A Suite Deal - Page 3 of 3

A Suite Deal

meeting/event space. Occupancy has risen from 35% to 40% to its current rate of 65%. Total hotel revenues increased 38% in 2010 and are expected to increase approximately another 30% in 2011.  UrbanAmerica partnered with Doubletree in September 2009, and in exchange for an undisclosed fee and by meeting certain requirements, gained access to Hilton’s worldwide sales team and reservation system. (Hilton owns Doubletree.) UrbanAmerica also brought in Pyramid Hotel Group, a Boston-based full-service hotel management and advisory company, to manage the property, oversee the renovation, and reposition the resort.

Andy Ingraham, president, CEO, and founder of the National Association of Black Hotel Owners, Operators & Developers, or NABHOOD, hailed the acquisition and turnaround as a milestone in black business. “It’s significant in the scope of the investment and development, one that’s large enough to take advantage of the more than $40 billion that’s spent [annually on travel] by African American groups in the country,” he says. “It shows the departure and commitment of the brand standpoint that African Americans can play at all levels of the hotel business.”

In light of this dramatic turnaround, Hilton Worldwide named UrbanAmerica Developer of the Year in August 2010. “To win, an owner should deliver a hotel on time, meet all the brand requirements, and operate in a way that provides guests a great stay and employees a great place to work,” says Rob Palleschi, global head for Doubletree Hotels. “This hotel was an exceptional development deal because of its size and complexity to become the largest Doubletree in the world, and its fast track to meet brand standards to convert and open with our brand.”

Despite the more than $120 million investment, McCoy believes UrbanAmerica will see a significant return within the next three to five years, depending on market conditions. “We’re looking to ultimately sell this at around $200 million,” he says. Until then, UrbanAmerica will continue to keep the hotel in its portfolio while seeking out the next big real estate deal.