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HVS Reports an Exceptional 2007 But Forecasts a “Cautious” 2008 for our Industry

Steve Rushmore, proudly announced that 2007 proved to be the most successful year in the company’s 27-year history

Steve Rushmore, President, Founder, and CEO of HVS, the leading global hospitality services and consulting firm, proudly announced that 2007 proved to be the most successful year in the company’s 27-year history. Worldwide, the firm was involved in nearly 3,800 hotel assignments, a 25% increase over 2006. Of these assignments, the most notable were the appraisals for the Blackstone Group as part of its acquisition of Hilton Hotels around the globe. The $26-billion purchase of Hilton by Blackstone required HVS involvement on a worldwide basis for consulting needs.

“As we projected at the close of 2006, we did see 2007 experience a period of high growth in the hospitality industry around the world,” reports Rushmore. “But as a consequence of the subprime and credit issues that arose in the fall of 2007, we are already seeing their impact – on business travel and on hotel development.”

“We all need to be cautious, and now, more than ever, developers really need to know the economics of their projects,” adds Rushmore. “The expertise we provide at HVS will be even more important in the event of additional credit problems or a further downturn in our industry. The successes of the last three or four years are probably not going to continue.”

As for the 2007 accomplishments, HVS is pleased to share the following information:

We Cover the World:

  • As HVS Canada enters its 15th year in business next year, the Vancouver and Toronto offices completed assignments in nine of the ten Canadian provinces and two of the three territories in the country.
  • The Singapore office of HVS experienced 50% growth in the number of assignments in 2007 over 2006. It also opened a consulting and valuation satellite office in Hong Kong in addition to the existing satellite office operating in Shanghai. The office has also had to move to larger space to accommodate the addition of staff and consultants. Asia assignments involved China, Hong Kong, Macau, Taiwan, Japan, Australia, French Polynesia, Commonwealth of the Northern Mariana Islands (CNMI), Thailand, Indonesia, Maldives, Seychelles, Malaysia, Philippines, South Korea, Vietnam, Cambodia, and Singapore.
  • HVS Mexico City, which officially opened in May 2007, appraised the Acapulco Fairmont, one of the most significant resort assets in the country. Other consulting work occurred in Central America and the Caribbean.
  • HVS New York was involved in the appraisal of existing and proposed projects for the Canyon Ranch brand.
  • HVS Boulder experienced another strong year for portfolio assignments. This office orchestrated the appraisal of the Extended Stay Hotel assets (655 hotels), which represents the largest portfolio in terms of number of assets ever completed by any HVS office. Boulder also completed the La Quinta portfolio of 350 hotels, the Tharaldson portfolio of 138 hotels, and the Equity Inns portfolio of 112 hotels.
  • HVS’s Mumbai and New Delhi offices also conducted several significant assignments, including a market study of 25 cities in India within a two-month period for an American insurance company. The India offices also negotiated five successful management contracts with a variety of renowned brands, such as Kempinski, IHG, Hyatt, Marriott, and the Taj Group. HVS was also asked to search throughout the country for a partner for one of the largest budget brands in the world. In 2007, HVS New Delhi celebrated ten years of operation, and the office has grown nearly 40% over 2006 based on the number of staff employed. The New Delhi office covers assignments in South Asia, in particular India, and its associates are among the few consultants in the world right now who are working in Pakistan.

We are the Industry Leaders in Worldwide Hospitality Investment Conferences:

  • The Asia offices of HVS (Singapore, Shanghai, Hong Kong) hosted the 3rd China Hotel Investment Summit (CHIS) at the Grand Hyatt Shanghai this past April. Nearly 600 delegates from more than 30 countries participated in 2007, as Guest of Honor Marilyn Carlson Nelson, Chairman and CEO of Carlson Companies, inaugurated the conference. The summit was followed by dynamic discussions focusing on “Investment in China’s Hospitality Real Estate.” HVS also presented several awards for excellence in Hospitality Management in the Asia-Pacific region.
  • As has been tradition, HVS New York continues as a patron of the NYU Hospitality Investment Conference where Rushmore is featured as one of the opening session speakers. HVS New York executive Vice President Dorothy Jennings is the Conference Coordinator for this event and Steve Rushmore serves on the executive planning committee.
  • HVS Boulder Managing Director Greg Hartmann moderated and participated in the panels on Condo Hotels and Green Hotels, respectively, at the September Lodging Conference in Phoenix.
  • The Hotel Investment Conference South Asia (HICSA) was officiated by HVS New Delhi, which hosted nearly 500 attendees and 9 global CEOs of major hotel brands. Plans are already underway for the April 2008 conference.

HVS Has the Expertise:

  • The Executive Search team of HVS enjoyed a year of continued growth and success. The group completed more than 250 searches worldwide for organizations in the hotel, restaurant, gaming, and retail industries. Clients in 2007 included Mandarin Oriental, Hilton, Hyatt, the Korston Group, Rezidor, Fairmont, Elysian, Margaritas Management, and Chop’t. Throughout the globe, marquee placements of executives were made in many companies, including Foxwoods, Hilton, Club Quarters, Archon Group, Hyatt, Celebrity Cruise Lines, and Thomas and King (the largest Applebee’s franchisee in the U.S.). HVS continued to expand its compensation consulting practice, taking on both startups and large national companies as clients. HVS also expanded into the retail industry with the appointment of a new managing director focusing on this sector, based out of the New York office. HVS Executive Search continued its international growth with new offices in Moscow and Mumbai. The Executive Search office in London, now in its fifth year of operation, has assisted with placements in such diverse locations as Gambia, Buenos Aires, Doha, Naples, Zagreb, Cape Town, and Stockholm.
  • HVS Marketing Communications was actively involved in a variety of projects, ranging from sales support and training, to marketing assessments and planning, to publicity and industry relations – for individual properties and for corporate brands. Work in 2007 also included sales support for a mountain resort in Pennsylvania; in-depth sales training, collateral development, and web design for an independent high-end hotel in southwest Texas; marketing research for a proposed intimate boutique hotel in Tribeca; marketing planning for an apartment hotel in New York’s Midtown East neighborhood; and industry press activities for an east coast CVB, a major U.S. hotel management company, and a West Coast-based franchise brand. Among the notable assignments undertaken by the marketing communications team – establishing standard operating procedures and brand positioning for an independent hotel and incorporating the service levels into the hotel’s marketing activity.
  • The Boulder consulting and valuation office is now actively involved in offering development consulting services as well as ski asset valuation, having appraised several of the world’s most prominent ski areas in 2007.
  • HVS’s interior design service, HVScompass, was awarded a record 33 projects in 2007, including design services for Hyatt Hotels in Buffalo, New York, and Houston, as well as for five new W aloft Hotels throughout the United States. Six new designers were added to the staff in 2007.
  • The Food and Beverage Services division was busy in 2007 testing and validating room service implementation processes for Marriott International. It also assisted in the development of a signature restaurant concept for the Hemingway Restaurant Group, reflective of the writing and adventures of Ernest Hemingway himself. In addition, this HVS service conducted food and beverage market studies and partnered with critically acclaimed chefs Kevin Taylor and Steve Mannino to provide concept development and licensing and management services to hotel companies. As for Food and Beverage Consulting and Valuation, assignments in 2007 ranged from urban projects in New York, Austin, and Greensboro to beach projects in Miami, Cabo San Lucas, and Turks & Caicos, to ski resorts in Keystone, Banff, Taos, and Steamboat Springs.
  • HVS Golf Services was involved in the consulting and appraisal of a number of high profile golf courses, clubs and resort real estate developments in 2007, These included the appraisal of all facets of the $1.25 Billion golf resort community development on Cat Island in the Bahamas, with Miami assisting on the valuation of the hotel land; consulting for the residential component of the Kapalua Mauka project in Maui; the appraisal of the Pinehurst Resort assets; club membership modeling and consulting for the proposed Aetna Springs Resort in Napa; appraisal and consulting work for the residential and membership components of the Wyndansea Golf and eco-resort development in British Columbia; and the appraisal of the Grand Del Mar Club in California.
  • In Europe, the Hotel Investment Banking division of HVS was busy in the sale of more than 20 hotels in 2007. Among them, HVS sold a portfolio of three German hotels for Blackstone, a portfolio of nine Belgian hotels for Westmont, and a French golf resort for Dolce/AEW.
    HVS/American Hospitality Management Company, in addition to continuing to grow its management clientele, completed detailed operational analysis and strategic planning assignments for the owners of the Hyatt Regency Orlando International Airport, the Carolina Inn (Chapel Hill, NC) and Peter Island Resort (Tortola, BVI). It was also retained to completely reorganize and document new procedures manuals for two hotels in Cocoa Beach, Florida. In serving as an asset manager for some clients, this division of HVS executed searches and negotiations for management companies.

About HVS:
Established in 1980, HVS experts literally “wrote the book” on how to value hotels, shared ownership products, restaurants, and more. Hotel owners, operators, lenders, banks, and management companies all turn to HVS as the respected authority on hospitality. We possess detailed knowledge and experience in the markets where we have a presence, and in the regions in between. Whatever the real estate or consulting need, HVS associates possess experience in a wide range of hospitality and operational disciplines. Our entrepreneurial mindset and company-wide philosophy allow us to think as if we were owners and operators ourselves. We know this approach best suits our clients’ needs.

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For more information, please contact: Leora Halpern Lanz at llanz@hvs.com or at 516-248-8828 x 278.