I have yet to stay at a DoubleTree Hotel in which I wasn't completely satisfied in all respects. And being a Hilton Honors Diamond member, I have stayed at more than 20 of them all over the US. I used to stay at Embassy Suites, but now I find DoubleTree consistently much better. Evansville isn't getting the opportunity to have just a large hotel downtown, it instead is getting a once-in-a-lifetime chance at a superb DoubleTree Hotel to be constructed at an optimal location downtown.
DoubleTree is part of the Hilton Hotel Worldwide organization, along with Hilton, Embassy Suites, Hampton, Hilton Garden Inn and several other hotel chains.
Blackstone Group, a very well-run huge private equity investment firm, took Hilton Hotels Worldwide private in a leverage buyout (LBO) for a purchase price of $26 bil in late 2007, about a year before the financial meltdown occurred. They have been able to reduce Hilton's Long-term Debt by $6.8 bil during the first 4 1/2 years of the Obama Administration. And the current value of Hilton Hotels Worldwide is roughly 50% above Blackstone's Book Value of its Investment in Hilton.
Blackstone Group is planning to take Hilton Hotels Worldwide public in an Initial Public Offering (IPO) soon. After the IPO, Blackstone Group will still have a major ownership in Hilton Hotels Worldwide.
This is a very opportune time for a hotel IPO because common stock prices of publicly-held hotels have just ripped upwardly during the Obama Administration......for instance, Wyndham Worldwide's (Days Inn, Super 8, Baymont, Microtel) stock price has gone from $3.36 per share from Feb 23, 2009, very early in the Obama Administration, to $61.64 presently on Sept 23, 2013, up an incredibly off-the-charts 1,735%, Starwood Hotel & Resorts Worldwide's (Sheraton, Westin) stock market value has gone from $11.03 on Feb 23, 2009, very early in the Obama Administration, to $67.18 presently, up an incredible 509% and Marriott International's common stock market value has gone from $12.98 on Feb 23, 2009, very early in the Obama Administration, to $43.00 presently, up a very robust 231%.
These stellar stock price appreciation results for hotels during the Obama Administration is consistent with their earnings turnarounds. Wyndham Worldwide had its $1.074 bil Audited Net Loss in 2008 turn into a $399 mil Net Income in 2012. Starwood Hotel and Resorts had its $3 mil Net Loss in 2009 turn into a $470 mil Net Income in 2012. And Marriott's $353 mil Net Loss in 2009 turned into a Net Income of $571 mil in 2012.
In Hilton Worldwide Holdings just recently released S-1 filed with the SEC in conjunction with its upcoming IPO, just check out its incredible annual Audited Net Income (Loss) turnaround and very robust uptrend:
2008.....$5.663 bil Net Loss
2009........$532 mil Net Loss
2010........$128 mil Net Income
2011........$253 mil Net Income
2012........$352 mil Net Income
Further, for the first half 2013, Hilton Worldwide Holdings Net Income was $189 mil, up 66% from the $114 mil earned in the first half of 2012.
Blackstone Group sells limited partnerships in itself and the market value of one limited partnership unit has gone from $3.89 on Feb 23, 2009 to $24.10 presently, an increase of an off-the-charts 517%.
The key point here is that Blackstone Group, Hilton Hotels and DoubleTree are exceptionally astute financially. Do you really think they haven't already thoroughly vetted HCW, which has already done more than a handful of hotel projects for Hilton?
Frankly, I see little difference between how most Democrats on Evansville's City Council are unreasonably trying to kill the DoubleTree Hotel and how all US House Republicans are unreasonably and dramatically cutting the short-term US Government annual budget by continuing to use the massive across-the-board sequester cuts. In both cases, what results is much higher unemployment and much lower economic growth than there would otherwise be. And also in both cases, desperately needed long-term investments are being bypassed.
To assert that Evansville shouldn't have to contribute much to this DoubleTree Hotel construction is a flat-out lack of financial savvy. One can logically argue that the size of the DoubleTree Hotel and Apartments Complex should be somewhat smaller, thereby reducing Evansville's dollar contribution even further, but it should not be too much smaller than the most recent proposal.
But it should be pointed out that by the Evansville City Council being so incredibly tough as nails in its negotiations, they now have a much better economic deal for Evansville residents to the tune of a $17.5 mil lower Subsidy granted. Hats off to them for this!