News for the Hospitality Executive |
Blackstone
Reportedly Prepping Hilton for Flotation; Things Are Seldom
What They Seem,
Skim Milk Masquerades As Cream; Quote of the Month; First
Announcement
By Stanley Turkel, CMHS, ISHC
April 6, 2011 1. Blackstone
Reportedly
Prepping Hilton for Flotation Back in August
2007, I wrote in my
Nobody Asked Me, But… No. 32 Hotel Online
column: 1. Blackstone’s
Acquisition of Hilton- If you want my
considered opinion about the Blackstone acquisition of Hilton, just
remember
that private equity investors buy and sell companies usually with other
people’s money. They put up a tiny slice
of their own capital and multiply it with investments from pension
funds,
wealthy individuals and foreign government investments.
They shake the acquired companies up, cut
spending, reduce reserves and then resell them to smaller investors in
the
public markets. Some of these equity
firms “rip, strip and flip”. Look at the
Hilton family of brands one year from now to see which have been sold
and
discarded. Look at the roster of Hilton
executives one year from now to see whether a personnel bloodbath has
taken
place. Finally, let’s
see if
Jonathan Gray, a senior managing director at Blackstone, lives up to
his
statement, “we are committed to investing in the company and working
with
Hilton’s outstanding owners and franchisees to continue to grow and
enhance the
business.” What will happen with the overlap in the middle tier with
Hilton
Garden Inns, La Quinta and Hampton Inns? Or
in the luxury tier with the overlap of the
Waldorf=Astoria
Collection, Conrad Hotels & Resorts and the Blackstone LXR
portfolio? Almost three and a half years later, the following report appeared on the Hotels blog (3/21/2011):
NEW YORK CITY
Blackstone Group LP is reportedly organizing the financial records of
Hilton
Worldwide in a preliminary step toward floating the company on the
international markets. There is no
timetable
for the floatation, according to a report in The
Independent of London, but Blackstone is said to have accountants
poring over Hilton’s books to bring them up to international financial
reporting standards. Blackstone is
leaning toward selling Hilton Worldwide as a complete unit, according
to the
report; previously, the private equity giant was thought to be open to
unloading Hilton in pieces. “This is a long
process of preparation. The focus is
getting the timing right, so that if you wake up one morning and decide
to go
for it, you can,” an unnamed source, identified as being “close to the
two
groups,” tells the newspaper. Blackstone
acquired
Hilton in a US $26 billion deal nearly four years ago, at the top of
the
market, in a highly leveraged deal that would have been nearly
impossible in
the current financial climate. 2. Things Are Seldom What They Seem, Skim Milk Masquerades As Cream If you watched
only the commercials
of the large oil companies, you would think that they are in the “save
the
planet” business. Similarly, the large
hotel franchise companies appear to be in the fair franchising
business, but
they fail even the modest Asian American Hotel Owners 12 Points of Fair
Franchising.
3. Quote of
the Month In March 2011, I
quoted the
following: “Excellence is
not a singular act
but a habit. You are what you repeatedly do” Shaquille O’Neal A few days later,
I received the
following email from Chuck Mercurio, President/CEO, Partnering
Concepts: “Oh, were it
only
true… we have enjoyed your articles and sage wisdom over the years,
however we
felt it necessary to comment on the above-referenced quotation posted
on Hotel
Online. Unfortunately, Shaquille, in an
attempt to sound wordly, was only re-quoting Aristotle whose original
quote
was: “We are what we
repeatedly do. Excellence, then, is not
an act, but a habit.” Mercurio goes on to say, “This quote has become part of our personal credo and one we use often in our lectures at Florida International University and other management training seminars.” ([email protected]) 4.
First Announcement: My new book
“Defying the Passage of
Time: 100+ Year-Old Hotels in New York” will be published before the
end of
2011. If you would like to reserve an
autographed copy, send your email address to [email protected]. Stanley Turkel,
CMHS, ISHC recently
published his new book, Great American
Hoteliers: Pioneers of the Hotel Industry. It
contains 359 pages, 25 illustrations and 16 chapters.
It also has a foreword (by Stephen Rushmore),
preface, introduction, bibliography and index. Ed Watkins,
Editor of Lodging
Hospitality wrote, “The lodging industry typically doesn’t spend a
lot of
time considering its past. Some may find
that odd since compared to many other businesses (computers,
automobiles
aircraft), the hotel business is one of oldest if not the oldest, in
the
history of man. That changed recently
with the publication of.... Great
American Hoteliers: Pioneers of the Hotel Industry, a fascinating
and
entertaining series of profiles of 16 men who author Stanley Turkel
argues were
the builders of the modern American hotel industry.
That’s significant because due to the efforts
of these titans (and others, of course), the American style of
hotelkeeping
long surpassed the European tradition that reigned for centuries. Some of the
profiles contain cover
names (Hilton, Marriott, Johnson, Wilson) familiar to even casual
students of
hotel or U.S. history. Sadly, just one
of the pioneers covered the book (John Q. Hammons) is still alive and
active in
the industry. To me, the more
interesting tales cover hoteliers about whom I knew little before
reading his
book but now have a greater appreciation for their contributions. The most
compelling story focuses
on Kanjibhai Manchhubhai Patel who Turkel identifies as the first
Indian-American hotelier. K.M. Patel
arrived in San Francisco in 1923 and soon began operating a small
residential
hotel in the city. The rest, as they say,
is history; Today, Indian-American hoteliers dominate the industry with
their
trade association, AAHOA, recently surpassing 10,000 members. As Turkel says, this community represents a
true American success story.
|
Contact:
Stanley Turkel, MHS, ISHC |