CNL Hospitality Hunts For More Partnerships With Operating Companies

ORLANDO, FL— CNL Hospitality is on the prowl to ink more deals with operating companies in order to expand its hotel portfolio. The hotel industry investment subsidiary of CNL Financial Group Inc. is fresh off a strategic alliance with Hilton Hotels Corp. and is in the process of courting more operating companies, CNL Hospitality Chief Operating Officer Charlie Muller told HOTELBUSINESS®. “Our goal is to really work hard to penetrate the chain organizations and owner/operator organizations this year,” he said. “We would like to focus on a great group of operating companies that see the benefit of our capital. We have the ability to work with five, six or seven strong companies,” Muller said. Currently, CNL Hospitality has 55 properties in its portfolio, the majority of which are Marriott branded locations, according to Muller. It also has a few Wyndham Hotels & Resorts and Hilton properties from previous arrangements. However, CNL Hospitality is dramatically boosting the Hilton side of its business through a second venture with the hotel company in which the two organizations plan to acquire seven hotels together. Already, the partnership has resulted in the acquisition of three properties: The 500-room Doubletree Hotel at Lincoln Centre in Dallas; the 428-room Sheraton El Conquistador Resort and Country Club in Tucson, AZ; and most recently the Doubletree Hotel Crystal City, VA. This is the second formal arrangement CNL Hospitality has had with Hilton and the total capitalization of the partnership is estimated to be approximately $400 million. All of these properties will be branded as Hiltons or one of Hilton’s family of brands. The first agreement was started back in 2001 in which the company acquired four properties. CNL Hospitality has been looking ever since for an opportunity to grow that relationship with Hilton, Muller said. “As a company our focus is to be a consistent but conservative provider of capital to the lodging industry. And one of the ways we choose to do that is by working with a selective group of operating companies,” Muller said. CNL Hospitality is considering a third venture with Hilton and is looking for other operating companies as well, he said.