Prism’s latest deals play up management forte
12 FEBRUARY 2015 7:15 AM
Prism Hotels & Resorts is focusing on its strengths in hotel and resort management with its latest deal in Tucson, Arizona, as well as other projects in the Texas oil fields.
LOS ANGELES—With a dearth of distress on the market today, Prism Hotels & Resorts has turned back to its core of management and ownership.
Case-in-point: Dallas-based Prism, which has over the last few years found work with distressed assets, recently picked up the management and an ownership interest in the 428-room Hilton Tucson El Conquistador Resort in Tucson, Arizona.
President and CEO Steve Van spoke with Hotel News Now about this deal and the company’s growing involvement in United States oil field business during the Americas Lodging Investment Summit in January.
Inside the deal
The El Conquistador deal combined what Prism does best, Van said. The formerly distressed asset was “a needle-in-the-haystack opportunity,” he said. “We don’t invest as a habit, but this was a great opportunity with a great partner—what the hotel needed was new capital.”
Prism, which has 26 hotels in its portfolio, will serve as part of the general partner ownership of the property. Along with partner Humberto Lopez, they will invest a not-yet-disclosed amount into what Van said will be “a complete, top-to-bottom renovation with new guestrooms, new meeting space and grounds.”
Van said the owners will retain the Hilton affiliation, but part of the renovation process will be repositioning the hotel under a to-be-determined theme that “enhances its natural beauty, the environment and the history of Tucson,” he said.
The property includes a golf course and country club, but those pieces were not part of the transaction; they were sold off to the local municipality, which will handle the management.
Van said the company is excited about properties it is managing in oil and natural gas markets.
“We think it’s fantastic,” he said about the hotels the company manages in the Eagle Ford shale formation area in southern Texas: the Hampton Inn Cotulla, the Hampton Inn Pleasanton and two La Quinta properties. “These are great brands, and they’ll do fine,” he said.
Other projects the company has in the works include the ongoing transformation of what’s called the Concourse Hotel at Los Angeles Airport into the Hyatt Regency Los Angeles Airport. Prism manages the Hyatt Hotels Corporation-owned hotel, located one block from Terminal 1 at Los Angeles International Airport. The hotel is expected to reopen under its new name in early 2016.
Van cited two particular projects as ones he is especially excited about: Prism manages the new-build 195-room Embassy Suites Oklahoma City that is set to open this month; and the company also manages the Hilton Baton Rouge Capitol Center, which recently completed a major renovation.
“I like these secondary markets that are often overlooked but that have a lot of promise,” Van said.
Still, Van tempered his optimism with a few worries.
“Times like this are fertile soil for hubris,” he said. “I’m worried about the inevitable over exuberance in lending, because lending is ultimately the source of all overbuilding; if you loan money to builders, they will build.”