Acquisitions, joint ventures breathe new life into hotels

Like Mark Twain, whose death was prematurely exagerated, the American hotel industry, while not in the strongest shape, is at least breathing, as evidenced by a sudden wave of acquisitions, joint ventures, increased foreign investment and somewhat improved profits.

The persistently pessimistic investment reports and gloomy marketing trend studies that have depicted the hotel industry in a paralytic state have missed the capital restructuring that is changing the shape and ownership positions in the segment.

Several major hotel concerns are involved in various stages of acquisition or divestment, and another two have teamed up with overseas investors -- primarily from Hong Kong -- to pump new capital into the companies.

Moreover, for an industry widely reported to be on its death bed, some recent earnings statements show that some hotel companies are enjoying a healthy return on investment and, most important, are gaining higher occupancy rates.

Among those reflecting both a change in ownership and reporting profits at the same time is the new hotel company, Promus Cos., which was spun off from the Holiday Corp. to shareholders in a $1 billion deal in February.

Promus Cos. (pronounced promise) owns and operates Holiday Corp.'s former hotel brands, Harrah's casino and hotels, Embassy Suites Hampton Inn and Homewood Suites.

Led by its Las Vegas, Nev., gaming operations, the new company reported first-quarter net income of $17.6 million on a 7- percent rise in revenues, to $233.8 million, for the period ended March...