JHM, Spree, LTD Form Alliance

CHESAPEAKE, VA ? It is a joint venture that appears to have little downside: the alliance of three hotel groups that will harness the power of the Hilton, Promus and Marriott brands with decades of management and development expertise, and financial acumen. The newly formed alliance of JHM Hotels, Sree Hospitality and LTD Management Co. into Brentwood Hotels collectively brings together more than 6,000 hotel rooms, 1,750 employees and several million dollars in asset value. Brentwood Hotels outlined its plans at a press conference at the Asian American Hotel Owners Association (AAHOA) in Atlanta last month. The three companies will continue to operate and manage their existing portfolios. Brentwood Hotels will operate and manage those properties developed under the joint venture. Rama described a phased-in master plan that over time may put all brands under one banner. The combined hotels owned, open and under development by Sree, JHM and LTD include Fairfield Inn, Springhill Suites, Courtyard, Radisson Inn, Hampton Inn, Comfort Inn, Holiday Inn, Holiday Inn Express, Residence Inn and Days Inn. Collectively, the companies have sales volume of $92 million as of December 1998. The hotels are based in the South and Southeast, including 16 hotels in Virginia, 15 in North Carolina and 14 in South Carolina. No Geographic Restrictions Under the new management structure, there are no geographic restrictions, Rama said. In other words, look for Brentwood to go west. Mississippi, with one hotel, is its farthest western outpost. The managers have yet to decide about going public (if so, possibly as a REIT), and on whether to put the Brentwood name on a hotel (right now, there are no such plans). The Brentwood name was hatched during a golf outing in Washington, D.C., two years ago. Ownership will be equally divided among the three companies, with the appointed managers to be H.P. Rama, chairman of the board and CEO of JHM Hotels; Ravi Patel, president and CEO of Sree Hospitality; and Dilip Desai, president of LTD Management. Rama started his 23-hotel company in 1973; Patel started his business in 1980 with 17 hotels; and Desai began his 10-hotel company 16 years ago. Rama said each of the managers will have an equal say in decisions. ?How are we going to manage three distinct companies? If one of us doesn?t agree, we won?t do it; we?ll walk away,? he said. Rama said he isn?t worried about disagreements, noting that the trio is ?culturally in-tune with each other? and ?synonymous? in business operations. First Project In Richmond The first Brentwood Hotels project is a 155-room Hilton Garden Inn in suburban Richmond, VA. Other projects under development include a 159-room Hilton Garden Inn at Baltimore-Washington Airport in Baltimore; and a 104-key Residence Inn in Charlotte, NC. Citing the trio?s decade-long business relationship, Rama said, they will take Brentwood Hotels ?into the next millennium and create long-lasting, profitable endeavors.? Rama, who led the press conference, said the three have the financial wherewithal to weather any economic situation. ?Even in bad times we were building new hotels, and we had successful growth from in-house cash flow even in recessionary times.? The three managers are actively involved in the hospitality industry. Rama is the chairman of the American Hotel and Motel Association (AH&MA) and is the founding chairman of the Asian American Hotel Owners Association (AAHOA). Patel was AH&MA?s Economy Council chairman in 1994-95 and AAHOA chairman in 1992. Desai serves on the Marriott Franchise Advisory Council as the chairman for the Development Committee.