<B> Fairmont COO Takes Helm</B>
By Maria P. Vallejo
<i>San Francisco</i> - Fairmont Hotel Management is planning a domestic and international expansion in gateway cities after the appointment of a new chief executive officer late last month.
Edward Mace, formerly the chain's COO, already has outlined a plan to expand Fairmont's seven-property portfolio by acquisition and new construction in urban areas, such as Atlanta, Los Angeles and Washington, D.C., while continuing the renovations set by former CEO Robert Small, who resigned in April.
Fairmont expects to announce new domestic acquisitions by year-end and to enter the international market by 2000, Mace said. The company has not defined the exact number of properties it eventually envisions, though. "We're fortunate because we're privately held, and we don't have the same quarterly result issues that other companies have," Mace said. "We can afford to react to the market opportunistically, bearing in mind we can wait for the right time."
The perfect target for a conversion would be a luxury hotel or property capable of repositioning into luxury hotel status, with 400 to 1,000 guest rooms, located in an urban area with center-city appeal. Fairmont will attempt to build new properties, though such opportunities are limited, because construction costs are lower than acquisition costs.
Meanwhile, the company's renovation program--to which it will be devoting close to $300 million through the year 2000--includes both physical upgrades and technology enhancements. The Dallas Fairmont, for example, by December will finish a $20 million renovation that has added 50 new suites to the property, and redecorated all 550 of its guest rooms. Oversized desks, second phone lines and a minibar have been added to each room as well. Through 1999, it also will upgrade its 70,000 square feet of meeting and function space.
On the technology side, meanwhile, Fairmont is studying, testing and pricing several different technologies designed for the business traveler, though company officials declined further comment.
Renovations include the installation of new point-of-service, labor management and upgraded property management systems. Fairmont also is investing in upgrading its central reservation system, and will install a chainwide guest history database system by year-end 1999. Guests history now is captured only at the property level, for President Club members.
"We have a substantial plan to use technology as a significant tool to enhance the guest experience," Mace said. "As we renovate the hotels, we are taking the opportunity to significantly upgrade."
No changes are planned for the management team and existing corporate relationships.