According to the Washington, DC-based think tank Travel Industry Association of America, despite a 1.7% decline in domestic air revenue in March of this year, hotel/motel room revenue increased 10.1% from 12 months earlier. For hotel investors, that variable, added to low interest rates and booming capital markets, add up to opportunity. Strategic Hotels & Resorts, a Chicago-based REIT that owns and asset-manages 18 high-end hotels and resorts, has become a key player in the hotel investment arena. In the first quarter of 2006, Strategic closed on a 45% managing joint ownership interest in the Hotel del Coronado in San Diego; completed a public offering for $115 million; acquired the Four Seasons Washington, DC for $169.7 million; and purchased the LaSolana Hotel and Villas development sites in Nayarit, Mexico. Subsequent to the period’s end, the company acquired the Westin St. Francis in San Francisco for $440 million and priced a public offering for $143.8 million. Laurence S. Geller, CEO of Strategic, recently sat down with GlobeSt.com to discuss the industry’s most recent flurry of activity.

GlobeSt.com: We’re seeing so much activity in today’s hotel investment market, which was not the case just five years ago. How has the market changed for you?

Geller: It was pretty bleak for a number of years, but by the middle of 2003, we started seeing customers talking about meetings, airlines starting to build more capacity, and resorts charging more rates. When we started seeing those indicators, that’s when we decided to look into going public.

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