NEW YORK— Finally, new leadership and ownership are working in harmony to shed the negativity that has surrounded Le Méridien for so long, allowing the company to get back to business as usual. In an interview with HOTEL BUSINESS®, newly named Le Méridien CEO Robert Riley, not only touted the brand’s accomplishments in 2003, including the strides made toward improving its balance sheet, but also underscored his excitement in working with Lehman Brothers as the one entity holding the chain’s interests, which will enable the brand to move forward more easily. “We’re happy to have Lehman holding our debt. We now benefit from one creative lender/investor that we’ve got to deal with,” said Riley, who has quite a bit of hotel industry experience including serving as CEO of Hong Kong-based Mandarin Oriental Hotel Group for 10 years. The new chief said his primary focus would be on Le Méridien hotel operations and the recapitalization of the company. “In leading this company, I will help lead our hotel operators and enable them to do what they need to do. I hope to allow them to take advantage of any market upturn to improve their business,” Riley said. In addition, the executive said he plans to do a bit of image control as it relates to the negative press the chain had received on its financial woes over the last few years. As such, he said he would be traveling to touch base with the development community to spread the word that Le Méridien is ready to build new relationships and get started on new developments— particularly in the United States where the brand desperately needs to expand its presence. “We’re realistic. Of course we realize having the financial pages write about our financial problems has had an impact [on our image]. But we have taken big strides in improving our balance sheet and it is my duty to let people know that we are moving on, and to grow the company forward from this point,” he said. This year, the company expects it will finally complete its recapitalization, thanks to Lehman Brothers, which along with Starwood Hotels & Resorts worked out a deal to acquire the roughly $1.3 billion in senior debt for the troubled U.K.-based Le Méridien chain held by a 15 bank consortium just prior to year’s end 2003. Starwood’s role in the deal is still being decided, according to Riley. “It is still too early to say how the added value would be created exactly. Starwood is doing their due diligence,” he said. As far as Le Méridien’s hotel ownership goes, some very faithful owners have helped the chain maintain its distribution throughout the myriad of troubles and changes. For example, The Jack Parker Company, which owns the Le Parker Méridien in New York branded another of its properties with the Le Méridien flag during one of the most tumultuous times for the chain last July. According to Steven Pipes, vp/hospitality for The Jack Parker Corp., the addition underscored the company’s belief that there is a place for the brand in the market. “It’s amazing how strong this brand is, having held up to so many changes. It is a resilient brand, a unique brand, and certainly has a niche in the marketplace,” said Pipes. Despite the negative press regarding Le Méridien’s financial problems, business at the two hotels “is going very well,” said Pipes, who has met with Riley, said he believes the new executive has what Le Méridien needs to grow. “He’s savvy and knows what his priorities are,” said Pipes. The chain did, however, lose its Boston location this year. And while there may be some investors who wait until the dust settles around Le Méridien before they take a closer look at doing business with the chain, Riley noted there already have been a few bites for new deals this year. Meanwhile, Le Méridien expects to open 15 more properties over the next three years, with several new hotel openings planned for this year including properties in Malta, India and Thailand.
