West Des Moines hotel turning into a Sheraton
When it came time to renew their franchise agreement, the owners of the Holiday Inn University Park in West Des Moines decided it was also time for a change. After a $3 million renovation is completed in February, the hotel at 1800 50th St. will become the Sheraton West Des Moines.
“We’re always realigning to see what the best brand is for the market,” said Joe Morrissey, vice president of operations for John Q. Hammons Hotels Inc., which has owned the West Des Moines hotel since it was built more than 15 years ago. “West Des Moines has grown so much in the last five or 10 years, there’s more of a demand for high-end business travel now. Even though Holiday Inn is a great name, we decided to go with Sheraton, which is a more high-end hotel.”
Consumer Reports magazine classifies the Sheraton chain as “upscale” and puts Holiday Inn in the “moderate-priced” ranks.
To meet Sheraton standards, the Springfield, Mo.-based company is updating the hotel’s 285 rooms, the atrium lounge and meeting areas. The plan calls for new furniture, artwork, wall coverings, lighting fixtures and carpet.
Work began in mid-October, and normal hotel operations will continue during the renovation. Stephanie Tigges, director of sales, said renovations have been completed on the second, third and fourth floors. Workers have moved to the fifth and sixth floors, which are closed to guests now.
More changes are planned for 2005 after the primary renovation work is done, including self-check-in kiosks in the lobby and a concierge area on the 10th floor to provide daily complementary breakfasts and an evening manager’s reception Monday through Friday.
Hammons also owns the Embassy Suites on the River in downtown Des Moines, and owns or operates about 56 other hotels of various brands across the country.
“Des Moines has been a good market,” Morrissey said. “It hasn’t been a great market.”
The company has posted losses in recent years, including a negative net income of $7.1 million in 2003. Its financial results have strengthened in 2004, with net income of $3.4 million for the first nine months compared with $449,000 in the year-ago period.
Hammons is currently weighing an acquisition proposal from Barcelo Crestline Corp, parent company of Crestline Hotels & Resorts Inc. In October, Barcelo Crestline offered to buy Hammons for $13 per Class A share, and the company’s owner responded favorably.
John Hammons was quoted as saying, “We are pleased that this transaction will allow John Q. Hammons Hotels and Resorts to privately continue development of its hotel and resort portfolio across the United States.”
John Q. Hammons stock (JQH, listed on the American Exchange) traded recently at about $14.40.
The company formed a committee to evaluate and review the Barcelo Crestline proposal, negotiate the terms and make a recommendation to the board of directors on behalf of the shareholders. The committee retained Lehman Bros. to act as its financial adviser
If the deal goes through, the two companies would combine to manage and lease about 190 U.S. hotels under the name Barcelo Hammons Hotels and Resorts Inc.