Laurence Geller, president and CEO of Strategic Hotels and Resorts Inc. (NYSE: BEE), spoke with REIT.com during REITWeek 2011: NAREIT’s Investor Forum about loyalty in the hotel sector and the company’s decision to not focus solely on acquisitions.
Geller said loyalty in the hotel sector is key to being successful, and he intends to focus on further increasing the profitability of the company’s current assets. He pointed out that the cost of “acquiring” a new guest can run as high as 14 percent.
“Clearly, if you can keep loyalty with your guests you don’t have to seek new acquisitions and can save a lot of money,” Geller said.
He also added that while he thinks there will be increased acquisition activity in the lodging industry, Strategic Hotels has a very distinct niche and “we don’t want to waste it and overburden our balance sheet in any way by going for an asset that we don’t have a unique edge for.”
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