AUSTIN—Earlier this week, Strategic Hotels & Resorts Inc., owner of 18 high-end luxury resorts and hotels around the country, announced its intention to acquire the Four Seasons Austin in a $197-million deal. Marking its entrée into the Texas market, Chicago-based Strategic was drawn to Austin's growth and the ability to strengthen its geographic reach. GlobeSt.com's Anna Caplan recently spoke with Rip Gellein, Strategic's chairman and CEO, to learn more about the deal.

GlobeSt.com: What made the hotel such a desirable buy?

Rip Gellein: We are thrilled to have the opportunity to acquire the Four Seasons Austin. Simply put, this is a beautiful hotel in a desirable location in one of the nation's fastest-growing markets.  As with any acquisition we make, we prefer high-end, complex hotels with revenue streams that feed off of multiple demand drivers. In this case, Austin is both a tourist and business destination, driven by an extremely diverse economy, very strong job growth and many well-known events and local attractions. We also look to acquire assets where we can create additional value through our asset management platform. The Four Seasons Austin is a well-maintained property, having recently gone through a guest-room renovation. As we look forward, we will carefully examine additional possibilities to drive value. 

GlobeSt.com: Why is Austin your first Texas acquisition?

Gellein: We've stated for some time that expanding our geographic footprint was a strategic priority, with Austin being among the markets we've targeted for potential growth. It is one of the nation's fastest-growing markets, leading the country in growth of goods and services produced and in employment growth. The market benefits from a diverse economic base, including government (as the state capital), tourism, education, healthcare, finance, technology and others, which will serve it well through various economic cycles.  Moreover, the market's popularity as a travel destination only continues to grow thanks in part to its proximity to The University of Texas and popular annual festivals like Austin City Limits and South by Southwest.

GlobeSt.com: What types of amenity upgrades will you make, if any?

Gellein: As we mentioned, the hotel's guest rooms went through a renovation last year and the property, including the grounds, are very well maintained. Asset management is our expertise, so we naturally will be looking for additional ways in which we can further deliver Austin's most distinctive luxury hotel experience. While there are no set plans at this point, we want to create a truly memorable guest experience through every square foot of the hotel, whether that's through food and beverage concepts, guest amenities, meeting spaces, spa concepts, etc.

GlobeSt.com: How does the property compare to other assets you own/manage?

Gellein: When we close, this property will be our fifth Four Seasons hotel. We are excited to have the opportunity to continue to deepen this important relationship. Beyond the Four Seasons, we operate under some of the world's other most recognizable hotel brands, including Fairmont, Hyatt, InterContinental, KSL Resorts, Loews, Marriott, Montage Hotels & Resorts, Ritz-Carlton and Westin.

Of course the location is unique, as this is our first acquisition in Texas. While we've traditionally been weighted on the coasts, this offers us an opportunity to balance our footprint a bit more. It is also unique in the sense that while it is an urban property just steps from Austin's central business district, it has the vibe of a resort setting along the shores of the beautiful Lady Bird Lake.

GlobeSt.com: How can the hotel continue to compete in the market, given that the city is growing and changing so quickly?

Gellein: There is a significant and sustained demand for lodging in Austin. By way of example, between 2010 and 2014, room night demand increased at a compound annual growth rate of 5.3 percent, while supply only increased by 1.5 percent. While new supply is coming onto the market, we are extremely confident in our ability to leverage the property's enviable location, distinctive brand, and quality of its services and amenities.