HOTELS

Derek Gale

Aloha Chicago
July 25, 2008

Yesterday I attended the opening of the new aloft Chicago O'Hare, the fifth aloft to open, and the beginning of aloft's expansion into the airport hotel market (upcoming aloft airport locations include the Philadelphia, Charleston, Portland, Washington-Dulles and Denver International Airports).



The 251-key, David Rockwell-designed property is the largest aloft so far, and includes 1250 sq. ft. (116 sq. m) of meeting space, yet only has 45 employees.



The hotel cost the developer/owner, Continental Properties, US$36 million to build, but thanks to its location near one of the busiest airports in the country, Continental expects to achieve rates of US$159 to US$199 per night for weekday stays.

And Continental isn't the only entity out there fired up about the aloft brand's potential.

Oppenheimer Equity Research, which today came out with a report on aloft parent Starwood Hotels and Resorts, notes that "aloft could add significant value" over time. 

Analyst David Katz writes that "according to our conservative estimates and based on our research of the brand, we believe aloft is worth approximately US$3 per share in value as properties open over the next several years. Our view is that demand for the product will accelerate as new locations open."

Starwood expects to open a total of 20 aloft properties this year, and 50 more next year. The longer-term goal is 500 by 2012.

While Katz is uncertain that will be achieved, he does mention that Oppenheimer sees ADR of US$150 for aloft hotels as "conservative," and that "we believe ultimately aloft will generate well in excess of that for the franchisees to earn an appropriate return."

Posted by Derek Gale on July 25, 2008 | Comments (1)