News
Cash (Yield) is King
April 8, 2010
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| It's the most important aspect of running a hotel business: Cash yield, said Hilton Chicago's Paul Grande at a panel speech to the Future Hoteliers Club and DePaul Real Estate Organization yesterday afternoon. Paul's hotel was among the portfolio bought by Blackstone for $26 billion just before the recession, so he's been trying to run the 1544-room South Michigan Ave space as efficiently as possible to help the new owner pay down their debt. New technology has helped with booking, but there's nothing like the human touch when it comes to cleaning rooms, Paul says. | |
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| Paramount Lodging Advisor's Dan Beider owns one of the larger hotel brokerage firms in the country. He says his father, an owner of economy hotels in Illinois and Wisconsin, taught him to never invest in a hotel where the cost to develop each room was more than 1,000 times ADR. Dan knew the industry was in trouble when hotels started developing at rates upwards of $600K per key. He points to prominent examples in Chicago like the unfinished Mandarin and Shangri-La. |
