WASHINGTON - Oct. 5, 1998--MeriStar Hospitality Corporation
(NYSE: MHX), the nation's fourth largest hotel REIT, today announced that
it has completed the previously announced acquisition of South Seas Properties
Company, L.P., west Florida's largest beachfront resort owner and operator.
The properties are owned by MeriStar
Hospitality Corporation and leased and operated by MeriStar Hotels
Resorts, Inc. (NYSE:MMH), the nation's largest independent, non-branded
hotel management company.
MeriStar Hospitality plans to invest $24 million to enhance the South
Seas portfolio, comprising seven resorts and a championship golf course,
as well as the leases and management contracts for two additional resorts.
All of the properties are located on Florida's Gulf Coast and will be leased
and managed by MeriStar Hotels Resorts, Inc. (NYSE: MMH).
"This acquisition is accretive to our earnings and significantly broadens
our base in the highly fragmented resort hotel segment," said Paul W. Whetsell,
chairman and chief executive officer of MeriStar Hospitality and MeriStar
Hotels Resorts. "With more than 25 premier resorts nationwide, MeriStar
Hospitality now is one of the nation's largest independent resort owners.
We expect to achieve more than $2 million in economies of scale with this
acquisition over the next 12 months.
"The South Seas resort portfolio is located in destinations with extremely
high barriers to new competition due to development costs and regulatory
constraints," he added. "With the completion of the $24 million renovation
upgrades to the resorts, we see positive long-term upside potential."
Whetsell noted that Robert M. Taylor, South Seas chairman and CEO, will
play an active role in the REIT's Resort Division, focusing on acquisitions
and timesharing.
South Seas properties are located on Sanibel Island, Captiva Island,
Marco Island, Ft. Myers Beach and Tampa Bay, Fla. The resorts range in
size from the 330-acre, 570-unit South Seas Plantation Resort on Captiva
Island to the 30-unit Song of the Sea, a European-style bed and breakfast
inn on Sanibel Island. (See resort descriptions attached.) The resort portfolio,
which is operated by MeriStar Hotels Resorts, has more than 1,700 rooms,
many with multiple bedrooms, including 810 condominium management contracts.
All properties are located within an hour of either the Fort Myers or Tampa
Airports, both of which cater to national and international tourist embarkation
cities.
"We already have completed the integration of the two management operations,"
said David McCaslin, MeriStar Hotels Resorts' president. "South Seas
adds significant depth to our Resorts Division at both the senior and mid-management
levels in traditional resort operations as well as in condominium management
and timesharing."
"As one of the nation's largest resort management companies, we now
are well-positioned to take advantage of synergies in marketing, purchasing
and management," said Robin A. Kirk, MeriStar Hotel Resorts executive vice-president
of resorts. "We now are second only to Disney as a resort owner and operator
in Florida."
Property Descriptions
Safety Harbor Resort and Spa |
The 192-room Safety Harbor Resort and Spa is one of America's
historic spa resorts. Located on the waterfront of Old James Bay, the resort
will be leased and managed by MeriStar Hotels Resorts, with an option
to purchase the property. Safety Harbor features a comprehensive skin and
body care center, a 30,000 square foot spa, indoor and outdoor pools, tennis
court and 31,000 square feet of meeting space. Plans call for a $3.8 million
upgrade of the spa, public spaces and guestrooms. |
South Seas Plantation Resort and Yacht Harbor |
Located on Captiva Island, Fla., the destination resort consists of
570 units, 106 of which MeriStar Hospitality will own, with all of the
units to be leased and managed by MeriStar Hotels Resorts under rental
and lease agreements. Developed as a master-planned resort community in
the 1970s, the property comprises 330 acres with 5,000 feet of beach frontage.
Resort amenities and common areas owned by South Seas include 18 pools,
a nine-hole golf course, two marinas, 29,000 square feet of meeting space,
eight food and beverage facilities and eight retail stores. MeriStar Hospitality
plans to invest approximately $15 million to enhance guest rooms and condominiums,
upgrade public spaces and restaurants, add additional meeting space and
improve the resort's landscaping. |
Sundial Beach Resort |
Occupying 33 acres, including 2,300 feet of prime Gulf of Mexico beach
frontage, on Middle Gulf Drive, the Sundial Beach Resort has 407 condominium
units, 207 of which will be managed by MeriStar Hotels Resorts. The property
offers five swimming pools, 18 tennis courts, 10,000 square feet of meeting
space, two retail outlets and four food and beverage outlets. MeriStar
Hospitality will spend approximately $1.3 million to add and improve meeting
space and renovate restaurant facilities. |
Sanibel Inn |
The Sanibel Inn, owned by MeriStar Hospitality, consists of a 96-room
hotel and 30 condominiums on an adjacent eight-acre site, leased and managed
by MeriStar Hotels Resorts. With approximately 570 feet of direct
beach frontage on the Gulf of Mexico, the property provides two meeting
rooms and two restaurants. The hotel recently completed an extensive improvement
plan to upgrade room interiors, building exteriors and landscaping. |
Song of the Sea |
The 30-room European-style bed breakfast inn is world-renowned
for its intimate atmosphere and personal attention to guests. The property
is situated on 3.3 acres along approximately 200 feet of direct beachfront
overlooking the Gulf of Mexico and features a swimming pool, whirlpool,
tennis courts and laundry facilities. |
Seaside Inn |
The Seaside Inn features 31 guest rooms, including 22 hotel-style rooms,
8 one-bedroom suites, 1 two-bedroom suite and 1 three-bedroom suite. Hotel
amenities range from a heated pool and outdoor barbecue grills to shuffleboard
courts and spacious lanais. The property, which offers a laid-back, Key
West-style alternative on Sanibel Island, recently completed a $1.0 million
renovation that blended a tropical island flair and old Florida charm. |
Best Western Sanibel Island Resort |
The Best Western Sanibel Island Resort, located on 4.5 acres of beachfront
property, is one of the island's original resorts. The 45-room hotel features
a swimming pool, tennis and shuffleboard courts, a full-service restaurant
and frontage on approximately 350 feet of Gulf of Mexico beach. Recently,
the hotel completed approximately $1.0 million in renovations to upgrade
and re-flag the property to the Best Western brand. |
Dunes Golf Tennis Club |
The Dunes Golf Tennis Club, a semi-private establishment, is
the only non-hospitality property in the South Seas portfolio. The club
features an 18-hole, par 70 championship golf course designed by Mark McCumber,
seven soft-surface tennis courts, swimming pool, volleyball courts, pro
shop, full banquet facilities and a full-service restaurant. The Dunes
recently underwent a $2.8 million renovation to upgrade the golf course
to USGA standards, remodel the greenside bunkers, and add a computerized
irrigation system. The enhancements also included a new clubhouse, pro-shop
and American-style restaurant, all of which overlook the golf course. |
Radisson Suite Beach Resort |
Located south of Naples, Fla. on Marco Island on 7.6 acres of
beachfront property, the 269 all-suite property is composed of oversized
one- and two-bedroom suites. In addition to 8,500 square feet of meeting
space, the hotel also features two tennis courts, outdoor heated pool with
sundeck, the island's largest outdoor whirlpool, beach volleyball court,
state-of-the-art fitness center, supervised children's activity club and
two full-service restaurants. MeriStar Hospitality will invest approximately
$3.6 million to improve the building's guestrooms, exterior, public space,
restaurants and corridors. |
Best Western Pink Shell Beach Resort |
MeriStar Hotels Resorts will lease and manage the 209-unit (a
mix of hotel guest rooms and approximately 50 condominium units) Best Western
Pink Shell Beach Resort, a 12-acre family-oriented resort located on 1,500
feet of beachfront in Fort Myers Beach. |
Washington, D.C.-based MeriStar Hospitality Corporation owns 117 principally
upscale, full-service hotels in major market and resort locations with
29,337 rooms in 27 states, the District of Columbia and Canada. The company
owns hotels under such internationally known brands as Hilton, Sheraton,
Marriott, Westin, Radisson and Doubletree.
MeriStar Hotels Resorts leases or manages 212 hotels with 44,839
rooms in 34 states, the District of Columbia, Canada and the U.S. Virgin
Islands.
For more information about MeriStar Hospitality Corporation and MeriStar
Hotels Resorts, Inc., visit the companies' web site: www.meristar.com.
The matters in this press release include "forward looking statements"
within the meaning of the safe harbor provisions of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 and are qualified by cautionary statements contained herein and in
MeriStar Hospitality's and MeriStar Hotels Resorts' filings with
the Securities and Exchange Commission. |