Canadian Pacific Acquires The Delta Hotel Chain

<B> Canadian Pacific Acquires The Delta Hotel Chain</B>

By Carolyn Green

<I>Toronto</I> - Canadian Pacific Hotels & Resorts last month acquired Delta Hotels & Resorts, though the two will continue to operate as separate brands.

Chris Cahill, president and chief operating officer for CP and interim president for Delta, said both Toronto-based chains will maintain their independence, separate identities and marketing strategies, which include a mix of city-center business hotels, and resorts aimed primarily at meetings and leisure business.

"I think the Delta brand is well positioned, its marketing is appropriate, the customer base is the right one and good management is in place," Cahill said, adding that CP's role will be "a matter of assisting in the growth of the business."

CP paid $65.8 million to purchase Delta. Real estate interests included in the deal, signed in May, were limited to the leasehold interests in the Delta Ottawa and the Delta Vancouver Airport hotel.

Delta manages or franchises 34 properties--28 under the Delta brand and six under a variety of other brands--with about 10,000 rooms. The majority of properties are located in Canada although a handful--including the Delta Orlando--are in international locations.

Cahill said the purchase was appealing to CP because research had indicated that Delta Hotels is well respected, has a good management group and doesn't compete directly with Canadian Pacific properties in many markets.

Suggesting the purchase was spearheaded by CP's desire to grow, Cahill said the industry is going through some intense consolidation. In late 1997, CP sold 11 business hotels to the Legacy Real Estate Investment Trust, but retained a very strong ownership in Legacy.

The Delta acquisition, he said, was an opportunity to buy a non-CP branded hotel company that could expand the trust's portfolio.

"We knew we needed another brand, and this presented an opportunity to handle a non-CP branded product and at the same time provide a pipeline of potential opportunities for Legacy.