We'll be alright, says Le Meridien CEO

The CEO of the financially challenged hotel group arrived in the region last week to reassure hotel owners that the group and the brand name are safe.

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By  David Ingham Published  March 10, 2004

Robert Riley, chief executive of Le Meridien hotel group, arrived in the Middle East on Tuesday with a reassuring message for owners of hotels managed by the group. Regardless of the company’s well publicised financial problems, Riley insisted that hotels are operating as normal and that the Le Meridien brand will survive any possible changes in ownership. “Our balance sheet issues have never diverted our folks from their mission, which is operating great hotels and delivering great services and great return for the owners,” he told ITP.net. Le Meridien currently carries around £1 billion in debt, mostly held by Lehman Brothers. Negotiations with Starwood to take a minority stake in the group are ongoing. The sides aim to reach an arrangement that would enable Le Meridien to control costs by sharing key services, such as IT and procurement, with Starwood. An agreement, Riley confirmed, is still far from a done deal. “There’s more discussion to go on concerning price and there’s more discussion to go on concerning the value that can be created through the shared services,” he explained. “We’re optimistic we’re able to work something out with Starwood, but we think it will take a couple more months before we really know if we have a firm deal there.” Whether or not a firm deal with Starwood emerges, Riley is adamant that the Le Meridien brand will survive intact. “I see, at the end of 2004, Le Meridien company being majority owned by Lehman Brothers, perhaps with Starwood as a majority shareholder, perhaps not, perhaps with the original shareholder, Nomura, which bought it two years ago, having a small piece of the equity and perhaps having some new investors,” he says. Riley's visit included a meeting with Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates Airline and owner of several properties in the UAE managed by Le Meridien. Sheikh Ahmed, he said, had not mentioned the possibility of taking management of his hotels away from the group. “He’s fully supportive of us, he appreciated my coming, and I think he appreciated my enthusiasm and my commitment to taking Meriden to the next stage,” said Riley. “We’re planning at least two additional hotels here with His Highness. The relationship is strong, and the relationship is strong because the folks at the properties in the region have been doing a great job and have not been distracted by the balance sheet issues at corporate level,” he added.

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