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Sheraton replacing Radisson downtown: Experts say new brand should give hotel a boost

April 2, 2007

The downtown Radisson Hotel City Centre will get a new life by the end of this year, converting into the Sheraton Indianapolis City Centre Hotel.

Experts say the change is good for downtown and that hotel owners are trading up by switching to the Sheraton brand.

"Clearly, that would be a step up for the hotel," said Rob Hunden, president of Chicago-based Hunden Strategic Partners Inc., a firm that consults on hotels and convention facilities. "It is clearly better than a Radisson."

With 374 rooms and 45 suites, the Radisson Hotel City Centre is the seventhlargest hotel in the Indianapolis area, according to IBJ research.

Radisson Hotels is a brand of the Minneapolis-based Carlson Cos., which also owns T.G.I. Friday's. A company spokeswoman said Carlson has invested heavily in the brand, making more than $516 million in renovations since 2005.

Hunden said Radisson hotels are geared more toward leisure visitors and are declining in status compared with Shera- ton. Radissons are primarily franchised as opposed to company-owned and they don't have strong group-booking or rewards systems, he added.

"It's not a strong brand and it's not getting stronger," he said.

In contrast, the Sheraton brand is on the rise, he said. New York-based Starwood Hotels & Resorts Worldwide Inc. bought ITT Sheraton Corp. for $14.3 billion in 1998, which was a turning point for the brand, Hunden said. From 1998 to 2002, Starwood invested more than $450 million in the hotels, then announced another $130 million in renovation plans.

And the brand is still expanding its reach, adding 1,900 rooms worldwide from 2005 to 2006, according to federal filings. By the end of 2006, there were 396 Sheratons in 65 countries with 135,900 rooms.

There is currently only one Sheraton operating in Indianapolis-the Sheraton Indianapolis Hotel & Suites at 8787 Keystone Crossing-a hotel that also carried the Radisson brand before converting in 1999. The 560-room hotel is the area's third-largest.

"Since [Starwood's] acquisition, Sheraton has started to retake its brand image and really take it seriously," Hunden said. "It's a solid urban hotel experience."

Finding its niche just slightly beneath a Westin in Starwood's portfolio of brands, a downtown Sheraton would have a leg up in the convention market, experts say. And by being part of the Starwood chain, it would be able to handle any overflow crowd from the downtown Westin.

"That property has needed an investment for a long time," said Hunden, and will likely need "a significant investment in the bathrooms, furniture, fixtures and equipment to make the jump."

Dallas-based Ashford Financial Corp. owns the property on the corner of Ohio and Meridian streets. The company also previously owned the 261-room Radisson Hotel Indianapolis Airport, but sold it recently to Wisconsin-based Odyssey Hotels.

A company spokeswoman confirmed the renovation plans but referred questions to Dallas-based Remington Hotel Corp., which operates the downtown Radisson.

A Remington spokesman said officials there were not ready to comment. But Starwood spokeswoman Leila Siman confirmed plans to change hotel brands and said the new Sheraton will be open by the end of this year or very early 2008.

"We're really excited about coming to downtown Indianapolis," Siman said. "Starwood as a whole is aggressively growing its footprint all over the world."

She said the changeover will go beyond the building's appearance.

"We're focusing on branding, lifestyle programming, amenities and services which will create memories for our guests," she said.

She referred more detailed questions about the renovations to Remington, which declined to comment.

A hotel industry observer said the hotel likely won't close during the rebranding process and renovations.

"It's really dangerous for a hotel to close," said Mark Eble, a hotel consultant and regional vice president for Philadelphia-based PKF Consulting Corp. Apart from the lost operating revenue, the closure also hurts the perception of a property.

"They will go through any amount of pain not to close down," he said.

Eble said to convert to a Sheraton, Starwood officials will closely inspect the Indianapolis property.

"There will be a list of things the owner has to do to move to the new brand," he said.

For example, all Sheraton rooms must feature a "Sweet Sleeper Bed." In fact, if guests fall in love with the bed or bedding, they'll be able to buy one for their homes.

Elble said the downtown location's agreement with Radisson likely was set to expire because trying to switch brands in the middle of a contract can be an expensive undertaking.

"You can't willy-nilly change without some significant charge," he said.
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