MeriStar To Buy BridgeStreet
<B>MeriStar To Buy BridgeStreet</B>
By Bruce Serlen
As an indication of the continuing vitality of the extended-stay segment, MeriStar Hotels & Resorts late last month announced that it was acquiring BridgeStreet Accommodations for $35 million. BridgeStreet maintains a portfolio of 3,700 extended-stay apartments in 26 cities in the United States, Canada and the United Kingdom.
"Like many of our competitors, we are looking to capture as much of our corporate clients' business as possible," said Paul Whetsell, chairman and CEO of MeriStar. "This acquisition gives us one more type of lodging facility at one more price point to offer these clients. The goal is to create a kind of one-stop shop for our clients, where buyers can fill all of their travel lodging needs conveniently and efficiently."
Washington, D.C.-based MeriStar already operates 235 hotels and resorts, including those under the Doral name, with more than 46,000 rooms.
Whetsell said the extended-stay segment is expected to experience continued growth. Marriott International, for example, entered the market last year with its acquisition of ExecuStay by Marriott.
Upscale extended-stay units are seen as an alternative to traditional hotel rooms targeted primarily to business travelers on long-term assignment or who are in the process of relocating. Typical length of stay is 30 to 45 days.
Whetsell also hopes to be able to move from BridgeStreet's present "flexible accommodations," defined as units in regular residential apartment buildings, to self-contained facilities. Here, all the units in the building are managed by the company for extended stay use and would carry BridgeStreet signage. Interim housing industry leader Oakwood Corporate Housing--with 20,000 units in its portfolio worldwide--already is moving into this variety of housing facility.
Both Whetsell and John Danneberg, BridgeStreet's president and CEO, spoke of the additional capital that will be available for growth as a result of the acquisition. "MeriStar's financial resources will enhance our ability to expand both domestic and international operations," Danneberg said.
Reacting to the MeriStar-BridgeStreet transaction, Oakwood president James Klein said there has been a great deal of consolidation in the industry recently, both in the United States and internationally. He added that the present deal "further enhances corporate housing's profile within the hotel sector and with the investment community.