College Park, Md. – Host Marriott Corp. will buy 38 hotels from Starwood Hotels and Resorts Worldwide Inc., including Denver’s Westin Tabor Center, for roughly $3.4 billion, the companies announced Monday. The deal will free Starwood to build its luxury brands and will boost Host’s upscale and overseas hotel and resort holdings.
The deal calls for Bethesda-based Host to give Starwood shareholders $2.33 billion in Host stock and pay $1.06 billion in cash. Host also will take on $700 million in debt as part of the deal.
The 430-room Westin Tabor Center will continue to be managed by Starwood under its current flag for at least 20 years.
“We are still committed to this property and destination, and our goal is to continue to provide the excellent level of service to our guests,” Starwood spokeswoman Nadeen Ayala said in a statement.
Starwood, based in White Plains, N.Y., owns and operates Sheraton, Westin, St. Regis and W hotels. The company is moving toward operating its properties, rather than owning them, an approach adopted by competitors such as Marriott International Inc.
“This is a major step in Starwood’s evolution as a company to become more of a fee-based, brand-centric company,” said William Crow, an analyst with Raymond Jones & Associates.
Host will pay Starwood management fees, an arrangement that is usually more profitable for lodging companies than owning their own hotels, Crow said.
Starwood shares rose 76 cents, or 1.3 percent, to close at $60.02 Monday on the New York Stock Exchange. Host’s shares fell 79 cents, or 4.5 percent, to close at $16.65 on the NYSE.
Starwood chief executive Steven Heyer said shedding the real estate would let the company focus on selling its brands to younger guests and people seeking upscale amenities.
In September, Starwood announced that Denver is one of five cities in which it will launch a new urban brand, Aloft, a less expensive version of its trendy, upscale W Hotels division.
Starwood manages six metro-area hotels and will continue to own the Four Points by Sheraton Denver Cherry Creek.
As a result of its greater diversity of brands, Host Marriott will drop “Marriott” from its name to become Host Hotels and Resorts.
The 38 hotels encompass about 19,000 rooms and include Starwood properties in New York, California, Canada, the United Kingdom and Chile. Two resorts in Fiji are also included.
Denver Post staff writer Julie Dunn contributed to this report.
