Asset Management. Superior results through unrivalled hospitality intelligence. Everywhere!

Transcription

1 Asset Management Superior results through unrivalled hospitality intelligence. Everywhere!

2 Table of Contents Introduction to HVS Asset Management 3 Case Studies 17 Team Leadership 37 Contact Information

3 Introduction to HVS Asset Management - 3 -

4 How We Can Serve You Overview We bring you the broadest range of complementary services; no other organization can match it! Asset Management & Advisory Investment Banking Executive Search Hotel Management Consulting & Valuation Spa Services Sales & Marketing Services Hotel Parking Consulting Interior Design Convention, Sports & Entertainment Facilities Consulting Gaming Services Shared Ownership Services Golf Services Eco Services Food & Beverage Consulting - 4 -

5 We Can Serve You Everywhere Overview HVS covers the world with 36 offices in 14 countries staffed by more than 350 professionals. Athens Atlanta Bahamas Bangkok Beijing Boston Boulder Chicago Dallas Denver Dubai Guangzhou Hong Kong Houston Jakarta Las Vegas London Los Angeles Mexico City Miami Milan Minneapolis Mumbai New Delhi New Orleans New York Newport Philadelphia São Paulo San Francisco Shanghai Singapore St. Louis Toronto Vancouver Washington, DC - 5 -

6 What We Can Do For You What we do: We serve as a bridge between ownership and management in order to maximize asset value and align the operation of a hotel with the owner s investment goals JW Marriott Indianapolis, Indiana The Clift San Francisco, California Renaissance Schaumburg, Illinois - 6 -

7 What We Can Do For You Range of Services: Asset Management: Owner Representation/Asset Oversight Operational Reviews Operator Selection/Contract Negotiation Develop and Implement Turnaround Strategies Receivership Management in Transition Strategic Advisory: Buy-Side Due Diligence Optimization of Organizational Structures, Marketing Plans Branding/Management Selection Analysis CapEx Decision Making Renovation/Development Oversight Review of Exit Options Debt Restructure/Dispute Resolution - 7 -

8 What Guides Us Our Approach: Five Guiding Principles 1) We look for every opportunity to align the interests of hotel operators with those of hotel owners. Where there are misalignments, we openly identify them and actively advocate for ownership. 2) We change the mindsets of managers through disciplined analytics and benchmarking. 3) We build collaborative relationships to make the implementation of change possible. 4) We implement best practices based on our experiences with dozens of properties and management teams. 5) We stay creative to find non-traditional valueenhancing opportunities, and solutions to existing an potential problems - 8 -

9 How We Create Value For You 1. We troubleshoot a hotel s operation to identify areas that keep a property from maximizing its potential a) CapEx needs b) Human Resources c) Guest Service d) Revenue Generation e) Cost Controls 2. We facilitate change, by working collaboratively with the hotel s operating team a) Provide strategic direction b) Support management in areas that are beyond their skillset (such as supply and demand analysis, cost-benefit evaluations, benchmarking, industry best practices) - 9 -

10 How We Create Value For You Our process is tailored to the individual needs of the property and the owner, but a typical assignment includes the following: Weekly activities: Constant communication with operating team to stay abreast of activities and follow-through with all ongoing initiatives Monthly activities: Informal meeting with hotel executive team Monitor 10 key parameters Prepare an executive summary Quarterly activities: Formal meeting with hotel executive team Emphasis on planning for next quarter Prepare a quarterly report Conference call to share best practices Annual activities: Monitor the value of the asset vs market value Review the capital structure Review strategic options and evaluate possible value enhancements

11 How We Create Value For You Constant monitoring and guidance of 10 key parameters: 1. RevPAR index performance 2. Optimal market segmentation 3. Optimal booking channel mix 4. Revenue management 5. Sales goals vs production 6. Financial performance: variance analysis and benchmarking 7. Labor efficiency 8. Guest satisfaction 9. Employee satisfaction 10. Physical needs (CapEx and preventive maintenance)

12 How We Create Value For You Realize prudent operational cost savings: We monitor labor productivity closely and match staffing needs with capabilities. We benchmark financial performance, and bring costs in line with relevant comparables. We conduct energy audits to find energy savings and promote sustainability. We review and appeal property taxes, when appropriate We review insurance costs, and work with an in-house riskmanagement expert to find savings. We renegotiate contracts with service providers

13 How We Create Value For You We systematically identify prudent opportunities for cost reductions: We often generate operational efficiencies by benchmarking performance. We have a proprietary database with over 10,000 hotel financial statements. Hence, we can benchmark your property against the most relevant comparables. SPIDER The Hospitality Repository is HVS s proprietary database

14 How We Create Value For You SPIDER s main search page:

15 How We Create Value For You We negotiate the best achievable contract terms with trusted service providers: HVS has reviewed and negotiated hundreds of management contracts, franchise agreements, purchase and sale agreements, PIP agreements, and other operating agreements. We benchmark the most current contract terms across brands, property types and portfolio sizes

16 We Have Expertise Throughout the Property Life Cycle Disposition Acquisition Refinancing Repositioning Refurbishment Planning & Development Stabilization Long-term maintenance Construction Ramp-up Pre-opening

17 Case Studies

18 Ownership Representation: Aloft Hotel Washington National Harbor Property Aloft Washington National Harbor Location National Harbor, Maryland (15 minutes South of Downtown Washington DC) Client Peterson Companies Type of Assignment Asset management Highlights of Results Improvement of guest service scores from the bottom quartile to the top quartile among all Aloft hotels within five months. This was the result of HVS overseeing the implementation of an intensive guestservice training program for all employees. Quarterly RevPAR index improved by 14% within six months of our involvement. Our active engagement with the marketing team included a process of accountability, the re-design of the vanity website, and the introduction of various marketing campaigns. Year-over-year NOI is on-track to increase by over $1 million from the start of our engagement. Our detailed expense benchmarking analysis led to numerous cost control measures that contributed significantly to this result. Property Features 190-room hotel Upscale boutique property with views of the Potomac River Select-service property with a lobby bar and 5,000 sf of meeting space

19 Ownership Representation: Thompson Hotel Portfolio Properties 60 Thompson Thompson LES Thompson Beverly Hills Location New York and Beverly Hills Client Pomeranc Hotel Group Type of Assignment Asset management Highlights of Results Overseeing financial performance contributing toward improvement in NOI margins of 1,100 bps in 2012 (or $4.4 million). Averting major operational challenges by implementing preventive maintenance initiatives. Adjusting the composition of the competitive sets to ensure appropriate benchmarking. Improving the effectiveness of the sales team by actively providing input into key hiring decisions. Developing effective marketing strategies incorporating an optimum market mix and rate positioning. Reviewing chain expenses and allocations for accuracy, appropriateness and cost-benefit relationship. Property Features 344-room hotel portfolio Upscale boutique properties in prime locations Full-service restaurants and signature bars at each location

20 Ownership Representation: Renaissance Schaumburg Property 500-Room Renaissance Hotel and 130,000- square-foot Convention Center Location Schaumburg, Illinois Client Village of Schaumburg Type of Assignment Asset management and feasibility analysis Highlights of Engagement HVS has provided oversight of the property since pre-opening. Pre-opening activities included: Monitoring construction progress leading to an on-time and onbudget opening. Overseeing sales and marketing activities leading to a quick ramp-up in market penetration. Interviewing executive team candidates. Monitoring management and line-level staffing levels. Post-opening activities include: Developing effective marketing strategies to reach an optimum market mix and rate positioning. Providing competitive market intelligence to owner and operator. Benchmarking financial results to achieve maximum operating efficiencies. Approving annual budgets, sales & marketing and CapEx plans

21 Ownership Representation: Renaissance Schaumburg Property 500-Room Renaissance Hotel and 130,000- square-foot Convention Center Location Schaumburg, Illinois Client Village of Schaumburg Type of Assignment Asset management and feasibility analysis Highlights of Results Property was named 2007 Renaissance Hotel of the Year by Marriott. General manager was named General Manager of the Year in 2008 by Marriott. Property has consistently achieved highest Renaissance customer satisfaction scores in North America. Property regularly achieves RevPAR penetration in the 155%-to- 165% range. Property Features 500-room hotel 149,000 combined square feet of meeting and convention center facilities Three F&B outlets Opened in July

22 Ownership Representation: Hyatt Regency McCormick Place Property 800-Room Hotel and 31,000-square-foot Conference Center Location Chicago, Illinois Client Metropolitan Pier and Exposition Authority Type of Assignment Asset management Highlights of Engagement and Results Collaborated with Hyatt management to develop effective marketing strategies incorporating an optimum market mix and rate positioning. Oversaw $110-million, 460-room expansion and full renovation of existing rooms. Provided competitive market intelligence. Benchmarked financial results. Worked with management to achieve maximum operating efficiencies, including improvements in labor productivity of 5% in rooms and 9% in F&B, contributing to an expansion of 190 bps in NOI margins in Approved annual budget, sales & marketing and CapEx plans. Reviewed chain expenses for appropriateness and cost-benefit balance. Property Features 800-room hotel, four F&B outlets 50,000 combined square feet of meeting facilities Opened in July

23 Lender Representation: JW Marriott Indianapolis Property 1,005 Room JW Marriott Convention Center Hotel Location Indianapolis, Indiana Client City of Indianapolis Type of Assignment Asset management, strategic advisory, and feasibility evaluation Highlights of Engagement HVS developed and oversaw a competitive selection process to identify the best developer/operator team. Chaired the hotel selection advisory committee. Selected team of REI Real Estate Services and White Lodging as the project s developer/operator. Negotiated project agreement in conjunction with client s counsel. Provided on-going representation of the client s interests throughout the development period by: Visiting the site regularly to monitor the construction progress leading to an on-time and on-budget opening. Monitoring sales and marketing staffing and pre-booking pace leading to a quick ramp-up of operations and market penetration. Meeting and communicating with the developer s internal asset management group

24 Lender Representation: JW Marriott Indianapolis Property 1,005 Room JW Marriott Convention Center Hotel Location Indianapolis, Indiana Client City of Indianapolis Type of Assignment Asset management, strategic advisory, and feasibility evaluation Highlights of Results $425-million development project broke ground in May Despite collapse of financial markets, project moved forward due to the financial strength of the developer selected; it opened February Debt provided by the client remains current. Property Features 1,005-room hotel 105,000 square feet of meeting space Three F&B outlets Opened February

25 Ownership Representation & Management: Residence Inn Palo Alto Property Residence Inn by Marriott Location Los Altos/Palo Alto, California Client Sand Hill Property Company, LLC Type of Assignment Asset management and strategic advisory Highlights of Engagement HVS provides full asset management services and hands-on oversight of property management. Actively participate in all key decisions involving sales and marketing, staffing, major expenditures, and CapEx projects. Oversaw a complete renovation while implementing a program to minimize revenue displacement and guest inconvenience. Redefined marketing roles to strengthen relationship-building with key clients, resulting in very high customer loyalty and repeat business. Regularly benchmarked financial and operating results using HVS s proprietary database to gain maximum efficiencies. Provide monthly reports for owner to monitor results

26 Ownership Representation & Management: Residence Inn Palo Alto Property Residence Inn by Marriott Location Los Altos/Palo Alto, California Client Sand Hill Property Company, LLC Type of Assignment Asset management and strategic advisory Highlights of Results Property has maintained strong NOI margins and growing RevPAR penetration throughout the economic cycle. Property has consistently achieved NOI margins of 44%-50% since HVS s involvement. NOI increased by 8% during HVS s first year of involvement, largely through effective revenue management strategies. Property regularly achieves RevPAR index in the 130%-to-140% range. Property ranks in the top 6% of customer satisfaction scores among all 578 Residence Inns in North America. Property boasts line-level employee turnover of 13%, compared with 65% for the industry. Property Features 156-suite hotel 1,500 square feet of meeting space Opened in 2001 Marriott Platinum Service Award Recipient 2009 AAA three diamonds

27 Ownership Representation & Preparation for Sale: Hilton Garden Inn Cupertino Property Hilton Garden Inn Location Cupertino, California Client Sand Hill Property Company LLC Type of Assignment Asset management and strategic advisory Highlights of Engagement and Results Provided comprehensive asset management. Generated operating profit margins in the range of 36% to 39%. Increased NOI by 27% during first year of involvement, largely through effective revenue management. Oversaw all major decisions involving sales and marketing, property staffing, major expenditures, and CapEx projects. Regularly achieved RevPAR index in the 120%-to-130% range. Oversaw a full renovation while implementing a program to minimize revenue displacement. Took a very active role during the sales process, in conjunction with the selling broker. Seller received the highest sales price per room of any Hilton Garden Inn outside Manhattan ($230,000). Property Features 165-room hotel 1,500 square feet of meeting space Opened in 1998 AAA three diamonds

28 Ownership Representation: Marriott Courtyard Property 204 Rooms Location: Washington DC Client Private Ownership Group Type of Assignment Asset Management Highlights of Results $31-million profit on sale by implementing HVS operational directives and aggressive Asset Management to control expenses and increase revenues 400 bp increase in Property GOP from 44% in 2008 to 48% in % profit percentage in Food & Beverage department in 2010 from a 9% loss in %-116% RevPAR indexes against two comp sets for the rolling 12-month periods 10% decrease in variable housekeeping and laundry payroll cost POR 23% reduction in Food Cost from 42% to 34% Property Features 204 Rooms Three-Meal Restaurant High Energy Bar

29 Ownership Representation: Carolina Inn Property 184 rooms Rooms Location: Chapel Hill, NC Client University of North Carolina Type of Assignment Asset Management; Management Company Search, Selection, Negotiation Highlights of Results Provided a Branding Analysis and determined that the Hotel should become an Independent and drop the DoubleTree/Hilton affiliation Conducted a search and selection process for a new operator $400,000 in new rooms business added in 2009 due to new internet marketing initiatives 11% decrease in food cost related to recommended menu pricing adjustments $150,000 decrease in Food & Beverage payroll $130,000 decrease in management fee expense achieved by hiring a new operator and negotiating new competitive terms. Property Features 184 Rooms 13,000 sq. ft. of meeting space Four Diamond Rooms Rating Four Star Restaurant Rating

30 Operator Selection: Hilton Oceanfront Resort Property Hilton Oceanfront Resort Location Hilton Head Island, South Carolina Client Atlantic Resort Managers Type of Assignment Operator & Franchisor Selection Highlights of Engagement and Results HVS conducted a competitive operator/brand selection process. Assisted client in process of selecting a new brand; negotiating PIP requirements, terms and financing for a desired renovation. A new management/branding agreement was negotiated with Omni Hotels, which included very favorable terms that were closely aligned with ownership s priorities. Property Features 324-room condo-hotel 15,000 square-foot convention center Four F&B outlets Opened in 1985 AAA four diamonds

31 Acquisition Due Diligence & Operator Selection: University Place Hotel Property University Place Hotel & Conference Center Location Indianapolis, Indiana (Indiana University/Purdue University Campus) Client Indiana University Type of Assignment Asset management, strategic advisory, and financial analysis Highlights of Engagement Provided buy-side advice in order for the University to acquire the hotel, which was independently owned but resided on land owned by the University. The University s objective was to control the asset in order to advance its campus efficiency and growth. To effectuate this result HVS: Evaluated the asset s operations and developed a more efficient operating business model that combined the operations of the hotel with an adjacent conference center. Determined the fair market value of the asset. Negotiated the purchase & sale agreement in conjunction with the University s legal counsel. Led the selection process to identify a new management company for the combined asset. Developed the selection criteria for use by the selection committee and made recommendations regarding the various companies that participated in the process

32 Acquisition Due Diligence & Operator Selection: University Place Hotel Property University Place Hotel & Conference Center Location Indianapolis, Indiana (Indiana University/Purdue University Campus) Client Indiana University Highlights of Results Client successfully acquired the asset. With HVS s assistance, client selected a competent manager and negotiated a favorable management agreement. Profitability of the property increased after a comprehensive renovation and integration of a revised business operating model. Type of Assignment Asset management, strategic advisory, and financial analysis Property Features 278-room hotel 45,000 square-foot convention center Three F&B outlets Opened in 1988 AAA four diamonds

33 Acquisition Due Diligence: Hotel Washington Property Hotel Washington Location Washington, D.C. Client Northview Hotel Group LLC/ Westbrook Partners Type of Assignment Asset management and due diligence assistance Highlights of Engagement Within the 30-day closing period, HVS: Conducted comprehensive due-diligence. Identified operating savings of over $100,000 a year. Developed and recommended a buy-and-hold strategy, instead of the short-term sale envisioned by the client. Transitioned all accounting and payroll functions to a stand-alone system. Supported the negotiation of collective bargaining agreement rollovers with three unions. Reviewed employee compensation, training materials, and human resource practices. Property was successfully reopened as the W Washington after a complete renovation. Property Features 317-room hotel 12,000 square feet of meeting space Four F&B outlets Opened in 1917 (completely renovated in 2009) AAA four diamonds

34 Acquisition Due Diligence: The Clift Property The Clift Location San Francisco, California Client DivcoWest Type of Assignment Strategic Advisory Highlights of Engagement and Results Provided strategic buy-side advice for the acquisition of the leasehold interest in this trophy boutique hotel: Reviewed competitive market and financial performance of hotel under multiple scenarios. Evaluated effect on branding, management, and leases under various stressed conditions. Reviewed sales and marketing plans to identify risks and opportunities. Client successfully acquired asset with no surprises, ultimately exceeding return expectations. Property Features 363 hotel rooms 2,000 square feet of meeting space Operated by Morgans Hotel Group Asia de Cuba signature restaurant Opened in 2001 (originally built in 1913)

35 Acquisition Due Diligence & Interim Management: Semiahmoo Resort Property Semiahmoo Resort Location Blaine, Washington Client Trillium Corporation Type of Assignment Asset management and financial analysis Highlights of Engagement and Results Conducted extensive due diligence. Managed the property on an interim basis post-acquisition while the management company selection process took place. Selected a new third-party manager through a competitive process. Negotiated a favorable management agreement. Supported the acquisition price through a valuation and market study. The selected manager successfully operated the resort throughout the owner s investment period. Property Features 198-room hotel 36,000 square feet of meeting space, four F&B outlets Two 18-hole championship golf courses, 300-slip marina Opened in 1987 AAA four diamonds

36 Corporate Restructure: Halekulani Corporation Client Halekulani Corporation Location Honolulu, Hawaii Tokyo, Japan Type of Assignment Strategic advisory Highlights of Engagement and Results HVS evaluated corporate and property-level operations to generate the optimal organizational structure for the corporation that holds the Halekulani and the Waikiki Parc hotels Benchmarked organizational structure against those of similar companies and established best practices. Benchmarked salaries throughout the corporation. Realized labor savings of nearly $1 million per year through reorganization. Eliminated redundancies, streamlined reporting lines, and integrated transparency and accountability. Conducted a successful search for a new COO, who has remained as COO several years after our engagement. Property Features Owner/operator of 733 upper-upscale hotel rooms 625 employees $80 million in approximate annual revenue

37 Ownership Restructure: Astor Crowne Plaza Property Astor Crowne Plaza and Alexa Hotels Location New Orleans, Louisiana Client Bourbon Hotel & Royal Boutique Hotel Operating Company Type of Assignment Asset management and strategic advisory Highlights of Engagement and Results Recommended the restructuring of the ownership entity after reviewing the investment objectives of various partners involved. Assisted in consolidating ownership through a buy-sell provision. Maximized revenue potential through active asset management. Made operational improvements after comprehensive evaluation of the existing manager. Generated efficiencies and savings through a comprehensive IT and telephone systems audit. Property Features 707-room hotel complex, encompassing two hotels 26,000 square feet of meeting space One F&B outlet Opened in 2000 AAA four diamonds

38 Team Leadership

39 Mark Lynn President, San Francisco Experience Mr. Lynn founded the asset management division of HVS in 1996 and has been involved in the hospitality industry for more than 30 years; he has participated in the development and management of more than 200 hotel assets with a value exceeding $2.5 billion. He currently serves as president of HVS's Asset Management & Strategic Advisory practice, based in San Francisco. Prior to forming the asset management division of HVS, Mr. Lynn was Vice President of Richfield Hospitality Services and was responsible for the expansion of Richfield s hotel portfolio throughout the western region of the United States. During his tenure, he identified and consummated more than 20 hotel transactions. He received the President s Award for outstanding service to the client and community in 1993, and in 1994 the San Francisco office was recognized as the top producing development office in the Richfield system. He also served as asset manager for the Flagship resort in Atlantic City, New Jersey and the asset was selected as hotel of the year under his leadership in Prior, he served as Vice President of Operations for Brilyn,Inc. in Cincinnati, Ohio, and played a pivotal role in the management and rapid expansion of this privately held hotel development and management organization. During his tenure the company expanded from 4 to 13 hotel assets and Lynn was responsible for the daily operations of all hotel assets. Prior, Lynn was senior vice president of Parkmount Hospitality Corporation based in Dallas, Texas and was responsible for the management of 15 hotel properties located throughout North America and Hawaii. Education and Affiliations Mr. Lynn holds a B.S.B.A. from Xavier University in Cincinnati, Ohio and is a member of HAMA (Hospitality Asset Managers Association)

40 Miguel Rivera Senior Vice President, New York Experience Mr. Rivera brings with him fourteen years of experience in hotel asset management, transactions, strategic advisory, financing, and valuation throughout the Americas. He is Senior Vice President of HVS's Asset Management & Advisory practice, based out of New York City. He works with clients to align their investment objectives with the operations of their hotels, maximize operational efficiencies, and develop long term strategies that maximize asset value. Mr. Rivera has worked on nearly $1 billion of hotel transactions, and valued more than $12 billion worth of real estate. He has assisted clients to finance and recapitalize luxury development projects, and to obtain cross-border financing for resorts in Mexico and the Dominican Republic. He has advised institutional clients looking to make strategic investments in the hotel real estate market. Some of his clients include: Starwood Hotels & Resorts Worldwide, Fairmont Hotels & Resorts, Colony Capital, Westmont Hospitality, LaSalle Investment Management, and Host Hotels. Prior to joining HVS, Mr. Rivera was Senior Vice President at Jones Lang LaSalle Hotels, where he led that group s Latin American operations. Before his tenure with Jones Lang LaSalle Hotels, he was an Associate Director at Standard & Poor s, where he served as the lead rating analyst for many CMBS transactions involving assets throughout the US, the Caribbean and Mexico. Previously, he was a Vice President at HVS; he formed part of the Vancouver and San Francisco HVS offices. He also initiated the firm s Mexico business in Education and Affiliations Mr. Rivera holds an M.B.A. from Yale University, a B.S. in Hotel Administration from Cornell University, and a Diploma in Urban Land Economics from the University of British Columbia

41 Contact Information

42 HVS Asset Management Contact Information Mark C. Lynn President San Francisco Miguel Rivera Senior Vice President