Spokane firm vaults to top of hotel industry

Associated Press

SPOKANE – From this medium-sized Eastern Washington city, Don Barbieri’s family is stretching its arms around the West.

Barbieri is chairman, president and chief executive of WestCoast Hospitality Corp., which doubled in size with the $51 million purchase of Red Lion and Doubletree hotels on Dec. 31.

The deal gives the Spokane-based hotelier nearly 90 hotels and more than 15,000 rooms, operating in every western state but New Mexico.

“The Red Lion acquisition will bring us into 34 new markets, and we expect to increase our market share with the combined sales efforts of the two chains,” Barbieri said.

WestCoast – which started from one hotel in 1976 – had $126 million in sales in 2000.

“What they’re doing in the hotel industry is certainly newsworthy,” said Andrew Olsen, managing partner of The Chambers Group, a Seattle hospitality industry consulting company. “From out of nowhere, WestCoast has suddenly become a force to be reckoned with.”

How did that happen?

Through acquisitions of full-service hotel properties in small, medium and large cities that are attractive to family vacationers, business travelers and convention planners, Barbieri said.

The Red Lion acquisitions come when the hospitality and tourism industries are coping with the negative effects of Sept. 11 and a slumping economy.

“It is a very difficult time. Corporate travel was down in 2001 and travel in general is down since Sept. 11,” Olsen said. “Every week, there are new issues related to travel.”

Barbieri said West Coast has felt the chill, especially in business travel, but said bookings have started to build again. Tourists who formerly booked foreign trips may look for scenic places closer to home, he said.

Although WestCoast makes most of its money from lodging, the company has other segments that make it stronger, Barbieri said in a recent interview.

“We’re not a hotel company alone. Our strength is the integration of three divisions within our company,” Barbieri said. “We started out in real estate and property management. That is our foundation.”

WestCoast operates an entertainment division that provides tickets and travel packages, so the company can use the newly acquired hotels in new tour packages.

The company’s history of owning and operating hotels began in 1976, when it built the River Inn in Spokane. In 1980, the company established its proprietary Cavanaughs brand name.

In 1998 the company completed an initial public offering on the New York Stock Exchange. At the end of 1999, the company completed its acquisition of WestCoast Hotels, Inc. and subsequently re-branded its Cavanaughs Hotels to the WestCoast name, changing its name to WestCoast Hospitality Corp.

Son Stephen Barbieri, vice president for corporate relations, is one of six family members working for the company.

“We relish that. The feeling is, if a family member wants to be involved, we’d love to have them in the company,” Barbieri said.

The company started out as a real estate management and development company in 1937, when Barbieri’s father, Louis Barbieri, teamed with Frank Goodale to form Goodale &Barbieri Co.

WestCoast Hospitality is evaluating the best way to merge the Red Lion chain with its own hotels, Stephen Barbieri said. No immediate changes are planned, although the Red Lion hotels will probably switch to the WestCoast name eventually.

The move from a privately held company has not been difficult, Barbieri contends.

“You’re not out to serve Wall Street. You’re out to serve your customers,” Barbieri said. “If you do a good job, Wall Street will reward you.”