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Host Hotels & Resorts, Inc. - Interview With W. Edward Walter, CEO And President
67 WALL STREET, New York - November 23, 2009 - The Wall Street Transcript has just published its Travel and Leisure Report -- Airlines, Hotels, Resorts, Cruise Lines, and Restaurants -- offering a timely review of the sector to serious investors and industry executives. This 137 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available via The Wall Street Transcript Online.
Topics covered: Consumer Traveler Spending - U-Shaped Recovery in Restaurant Sector - Low-Cost and Network Airlines - Airline Carriers and Online Travel Agencies - Hotel Occupancy Rates - Improvement in Transportation Sector - Upscale Casual and Fast Casual Restaurants - Near-Term Risk in Hotel Space - Fuel Prices a Universal Concern - Restaurant Industry Stability - Increased Consolidation in Airline Industry - Firming of Traffic Trends in Restaurant Space- Best Practices in the QSR Franchise Sector
Companies include: Vail Resorts, Inc. (MTN); Air France-KLM (AFLYY); AirTrans (AAI); Alaska Air Group (ALK); Allegiant Travel Group (ALGT); American Airlines (AMR); Applebee's (APPB); Ashford (AHT); BJ's Restaurants (BJRI); Boeing (BA); Brinker (EAT); British Airways (BAY); Buffalo Wild Wings (BWLD); Burger King Corp (BKC); California Pizza Kitchen (CPKI); Carnival (CCL); Cheesecake Factories (CAKE); Chipotle Mexican Grill (CMG); Choice (CHH); Continental (CAL); Darden (DRI); Deltas (DAL); Denny's (DENN); DiamondRock (DRH); Domino's (DPZ); Expedia (EXPE); Famous Dave's (DAVE); FelCor (FCH); Gaylord Entertainment (GET); Great Wolf Resorts (WOLF); Green Mountain (GMCR); Hawaiian Holdings (HA); Home Inns & Hotels (HMIN); Hospitality Properties Trust (HPT); JetBlues (JBLU); LaSalle Hotel Properties (LHO); Lufthansa (LHA); MHI Hospitality Corporation (MDH); Marriott (MAR); McDonald's (MCD); Mesa (MESA); Morton's (MRT); National Business Travel Association (NBTA); National Mediation Board (NMB); Orbitz (OWW); P.F. Chang's (PFCB); Panera Bread (PNRA); Peet's (PEET); Priceline (PCLN); Republic (RJET); Royal (RCL); Royal Caribbean International (HST); Ruby Tuesday (RT); Ruth's Chris Steakhouse (RUTH); Sonesta (SNSTA); Sonic (SONC); Southwests (LUV); Spicy Pickle (SPKL.OB); Starbucks (SBUX); Starwood (HOT); Strategic (BEE); Sunstone (SHO); Texas Roadhouse (TXRH); UFood (UFFC.OB); US Air (LCC); Uniteds (UAUA); Wyndham (WYN).
In the following brief excerpt from just one of the 25 in depth interviews in the 137 page Special Report, the CEO and President of Host Hotels discusses the outlook for his company for investors.
W. Edward Walter is President and Chief Executive Officer and a Director of Host Hotels & Resorts, Inc. He joined the company in 1996 as Senior Vice President for Acquisitions, and he was elected Treasurer in 1998, Executive Vice President in 2000, Chief Operating Officer in 2001 and Chief Financial Officer in 2003. He became President and Chief Executive Officer in October 2007.
Prior to joining Host, Mr. Walter was a partner with Trammell Crow Residential Company and the President of Bailey Capital Corporation. He serves on the board of directors of AvalonBay Communities, Inc., and is a member of its Audit Committee and Investment and Finance Committee. Mr. Walter is on the board of the Friendship Public Charter School, the largest charter school system in the District of Columbia, the National Kidney Foundation, where he chairs the audit committee, and he serves on the Board of Governors of the National Association of Real Estate Investment Trusts.
TWST: Please start with a brief history of Host Hotels & Resorts.
Mr. Walter: The company was formed in 1993 when the Marriott Corporation (MAR) split into Marriott International and Host Marriott Corp. We are actually the successor company to Marriott Corporation, so we are the ones with an 82-year history. At the time of the split, most of the real estate went with our company and only a few of the employees; and most of the employees and very little of the real estate stayed with Marriott International.
Originally the idea behind the company was to grow and be a real estate owner, and generally the concept at the time of the split was for us to buy primarily Marriott-branded hotels. That changed in 1998 when we did a $1.5 billion transaction with Blackstone and bought a number of hotels that carried other companies' brands. That's the year we also converted into a real estate investment trust and really started to head down that path of lodging ownership. At the point in time that we split from Marriott, the TEV of the company was probably close to $3 billion. Today we're looking at north of $11 billion, and that's despite the fact that we have a stock price that's certainly depressed from where it was two years ago. As you think through what's happened since we converted to a REIT, we bought a number of assets and sold some.
Probably the largest transaction that we did in the last several years was a $4 billion acquisition of roughly 38 hotels from Starwood (HOT). Starwood was pursuing something similar to what Marriott had done, which is to lighten their load in real estate ownership, and really rebalance their company more towards being an operator and a manager as opposed to a real estate owner.
TWST: Tell us about your portfolio today. How many properties do you own? On which brands and geographic markets are you most focused?
Mr. Walter: Today we own 112 properties in the U.S. - just slightly more than half of those, in revenue terms, are operated by Marriott. About a quarter of them are operated by Starwood; and our other two operator relationships that are in the 8% to 10% are Hyatt (H) and Ritz Carlton. Our hotels are located in all of the major markets in the U.S. but with a primary focus on the coastal markets. We own less in the center of the country and more in the coastal markets. In addition to those properties, we are the managing general partner of a venture that owns 11 hotels in Europe. We are in England, Spain, Belgium, Italy, Poland and the Netherlands with those assets. We also have a joint venture with an Asian capital partner to pursue acquisitions in Asia. We haven't announced or completed any acquisitions in Asia yet, but the equity capitalization of the venture is $600 million.
The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. The rest of this interview and the 137 page special issue is available via The Wall Street Transcript Online .
The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.
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