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Venture Makes Bet on 1,004-Room Hotel In Orlando

Source:  Wall Street Journal 

A venture of two investment firms is making a contrarian bet on full-service hotels, acquiring a 1,004-room hotel in Orlando at a time when investors have been shying away from this segment of the market.

The venture of AWH Partners, of New York, and Building and Land Technology, of New Haven, paid  about $60 million for the DoubleTree by Hilton Orlando at Sea World, according to people familiar with the matter. The venture plans to spend another $30 million on renovations and adding about 30,000 square feet of meeting space.

Russ Flicker, a principal at AWH, says about two-thirds of the hotel’s business comes from leisure and other transient visitors, and about one third comes from group corporate business. “We’d like to see it the reverse,” he says.

He that Orlando is a popular convention market in part because conference attendees extend their trips as family vacations once the meetings have ended.

Full-service hotels, with hundreds of rooms, multiple restaurants and extensive meeting space, have been losing customers in recent years

DoubleTree by Hilton Orlando at Sea World

DoubleTree by Hilton Orlando at Sea World

to select-service brands. These usually smaller hotels with fewer food and beverage options have been a hit with hotel investors and guests, which have flocked to these lower-rate properties.

Mr. Flicker says the full-service model still works if you can find hotels in popular markets at cheap enough prices. AWH also recently bought other full-service properties, including a Westin in Dallas and a Marriott in Burbank, Ca.

UrbanAmerica Advisors, the investment firm that sold the DoubleTree, bought the hotel shortly before the financial crisis when it was a Sheraton, and aimed to convert it into a time share property. When this type of lodging fell out of favor during the crisis, UrbanAmerica ran it as an unbranded hotel and eventually converted it to a DoubleTree and later put it up for sale, AWH Partners says.

Mr. Flicker said the hotel would remain a DoubleTree and that the new meeting space would be completed in about 18 months.

 Click here to view the original The Wall Street Journal‎ article.