ORLANDO—Difficult economic times often lead companies to cautiously limit development and stall expansion plans. Such is not the case for CNL Hospitality Corp., which so far this year has opened eight new hotels, including its first new-construction projects. The company plans to debut about seven additional hotels by the end of 2002, bringing its portfolio to 55 properties, more than double its size only two years ago. “We look at our business from two standpoints: our ability to access new capital and our ability to invest capital strategically in the hospitality industry. So far this year, we’re successful on both fronts,” said Charlie Muller, COO/CNL. Muller added that the weak economy hasn’t hurt the company’s business strategy in the slightest. In fact, “the current volatility on Wall Street is beneficial to us in terms of access to capital. It relates to stable returns on investments.” While 9/11 led to a downturn in travel, this decline only helped to “solidify” CNL’s business strategy, which is based heavily on diversification, he said. “When we started out [CNL], our focus was on small properties, premium limited-service brands because their entry points were small compared to premium, full-service hotels,” he noted. “But as we expand, by brand and location, we look to have more of a blend of both.” In terms of investment dollars, he said, CNL’s portfolio is “about even” with regard to its ratio of limited- and full-service properties. “We’re not a niche player,” said Muller. “We want to broaden our scope and diversify by brand, operating company, geographical location and segment assets.” In fact, while the company, thus far, has focused heavily on Marriott brands, representing more than 83% of its flags, Muller alluded to big changes on the horizon. “You can expect to see CNL soon working with corporations and franchisors we haven’t worked with in the past. We’ve talked with most of the major chain organizations already to see if they’d be a good fit for our capital investments,” he stated. He declined to comment as to which brands CNL is planning to forge new relationships. However, one new flag was recently added to the company’s $2 billion hotel portfolio— Marriott’s Renaissance brand, which marks CNL’s 13th flag. CNL currently has plans to develop a new 300-room Renaissance Hotel at Tampa’s International Plaza shopping mall. The Tampa project is indicative of CNL’s recent emphasis on new-construction projects. After opening its first new developments in May— the 350-suite Residence Inn SeaWorld International Center in Orlando and the 174-room Courtyard by Marriott in Weston, FL— CNL has expanded its development pipeline to include three new projects, aside from the Renaissance project, which are each currently underway. Among them are the 950-room JW Marriott Desert Ridge Resort & Spa in Phoenix, the 358-room Marriott Waterfront Seattle and a new 156-room Courtyard in California. The Phoenix project is being co-developed with Marriott and is scheduled to open at the end of this year. CNL and Marriott will jointly own the property, and Marriott will manage the hotel. Its new Seattle location is slated to open in the third quarter of 2003. It will be wholly owned by CNL, and again managed by Marriott. CNL’s new Courtyard by Marriott is being constructed on a recently acquired site in Foothill Ranch, CA, a section of Orange County. The property is scheduled to open in the third quarter of 2003. “Developments give you more control over your pipeline,” said Muller. With new-construction projects, he explained, “you know exactly how much capital you need… It gives you a better handle on your cash flow.” Despite the sudden growth spurt in developments, Muller was quick to note that CNL’s corporate strategy continues to be focused on hotel acquisitions. In the past six months, the company has completed six hotel acquisitions valued at $260 million, and has another $460 million of development proj
