One-on-One
By Matthew Bechard
A Good Host
Demand may be down, but Ed Walter has Host Hotels &
Resorts positioned for a long stay atop the lodging industry
WW. Edward Walter, president and CEO of Host Hotels & Resorts, Inc. (NYSE: HST), called 2009 one of the most challenging years in the history of the lodging business. Both business
and leisure travel have fallen. Through the third quarter
of 2009, comparable RevPAR at the nation’s largest hotel
REIT declined more than 20 percent.
The difficult market conditions have put Walter’s
management skills to the test, and shareholders have
responded. Host shares had fallen to as
low as $3.08 per share but as of press time
were trading around $10.50 per share.
REIT magazine recently spoke with
Walter at Host’s Bethesda, Md.,
headquarters to get his take on the
lodging market heading into 2010 and
his plans for the company’s future.
business stabilized during the summer and has started to
increase in the early part of the fourth quarter. On the group
side, our bookings for the fourth quarter of 2009 and into
2010 are still running behind last year’s pace, but the gap has
been closing each month since last spring.
closE up
REI T: Both business and leisure travel
have declined significantly this year. Have
you seen any improvement recently?
REIT: What steps have you taken to mitigate some of
this decline in demand?
Walter: When you lose demand in one area, you try to find
other sources of business to replace it. One example of this
is that hotels are going after more leisure
business. Not all hotels can do this, but it
is one reason we saw transient business
stabilize over the summer.
Another type of business that we will
go after is “special corporate business,”
where larger customers earn an advantaged rate because of the volume of business they provide. In better times we tend
to encourage less of this business because
it is priced at a lower per-room rate than
paid by our premium-priced corporate
customer. But in a weaker environment,
like we are in right now, it is preferable to
other more discounted business.
AGE: 54
EDUCATION: Colgate University,
Georgetown University Law
Center
FAMILY: Wife (Carole), two
children (Will and Jenna)
HOBBIES: Golf, triathlons,
coaching softball
CURRENTLY READING: “The
Lost Symbol” by Dan Brown
FAVORITE MOVIE: “Gladiator”
FAVORITE SPORTS TEAMS:
Baltimore Orioles and
Washington Capitals
FAVORITE VACATION SPOT:
Amelia Island, Fla.
COMMUNITY/PROFESSIONAL
ACTIVI TIES: Board of directors
for NAREIT, Avalon Bay
Communities, National Kidney
Foundation and Friendship
Public Charter School
REIT: What challenges and opportunities
do you see in the lodging sector in the
year ahead?
Walter: The biggest issue for us over
the next 12 months is that we still have
some of the downturn left to fight our way
through. We are going to need to continue to be intelligent in working with our
operators to try to minimize the negative
impact of revenue decline until demand
really begins to recover.
Wesley KirK
