Hotel REIT to Shell Out $225M for Renovations

ARLINGTON, VA-While the hotel market is not back to its pre-Sept. 11, 2001 salad days, things are on the upswing and MeriStar Hospitality has made a move that will position its properties to best take advantage of the impending turnaround. The hotel REIT has announced that it will spend $225 million to renovate core assets in its portfolio across the US. The sweeping renovation program will take place over the next two years and will encompass 73 of the company’s 89 hotels.

“By the end of the 2004 first quarter, we expect to have substantially completed our asset disposition program, at which time our process of upgrading our 73 core hotels will be well under way,” says MeriStar COO Bruce Wiles. “As of year-end, we had cash on hand of approximately $275 million and expect additional asset sale proceeds of $110 million to $130 million. These funds will be used to fund this renovation program, make selective acquisitions and pay down debt.” About $100 million will be spent on the renovations this year, and an additional $125 million next year. Much of the renovation process will entail guest room and corridor upgrades, but there will be some changes to public spaces as well.