Wall Street leaves US hoteliers high and dry

Hoteliers in the USA are enjoying record profitability and are keen to expand but do not know where to find the cash to do so, said James Burba, organiser of the 16th Hotel Industry Investment Conference, held in Los Angeles this week.

The question of how to get funding - when, despite steady growth, the returns were not high enough to tempt Wall Street - was the theme of the conference held at the Westin Century Plaza Hotel and Spa.

"We are all dressed up and looking pretty but no-one wants to date us," said Burba, worldwide director of advisory services at design and architectural firm Wimberly Allison Tong & Goo.

Burba explained that, 20 years ago, insurance companies were the prime investors in hotels, followed by Japanese investors and real estate investment trusts. Investment sources had, he said, fallen off since economic crises swept Asia, Russia and Brazil in 1998, leaving the hotel sector in an "unsettling limbo".

Burba believed that the low price of hotel shares in the USA would attract potential buyers from global groups such as the UK's Bass, Accor of France and Spanish firms Sol Melia and NH Hoteles, in a reversal of the trend a few years ago, when US companies were snapping up European hotels.

by Angela Frewin angela.frewin@rbi.co.uk

Source: Caterer & Hotelkeeper magazine, 18-24 January 2001