Hotelier Used Barter In His Turn Around
Success
Boom-and-bust hotelier Laurence Geller has recently, through
a string of clever deals, rescued Strategic Hotels & Resorts
and its 17 trophy hotels from the brink of financial ruin.
The 63-year-old Englishman built his career clashing with
hotel giants such as Marriott International over costs for
managing his hotels and with unions.
(Geller’s
hotels include four Four Seasons, two Ritz-Carltons and a
stake in the historic Hotel Del Coronado near San Diego.)
The
company’s stock hit a low of 61-cents in 2009, and recently
traded at $5.12. Strategic’s resurgence under Geller was due
to his creative thinking, unusual restructuring, and
refinancing of their debts. As well, he recruited
deep-pocketed partners to recapitalize some of his
debt-saddled hotels.
Another deft move was to reduce his debt by buying hotels
with company stock rather than selling assets. For example,
he used stock to acquire Four Seasons hotels in Jackson Hole
(WY) and Palo Alto (CA), as well as bartering with stock to
buy out Strategic’s partner in the InterContinental Chicago.
The market value of the company’s stock is roughly $950
million after hitting a low of $54 million in 2009.
