Strategic Hotels & Resorts Doubles Market Cap, Prepares for Debt Maturities

| About: Strategic Hotels (BEE)

In the period between our last coverage post on June 2nd and today, BEE has doubled from 1.31 to 2.56.

While Bernanke points to a recession end inasmuch as the market is concerned, to many the recession isn't over while unemployment rates remain at record highs. The wealthy count on largely stock/real estate capital gains to fuel their spending. The return of the stock market to pre-correction levels is leading more travelers to discover that they can afford to breathe a sigh of relief at an opulent hotel after a tough last year.

Europeans are finding BEE's 5-star properties more affordable than ever with the Euro hitting a year high against the dollar.

Two Four Seasons hotels in Mexico saw a EBITDA decline of 82% in 2008 due to H1N1.

In the August conference call the CEO Laurence Geller points out that "an undesirable, and frankly, unfair luxury taint [was] caused by the government's comments earlier this year." The progressive US leadership has espoused a corporate direction of limited consumption under the heat of public furor over Wall St bonuses.

There are still a few question mark properties soon reaching their 2011 debt maturities. The Fairmont Chicago has formally been listed with a broker. The Intercontinental Prague may be brokered. The Hotel Del Coronado is purported to have "some great partners with KSL and KKR," opines James Mead, BEE CFO, in the August conference call, but still remains a cash flow concern.

Disclosure: Long BEE