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IF ANY PERIOD COULD BE CONSIDERED THE WORST OF TIMES for a company, it would be the fourth quarter of 2001 for Host Marriott Corp. (NYSE: HMT). Like its competitors, the Bethesda, Md.-based company had to ride out one of the worst slumps in the hotel sector's history following Sept. 11. Even worse, the terrorist attacks destroyed the company's World Trade Center Marriott and forced the nearby Marriott Financial Center to close until Jan. 7, 2002.

Revenues dropped by about 60% at Host Marriott's hotels in the weeks immediately following the attacks, and the company adopted a variety of cost-cutting measures in response to the drastic decline in occupancies. But business picked up slowly in October through December of 2001, and the cutbacks in operations and emphasis on maintaining liquidity helped the company emerge from the downturn in good shape, with $341 million in cash on hand.

The company's stock price — which dropped from about $12 to $6.22 immediately after Sept. 11 — also has recovered its value. As of June 19, the stock price was $11.53. With 58,000 rooms, Host Marriott ranks second in NREI's first-ever Top Hotel Owners survey, behind Accor North America, which owns 111,890 rooms under its Motel 6, Red Roof Inns and Studio 6 brands.

“On 9/11, a lot happened to our industry and our company,” says company CEO Christopher Nassetta. “I think we did a really terrific job managing through what has clearly been one of the most difficult operating environments in the lodging industry's history.”

And Nassetta says there is a silver lining to the recent difficulties — the policies Host Marriott implemented have positioned the company for growth. “One of the big benefits on the cost side was not only that it helped us post 9/11, but it also helped us in a weak operating environment,” he says. “It's also going to result in greater efficiency as the business continues to recover so that we will be able to drive greater profitability.”

Staff reductions resulted in the biggest cost savings in the wake of Sept. 11. In particular, the company — working with its operators — eliminated mid-level management positions at its large convention hotels. “We got more efficient and figured out ways to operate these hotels with 10% to 20% fewer managers,” he says. The company also temporarily closed wings and floors of hotels to reduce operating costs, and implemented more modest measures such as reducing hours at restaurants and simplifying menus.

Now that the worst of the industry downturn is over, the company plans to focus on revenue-generating initiatives at its existing hotels, and pursue opportunities to acquire properties and portfolios. The company has been extremely quiet on the acquisition front since the collapse of the financial markets in 1998, Nassetta notes, because of the difficulty in making purchases that would produce the desired yields in relation to the company's cost of capital.

“We think there will be some interesting opportunities for us to acquire assets or portfolios that will add value on a per-share basis to the company,” he says. “Whatever we do, we will continue to be focused on the very high end of the business and very high-quality assets.”

There is already proof of the switch in strategy. On June 18, the company purchased the 1,139-room Boston Marriott Copley Place for $214 million. The property occupies a prime spot in Boston's Back Bay district across from the upscale Copley Place Shopping Galleries.

Nassetta believes the decrease in the rate of hotel construction nationwide matched with an improving economy will lead to significant growth in revenues over the next several years.

“When you match a reasonable rate of growth in the economy with very little new supply, the overall effect is going to be very positive for our industry,” he says. “It will allow us to get our pricing power back, as well as stabilize and improve our operations.”

Top 25 Hotel Owners

Survey rankings are based on the total number of hotel rooms owned as of Dec. 31, 2001. Companies also were asked to provide the total number of hotels in their portfolios.

  1. Accor Lodging North America
    14651 Dallas Pkwy., Suite 500 Dallas, TX 75254
    Phone: (888) 842-2942
    Fax: (972) 702-3610
    E-mail: [email protected]
    Officers: Georges LeMener, President/CEO; Armand E. Sebban, Group Exec. VP, Finance/CFO; David O'Shaughnessy, Group Exec. VP, Franchising Quality & Technical Resources
    Total Number of Rooms: 111,890
    Total Number of Hotels: 984
  2. Host Marriott Corp.
    10400 Fernwood Rd., Bethesda, MD 20817
    Phone: (301) 380-9000
    Fax: (301) 380-4336
    E-mail: [email protected]
    Web site:
    Officers: Christopher Nassetta, President/CEO; Robert E. Parsons, Exec. VP/CFO; W. Edward Walter, Exec. VP/COO
    Total Number of Rooms: 58,000
    Total Number of Hotels: 122
  3. Hilton Hotels Corp.
    9336 Civic Center Dr., Beverly Hills, CA 90210
    Phone: (310) 278-4321
    Fax: (310) 205-7655
    Web site:
    Officers: Steve Bollenbach, President/CEO; Tom Keltner, Exec. VP, Brand Performance & Development; Matt Hart, Exec. VP/CFO
    Total Number of Rooms: 53,140
    Total Number of Hotels: 130
  4. FelCor Lodging Trust Inc.
    545 E. John Carpenter Frwy., Suite 1300 Irving, TX 75062
    Phone: (972) 444-4900
    Fax: (972) 444-4949
    E-mail: [email protected]
    Web site:
    Officers: Thomas J. Corcoran Jr., President/CEO/Director; Richard J. O'Brien, Exec. VP/CFO; Lawrence D. Robinson, Exec. VP/General Counsel & Secretary
    Total Number of Rooms: 48,467
    Total Number of Hotels: 183
  5. MeriStar Hospitality Corp.
    1010 Wisconsin Ave. N.W. Washington, DC 20007
    Phone: (202) 295-1000
    Fax: (202) 295-2230
    E-mail: [email protected]
    Web site:
    Officers: Paul Whetsell, Chairman/CEO; John Emery, President/COO; Bruce Wiles, CIO
    Total Number of Rooms: 28,653
    Total Number of Hotels: 112
  6. Equity Inns Inc.
    7700 Wolf River Blvd., Germantown, TN 38138
    Phone: (901) 754-7774
    Fax: (901) 754-2374
    E-mail: [email protected]
    Web site:
    Officers: Phillip H. McNeill Sr., Chairman/CEO; Howard A. Silver, President/COO; Donald H. Dempsey, Exec. VP/CFO
    Total Number of Rooms: 12,284
    Total Number of Hotels: 96
  7. John Q. Hammons Hotels Inc.
    300 John Q. Hammons Pkwy., Suite 900 Springfield, MO 65806
    Phone: (417) 864-4300
    Fax: (417) 873-3540
    E-mail: [email protected]
    Web site:
    Officers: John Q. Hammons, Founder/Chairman/CEO; Paul Muellner, CFO; Lou Weckstein, President
    Total Number of Rooms: 11,633
    Total Number of Hotels: 47
  8. Baymont Inns & Suites
    250 E. Wisconsin Ave., Suite 1700 Milwaukee, WI 53202
    Phone: (414) 905-1000
    Fax: (414) 905-2270
    Web site:
    Officers: Stephen Marcus, Chairman/CEO; Jim Abrahamson, President/COO; Daniel Daniele, Sr. VP, Brand Management
    Total Number of Rooms: 11,000
    Total Number of Hotels: 102
  9. Sunstone Hotel Investors Inc.
    903 Calle Amanecer, Suite 100 San Clemente, CA 92673
    Phone: (949) 369-4000
    Fax: (949) 369-4210
    Web site:
    Officers: Robert Alter, CEO; Mark Mance, President/CIO
    Total Number of Rooms: 10,611
    Total Number of Hotels: 52
  10. Innkeepers USA Trust
    306 Royal Poinciana Way Palm Beach, FL 33480
    Phone: (561) 835-1800
    Fax: (561) 835-0457
    E-mail: [email protected]
    Web site:
    Officers: Jeffrey H. Fisher, President/CEO; David Bulger, CFO/Treasurer/Exec. VP; Mark A. Murray, General Counsel & Secretary
    Total Number of Rooms: 8,131
    Total Number of Hotels: 67
  11. Carlson Hospitality Worldwide
    P.O. Box 59159, Minneapolis, MN 55459
    Phone: (763) 212-5526
    Fax: (763) 212-3400
    E-mail: [email protected]
    Web site:
    Officers: Curtis C. Nelson, President/CEO; Trudy Rautio, CFO; Jay Witzel, Exec. VP
    Total Number of Rooms: 8,116
    Total Number of Hotels: 30
  12. American Property Management Corp.
    8910 University Center Ln., Suite 500 San Diego, CA 92122
    Phone: (858) 964-5500
    Fax: (858) 964-5511
    E-mail: [email protected]
    Web site:
    Officers: Michael Gallego, President/CEO; James Long, Partner; William Littlefield, VP, Corporate Affairs
    Total Number of Rooms: 7,273
    Total Number of Hotels: 32
  13. Sunburst Hospitality Corp.
    10770 Columbia Pike, Silver Spring, MD 20901
    Phone: (301) 592-3800
    Fax: (301) 592-3830
    Web site:
    Officers: James A. MacCutcheon, President/CEO; Kevin P. Hanley, Exec. VP/COO; Chuck Warczak, Sr. VP/CFO/Treasurer
    Total Number of Rooms: 7,032
    Total Number of Hotels: 52
  14. Tishman Realty Corp.
    666 Fifth Ave., New York, NY 10103
    Phone: (212) 399-3600
    Fax: (212) 708-6750
    E-mail: [email protected]
    Web site:
    Officers: John A. Vickers, Chairman/CEO; William Sales, President; Frank Beck, CFO
    Total Number of Rooms: 6,844
    Total Number of Hotels: 9
  15. Cooper/CSS Hotels
    1407 Union Ave., Suite 400, Memphis, TN 38104
    Phone: (901) 725-9631
    Fax: (901) 274-9169
    E-mail: [email protected]
    Officers: Pace Cooper, President/CEO; Hugh McFarland, VP, Operations; Dave Krueger, CFO
    Total Number of Rooms: 4,122
    Total Number of Hotels: 22
  16. Candlewood Hotel Co. Inc.
    8621 E. 21st. St. N., Suite 200 Wichita, KS 67206
    Phone: (316) 631-1300
    Fax: (316) 631-1333
    Web site:
    Officers: Jack P. DeBoer, CEO; Warren D. Fix, CFO; James E. Roos, President/COO
    Total Number of Rooms: 3,783
    Total Number of Hotels: 31
  17. Peabody Hotel Group
    5118 Park Ave., Suite 245, Memphis, TN 38117
    Phone: (901) 762-5400
    Fax: (901) 762-5464
    E-mail: [email protected]
    Web site:
    Officers: Marty Belz, President; David Shamoian, Exec. VP; Michael Craft, VP/CFO
    Total Number of Rooms: 3,400
    Total Number of Hotels: 11
  18. Capital Hotel Management LLC
    100 Cummings Ctr., Suite 244G
    Beverly, MA 01915
    Phone: (978) 522-7000
    Fax: (978) 717-9990
    Web site:
    Officers: Ken Wilson, CEO; Chad Crandell, President
    Total Number of Rooms: 3,327
    Total Number of Hotels: 6
  19. Hersha Hospitality
    510 Walnut St., Philadelphia, PA 19106
    Phone: (215) 238-1046
    Fax: (215) 238-0157
    Web site:
    Officers: Hasu P. Shah, Chairman/CEO; KD Patel, President
    Total Number of Rooms: 2,400
    Total Number of Hotels: 24
  20. InnSuites Hospitality Trust
    1615 E. Northern Ave., Suite 102 Phoenix, AZ 85020
    Phone: (602) 944-1500
    Fax: (602) 678-0281
    E-mail: [email protected]
    Web site:
    Officers: James Wirth, President; Marc E. Berg, Exec. VP; Andy Waters, CFO
    Total Number of Rooms: 1,864
    Total Number of Hotels: 11
  21. Pinnacle Hotels USA
    1775 Hancock St., Suite 185 San Diego, CA 92115
    Phone: (619) 296-9610
    Fax: (619) 296-9124
    Web site:
    Officers: Dr. Barry Lall, President/CEO; Suresh Patel, VP
    Total Number of Rooms: 1,781
    Total Number of Hotels: 20
  22. The Generation Cos. LLC
    1822 E. Hwy. 54, Suite 300, Durham, NC 27713
    Phone: (919) 361-9000
    Fax: (919) 361-9009
    Web site:
    Officers: H. Mark Daley III, President; Ron Jacobsen, VP, Operations; Greg Barrow, VP, Development
    Total Number of Rooms: 1,757
    Total Number of Hotels: 13
  23. Larry Blumberg & Assoc. Inc.
    2733 Ross Clark Cir., Dothan, AL 36301
    Phone: (334) 793-6855
    Fax: (334) 793-1707
    E-mail: [email protected]
    Officers: Larry Blumberg, Chairman/CEO; Barry Kraselsky, President/COO; Terrell Hodnett, VP, Accounting & Systems
    Total Number of Rooms: 1,580
    Total Number of Hotels: 19
  24. Pacific Valley Investors Inc.
    1050 Ralston Ave., Belmont, CA 94002
    Phone: (650) 637-8865
    Fax: (650) 637-9623
    E-mail: [email protected]
    Officers: Wayne Levenfeld, President; Gary Bruton, VP, Operations; Elisabeth Scharbaum, VP, Operations
    Total Number of Rooms: 1,405
    Total Number of Hotels: 9
  25. Trans Inns Management Inc.
    31525 W. Twelve Mile Rd. Farmington Hills, MI 48334
    Phone: (248) 489-4333
    Fax: (248) 489-4330
    E-mail: [email protected]
    Web site:
    Officers: Daniel Vosotas, President; James Oberliesen, VP, Operations; Joe Popp, VP, Finance
    Total Number of Rooms: 1,341
    Total Number of Hotels: 12

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