Front Desk

Barry Can't Stay Away From Hotels

Barry Sternlicht seems poised in a big way for a return to the industry that gave him fame and fortune in the 1990s. The founder and former chairman of Starwood Hotels is on the prowl for two high-profile hospitality assets, and he has a multi-billion-dollar war chest to get it done.

His Starwood Capital Group has bid $905 million to take Extended Stay America out of bankruptcy. If it succeeds, Sternlicht will become chairman of the extended-stay brand. And late last week, I saw a report from Las Vegas that Starwood Capital may bid to acquire Riviera Holdings, a down-on-its-luck company whose major asset is the aging 2,000-plus-room Riviera Hotel on the Las Vegas Strip. Sternlicht was quoted as saying that if successful he could end up owning the Riviera “for about $5,000 a room, which is less than the cost of the furniture.”

While it's romantic to think Sternlicht is making these moves because he yearns for a return to the lodging business, we all know it's for more basic reasons: opportunity, timing and potential profits. I'm not sure anyone can salvage the carcass of either Extended Stay America or the 55-year-old Riviera, but I wouldn't bet against Barry. My guess he'll do something dramatic, make a lot of headlines and end up with a huge profit for himself and his investors.

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