FelCor Converting Eight Hotels to Wyndham Properties
22 Janeiro 2013 - 10:00AM
Business Wire
FelCor Lodging Trust Incorporated (NYSE: FCH) today announced
that it will re-brand, renovate and reposition eight Holiday Inn®
properties to the Wyndham® Hotels and Resorts brand effective March
1, 2013. Wyndham Hotel Group, the world's largest hotel company
with over 7,200 properties and part of Wyndham Worldwide
Corporation (NYSE: WYN), will manage the hotels under long-term
management agreements with a performance guaranty.
These core hotels are located in strategic markets for FelCor.
The properties in Boston, Houston, New Orleans, Philadelphia,
Pittsburgh, San Diego and Santa Monica will be converted to Wyndham
Hotels and Resorts properties, and The Mills House in Charleston
will become a Wyndham Grand® hotel.
This agreement includes a $100 million guaranty from Wyndham
Worldwide Corporation over the 10-year term of the agreement (which
includes a renewal option), with an annual guaranty of up to $21.5
million that ensures a minimum annual NOI for the eight hotels. It
also provides a management fee structure more consistent with
prevailing industry practices, and FelCor expects to save
approximately $50 million in management fees over the term. In
effect, this agreement protects approximately 20 percent of
FelCor’s EBITDA from future lodging cycle fluctuations, in addition
to providing a return on investment that is superior to the hotels’
historical performance.
“Today’s announcement further demonstrates our efforts to
execute our long-term value creation strategy, which includes
moving our portfolio into the upper-upscale segment. Over the past
year, we have delivered on our commitments to drive operational
improvement, sell non-core assets and strengthen our balance sheet.
This agreement is focused on repositioning our portfolio in order
to improve our portfolio quality, increase hotel operating income
and create and protect long-term value for our stockholders,” said
Richard A. Smith, President and CEO of FelCor. “We have a great
partner in Wyndham Hotel Group, a company with a strong track
record of managing upper-upscale hotels, and our long-standing
rapport with Wyndham Hotel Group’s management team provides a
strong foundation for our relationship.”
In conjunction with the renovation and repositioning of the
eight hotels, FelCor will spend approximately $34 million over the
next three years, net of $10 million in key money from Wyndham, in
comparison to the existing $27 million capital plans over the same
period.
“These prime, center-city locations are significant and
strategic additions to our Wyndham Hotels and Resorts portfolio,”
said Wyndham Hotel Group President and CEO Eric Danziger. “This is
a great opportunity for Wyndham Hotel Group to significantly
increase our presence without significant capital outlays. We are
very excited to align with FelCor and to bring the Wyndham name to
these gateway cities across the country, where we will offer guests
best-in-class service and accommodations.”
InterContinental Hotels Group and FelCor will maintain their
close business relationship going forward, as Holiday Inn will
continue to flag and manage five consolidated FelCor properties
located in San Francisco, Nashville, Toronto, Santa Barbara and
Orlando. FelCor will pay $30.7 million to terminate its management
agreements at the eight hotels.
About FelCor
FelCor, a real estate investment trust, owns 66 primarily
upper-upscale, full-service hotels that are located in major and
resort markets throughout 22 states. FelCor partners with leading
hotel companies to operate its diversified portfolio of hotels,
which are flagged under globally recognized names such as
Doubletree®, Embassy Suites®, Fairmont®, Hilton®, Marriott®,
Renaissance®, Sheraton®, Westin® and Holiday Inn®, and premier
independent hotels in New York. Additional information can be found
on the Company's Web site at www.felcor.com.
About Wyndham Hotel Group
Wyndham Hotel Group, part of the Wyndham Worldwide (NYSE:WYN)
family of companies, is the world’s largest hotel company with
nearly 7,260 hotels and approximately 618,100 rooms in 66 countries
under the hotel brands: Wyndham® Hotels and Resorts, Ramada®, Days
Inn®, Super 8®, Wingate by Wyndham®, Baymont Inn & Suites®,
Microtel Inn & Suites® by Wyndham, Hawthorn Suites by Wyndham®,
TRYP by WyndhamSM, Howard Johnson®, Travelodge® and Knights Inn®.
In addition, the company has license agreements to franchise the
Planet Hollywood Hotels, Dream® and Night® brands and provide
management services globally. Wyndham Hotel Group is based in
Parsippany, N.J. Additional information is available
at www.wyndhamworldwide.com.
With the exception of historical information, the matters
discussed in this news release include “forward-looking statements”
within the meaning of the federal securities laws that are
qualified by cautionary statements herein and in FelCor’s filings
with the Securities and Exchange Commission. We undertake no
obligation to update any forward-looking statement to conform the
statement to actual results or changes in our expectations.
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