Sunday, February 17, 2013
There is Value in Details...
Sunday, November 27, 2011
Spain's Melia Hotels: Diversifying in the U.S.
http://rrhh.solmelia.com/en/content/index_news__4.php
They are now in Atlanta & Florida... close enough to Europe, smart enough to avoid the hotel labor unions and higher costs of New York!
Two of the key components considered by hotel investors and operators when diversifying internationally are currency risks and share price decline. By choosing southern states like Florida & Atlanta, they have positioned themselves to cost-efficient states whose culture is not far from home.
New York has to do something... Historically, Europeans would invest first in New York before other states. But obviously, investors are well aware now of the U.S. marketplace and of the threat of collective bargaining agreements that are not healthy for start-ups. The U.S. already maintains a reasonable protection of middle class wages. The trend has now become "stockholder vs stakeholder". Society has to face it, stakeholders who do not have backbone in business will never employ and grow the economy.
They are now in Atlanta & Florida... close enough to Europe, smart enough to avoid the hotel labor unions and higher costs of New York!
Two of the key components considered by hotel investors and operators when diversifying internationally are currency risks and share price decline. By choosing southern states like Florida & Atlanta, they have positioned themselves to cost-efficient states whose culture is not far from home.
New York has to do something... Historically, Europeans would invest first in New York before other states. But obviously, investors are well aware now of the U.S. marketplace and of the threat of collective bargaining agreements that are not healthy for start-ups. The U.S. already maintains a reasonable protection of middle class wages. The trend has now become "stockholder vs stakeholder". Society has to face it, stakeholders who do not have backbone in business will never employ and grow the economy.
Portfolio Diversification: Minimizing Risks
http://www.hotelsforsalenyc.com/
Think how the big guys think... One of the few things I've learned from my previous Regional Director of Finance. After all, we were the team who put the old Carlyle back into biz when the owner died in year 2000. The heirs were not interested in the business and sold their shares to Maritz Wolff & Co & Rosewood Hotels Corp. We improved operations from $30M annually in 2002 to $60M annually before I left in June 2010. And we practically flipped the property value by adding a well-known Spa, renovating rooms, corridors, facade, elevators, lobby & restaurant. It was bought by New World Development Corp. of China just this year (2011) for $570M. Not a bad deal for Maritz Wolff & Co. & Rosewood Hotels.
So what is going on in the hotel property & development biz? The answer is simple. International Diversification. When money goes out, money must come back in.
In a business sense, it was a perfect move. The USD has lost 1/3 of its value in the international market. The United States is at a trade deficit. Diversifying to the international market adds securities to money lost in our domestic stock exchange, and investors will continue to spend money to grow their business. The Carlyle did not fly to China, nor did it have to pay most taxes in China... Employment stays, although there may be conflict of interests between new laws allowing investor work-visa programs and union jobs. Nevertheless, it is good in a sense, because the union now faces the economic reality of having to increase demand for foreign investors. It is time for them to think several times now whether their rules are still mutually beneficial or already unproductive.
Think how the big guys think... One of the few things I've learned from my previous Regional Director of Finance. After all, we were the team who put the old Carlyle back into biz when the owner died in year 2000. The heirs were not interested in the business and sold their shares to Maritz Wolff & Co & Rosewood Hotels Corp. We improved operations from $30M annually in 2002 to $60M annually before I left in June 2010. And we practically flipped the property value by adding a well-known Spa, renovating rooms, corridors, facade, elevators, lobby & restaurant. It was bought by New World Development Corp. of China just this year (2011) for $570M. Not a bad deal for Maritz Wolff & Co. & Rosewood Hotels.
So what is going on in the hotel property & development biz? The answer is simple. International Diversification. When money goes out, money must come back in.
In a business sense, it was a perfect move. The USD has lost 1/3 of its value in the international market. The United States is at a trade deficit. Diversifying to the international market adds securities to money lost in our domestic stock exchange, and investors will continue to spend money to grow their business. The Carlyle did not fly to China, nor did it have to pay most taxes in China... Employment stays, although there may be conflict of interests between new laws allowing investor work-visa programs and union jobs. Nevertheless, it is good in a sense, because the union now faces the economic reality of having to increase demand for foreign investors. It is time for them to think several times now whether their rules are still mutually beneficial or already unproductive.
Talk About 5-Star Dining @ Marginal Cost... Absolutely China Grill!
www.chinagrillmgt.com
I've become a person of diverse appetite since I tried China Grill! From Asia De Cuba, Ed's Chowder House, Barbasque, CGM by the NBC in Rockefeller Center, I could not remember any food in particular but the taste made me go back for more, time and again! Oh, and did I mention how leased operations in the hotel industry can make a big difference in profit margin? http://www.youtube.com/watch?v=JLoWwyLgHdM
I've become a person of diverse appetite since I tried China Grill! From Asia De Cuba, Ed's Chowder House, Barbasque, CGM by the NBC in Rockefeller Center, I could not remember any food in particular but the taste made me go back for more, time and again! Oh, and did I mention how leased operations in the hotel industry can make a big difference in profit margin? http://www.youtube.com/watch?v=JLoWwyLgHdM
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