Tagged: Joie de Vivre Hotels

Chip Conley and his investors were forced to make some tough decisions.

Several months ago, Conley, the CEO of Joie de Vivre Hotels in San Francisco, California, witnessed competing hotels facing potential foreclosure. According to the Wall Street Journal, “there is about $5.6 billion in securitized mortgages tied to hotels coming due this year and next…27.8% cover properties now estimated to be worth less than their mortgage balances.” (source: Trepp LLC’s Foresight Analytics). Billions of dollars of mortgages are coming due in the coming years. Analysts are forecasting that the hotel industry will not regain its full strength until 2013.

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Photo courtesy of Chip Conley 

Several months ago, Chip Conley and his investors faced a fork in their growth plan.

Conley, the CEO of Joie de Vivre Hotels in San Francisco, California and three-time business author, witnessed competing hotels facing potential foreclosure. According to Trepp LLC's Foresight Analytics,  about $5.6 billion in securitized mortgages tied to hotels is coming due this year and next, and 27.8% cover properties that are now estimated to be worth less than their mortgage alances. Analysts are forecasting that the hotel industry will not regain its full strength until 2013.

Conley had some tough choices ahead. He could either choose to stay small, ignore the pressure to bring in more partners to cover the difference (a form of benign neglect), default on a few properties, or attract more capital from new investors to fuel growth and acquire distressed properties. Ultimately, he and his team agreed to sell a majority stake in JDV to Geolo Capital and pursue the latter option.

I had the pleasure of meeting Conley this month, and how he intends to thrive amidst a dismal industry shakeup.

If you lead a company that is facing debt problems, limited access to capital, a critical growth crossroads, or a combination of all three, invest 17 minutes to hear Chip's sage growth advice.