HOTELS: Six for Sheraton

  • Share
  • Read Later

In Boston's dingy old Ames Building a month ago, Ernest F. Henderson, rumpled, fast-moving president of the Sheraton Hotel chain, got an urgent telephone call from Montreal. His Canadian manager, John C. Udd, excitedly told him that Canada's biggest private hotel chain, the Cardy Corp., was for sale. If Henderson wanted to buy it, he would have to give his answer by 5 p.m. that day. Henderson did some quick figuring and called back, "Yes." Then he hopped a train for Montreal.

This week Henderson took the Montreal train again, to clinch the deal with Montreal's Hotelman Vernon G. Cardy, who is equally well-known as a horseman. ("There is nothing so good for the inside of a man as the outside of a horse"). For an undisclosed sum, Henderson would get the majority stock in six hotels with reported assets of $15.8 million, including two of Canada's largest—Montreal's 1,100-room Mount Royal and Toronto's 1,100-room King Edward. The others: Hamilton's Royal Connaught, Windsor's Prince Edward, Niagara Falls' General Brock, and the Alpine Inn at Ste. Marguerite, Quebec, which Henderson plans to sell as soon as he can find a buyer. Henderson figured that the deal would boost his Sheraton Corp.'s total hotel assets to $64 million, though still well behind Conrad Hilton, the biggest U.S. hotel operator.

Henderson, who likes to sell less profitable hotels for cash while buying promising new ones on credit, has been buying & selling so fast recently that he could hardly keep track of his hotels himself. Only last August he bought Canada's Ford chain (Toronto's Ford Hotel, Ottawa's Lord Elgin, Montreal's thriving new Laurentien), and with it got Ford's president, big (6 ft. 2 in.), husky (200 lbs.) Jack Udd, who will now boss the bigger Canadian operation.

To finance the latest deal, Henderson had already sold the Lord Elgin (for $2,450,000 in cash), and the Sheraton Hotel in Philadelphia and was negotiating to sell the Sheraton in Newark, N.J. He expects to sell Toronto's Ford soon. If such quick changes were bewildering to Sheraton stockholders, they had also proved profitable: in the chain's last fiscal year ending in April 1949, Henderson had boosted the net from $1.6 million to $3.3 million after taxes. At the latest count, he figured his Sheraton Corp. had 31 hotels in 26 cities. His pride: Manhattan's Park Sheraton, on which he had just spent $500,000 remodeling, and which boasted a 99% occupancy. "The money spent," says Henderson, "brings back returns. We can have our cake and eat it."