>\n

\u201cGenerally, we\u2019re at a point in the hotel industry cycle where more mergers and entity- or brand-level acquisitions could happen, given the large amount of debt and equity in the sector and all the attention the industry\u2019s superior performance has elicited,\u201d LaBerge said.<\/p>\n

The hotelier has hired Lazard to advise it on a potential sale or other strategic alternatives.<\/p>\n

\u201cOur board has always been focused on maximizing long-term shareholder value, and this is a time of enormous opportunity and change in our industry,\u201d Duncan said in a company statement. \u201cNo option is off the table, and we will take the time we need to thoroughly evaluate our opportunities and achieve the best result for our shareholders, business partners and associates.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Starwood Hotels & Resorts Worldwide Inc.’s decision to explore strategic alternatives to maximize shareholder value was a wake-up call for the hotel sector. <\/p>\n","protected":false},"author":755,"featured_media":1004118536,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21751,21742],"tags":[],"class_list":["post-1004118529","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hotel","category-latest"],"acf":[],"yoast_head":"\nAre Big Changes Ahead for Starwood? - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/are-big-changes-ahead-for-starwood\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Are Big Changes Ahead for Starwood?\" \/>\n<meta property=\"og:description\" content=\"Starwood Hotels & Resorts Worldwide Inc.'s decision to explore strategic alternatives to maximize shareholder value was a wake-up call for the hotel sector.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/are-big-changes-ahead-for-starwood\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-05-01T13:22:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-07T11:57:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2015\/05\/LaBarge1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"600\" \/>\n\t<meta property=\"og:image:height\" content=\"750\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Suzann D. 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