Paramount Hotel Group Grows Portfolio To 28 Hotels In First Year Of Operation

FAIRFIELD, NJ— In its first year of existence, Paramount Hotel Group has built a 28-hotel portfolio, and has more properties on the drawing board. “We started at zero last year, so it’s been an extremely good year, and we’re continuing to grow,” said CEO David Simon. Specializing in the development, construction and management of lodging properties, Paramount was founded last December by Simon and Ethan Kramer, who is president of the new company. Simon was formerly CEO of Prime Hospitality Corp., and Kramer was senior vp at Prime. Paramount has an ownership stake in 27 of the 28 hotels in its current portfolio; the remaining property is a third-party management contract. The hotels, which are located in the Northeast and mid-Atlantic states, were all previously Susse Chalets. Twenty of them are being converted to the Fairfield Inn by Marriott brand, Simon reported. “On the other eight properties, we’re negotiating with major brands,” he said. Renovations are now under way on the Fairfield Inn properties, Simon said. “We’ll have seven of them done by year’s end, with the balance completed by June of 2001,” he said, adding that all are currently open and operating. Paramount is also developing a 156-room Courtyard by Marriott in Alexandria, VA. “We have all the zoning okays and anticipate the groundbreaking will be in the spring,” Simon said. Along with expanding its portfolio, Paramount has been adding to its management team during the past year. “We’ve grown it since the company was formed last year from five to 14 now in our corporate office” in Fairfield, NJ, Simon said. Paramount will continue to focus on New England and the mid-Atlantic states as it expands, according to Simon. “This area still offers the best opportunities in terms of occupancy and rate, and it’s difficult for our competitors to get a foothold in,” he said. Simon expects Paramount to have between 33 and 35 properties in its portfolio by the end of 2001. “We’re in discussions with different owners for management contracts and with others where we would have an equity stake,” he said. “We’re looking at all segments, from limited service to full service.” While Simon declined to estimate what Paramount’s annual revenues will be for the year, he said, “We’re very pleased with results for 2000 and are optimistic about 2001.” He added that the lodging industry as a whole should have a “solid” year in 2001. “It may not be as good as this year because the economy is showing signs of slowing. But supply will also slow and that will help the industry,” he said.