NEW YORK, June 12 -- Not usually considered among the larger participants in U.S. equity markets, U.S. hotel companies are raising record amounts of capital through public offerings of stock, according to figures from the Coopers Lybrand Lodging Research Network (www.lodgingresearch.com), the comprehensive, Internet-based resource for lodging industry data and information.
In the first quarter of 1997, hotel entities raised a total of $1.4 billion in public equity offerings, according to the Lodging Research Network. Of that total, funds raised by lodging corporations (as opposed to lodging real estate investment trusts, or REITs) accounted for approximately $940 million. That's well ahead of the pace lodging corporations set in the first quarter of 1996, when they raised just $662.2 million in the public markets, the Lodging Research Network reports. For 1996 overall, lodging corporations raised $3.4 billion, according to the Lodging Research Network.
"As these figures reveal, the lodging industry is an increasingly important sector in U.S. public markets," said Dr. Bjorn Hanson, New York- based chairman of the Coopers Lybrand L.L.P. lodging practice, creator of the Lodging Research Network (www.lodgingresearch.com). "With 10 lodging corporations and one lodging real estate investment trust (REIT) with market capitalizations in excess of $1 billion, the lodging industry has demonstrated it is a rapid growth -- and important -- sector," he added.
The three largest offerings by lodging corporations during the first quarter were the initial public offering of Vail Resorts, Inc. with gross proceeds of approximately $266 million; a secondary offering by Extended Stay America, Inc. with gross proceeds of approximately $203 million and a secondary offering by Signature Resorts, Inc. with gross proceeds of approximately $146 million, according to the Lodging Research Network.
Lodging real estate investment trusts (REITs) raised $488.5 million in public offerings in the first quarter of 1997, according to www.lodgingresearch.com. The largest offering during the period was a secondary by American General Hospitality Corporation, with gross proceeds of approximately $173.5 million. That was followed by Starwood Lodging Trust's secondary offering that generated proceeds of approximately $138 million for the REIT.
A secondary offering by FelCor Suite Hotels, Inc., which generated proceeds of approximately $107 million, was third in dollar size during the period. For 1996 overall, lodging REITs raised $1.7 billion in the public markets -- all of it in the last three quartets of the year, the Lodging Research Network reports.
Commenting on hotel REITs' growth potential, Hanson said, "Individual lodging REITs will continue to grow in market capitalization at 20 to 50 percent per year for at least the next two years. And with the consolidation now anticipated among hotel REITs, at least one such REIT will more than double in size during that time," he added.
Coopers Lybrand's Lodging Research Network (www.lodgingresearch.com) makes available via the Internet Coopers Lybrand's renowned econometric forecasts for the lodging industry, breaking lodging industry news, an exclusive database of lodging industry real estate acquisitions, financial data of publicly traded lodging companies (including SEC filings), new hotel construction data, lodging census data from Smith Travel Research as well as an extensive research library that includes U.S. economic and demographic statistics.
For more information about the Lodging Research Network, call 888-576-6656. One of the world's leading professional services firms, Coopers Lybrand L.L.P. provides services for enterprises in a wide range of industries. The firm offers its clients the expertise of more than 16,000 professionals and staff in offices located in 100 U.S. cities and, through the global network of Coopers Lybrand International, more than 74,000 people in 142 countries worldwide.
SOURCE Coopers Lybrand L.L.P.
CONTACT: Adam Brecht of Coopers Lybrand, 212-259-5996 or Adam.Brecht@us.coopers.com/