Mr. Nassetta: Host Marriott's existence as a separate company is the result of the Marriott Corporation splitting into two companies in 1993. Marriott International was the operator and the manager that was spun off from Marriott Corporation. Marriott Corporation was renamed Host Marriott Corporation, with a business plan focused on hotel ownership. Since 1993, there have been a couple of other spin-offs from Host Marriott, including Host Marriott Services, which was our toll road, airport concession business. Most recently, when we converted to a REIT, Crestline Corporation was split out, which took our entire senior living business, and was also the lessee of all of our hotels. Today, Host Marriott is the largest owner of luxury and upper upscale full-service hotels. We are focused on the highest quality urban, airport and resort/convention locations. We have approximately 121 hotels, or just under 60,000 rooms, geographically diversified throughout the US, focused in major urban markets. Our international exposure is limited to Canada and Mexico. We're the fourth largest REIT, considering all sectors, with a total enterprise value in excess of $8 billion and EBITDA of over $1 billion. We are focused in the very upper end of the business, working with the best operators in the business, including Marriott, Ritz-Carlton, Four Seasons, Hilton, Hyatt and Swissotel. I believe we own the highest quality portfolio of upper upscale and luxury assets in the world.
TWST: What are the most significant trends, developments, changes and so
forth that you anticipate in your marketplace over the next several
years?
Mr. Nassetta: There are a few trends that I see over the next several
years. First, continuing consolidation within the business. As time goes
on, the larger brands' dominance and scope of operations is going to
increase. They have a significant advantage due to their size and
distribution network. Second, technology will have an increasing impact
on our business in a number of areas. On the revenue side, the
opportunity to have high-speed Internet access to guest and meeting
rooms will open up a world of opportunity. On the expense side, B2B
opportunities with purchasing and Internet-based reservation systems
could have a major impact on reducing costs. The last issue relates to
the fundamentals of the industry. We are approaching a peak of supply in
the upper upscale and luxury end of the business. Over the next couple
of years, supply should diminish, and assuming moderate growth in the
economy, REVPAR growth should again begin to accelerate.
Tickers included in this excerpt: HMT
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