Slim eyes Florida, Mexico for hotel growth

Florida, Mexico City and the Pacific resort of Acapulco will be key for the expansion this year of Carlos Slim's Ostar hotel chain, as the world's richest man continues to take his empire well beyond telecoms.

Ostar, short for Orient Star -- the name of the store that kick-started the wealth of Slim's Lebanese immigrant father in the early 1900's -- bought a Ramada hotel in Kissimmee last year, located a mile (1.6 kms) from Orlando's Walt Disney World.

"We want to make this hotel a destination for international tourists. Brazilians, the British go there a lot," Ostar's Chief Executive Roberto Slim Seade told Reuters on Friday in an interview at his Mexico City offices.

Slim Seade, the nephew of billionaire Slim, has led the hotel business for the past six years, taking over old, outdated properties across the country to revamp them.

Orlando, a hot spot for families with small children due to all the entertainment options in the area, has around 100,000 hotel rooms, Slim Seade said. Mexico City and it's metropolitan area, with 20 million inhabitants, have 28,000 rooms.

Now under the umbrella of Inmuebles Carso, the real estate unit that made its market debut in January after being spun off from parent Grupo Carso, Ostar operates 1,500 rooms. Its properties are worth around USD 100 million.

Slim, who topped the list of Forbes' richest people for the second year in a row this month, oversees an empire that ranges from coffee shops to mining and telecoms.

He bought fixed line phone company Telefonos de Mexico in 1990, and today holds stakes in companies including department store operator Saks Inc, publisher New York Times Co, oil services company Bronco Drilling and money manager BlackRock Inc.

Revolution romance

While Ostar is still a small player compared to other Mexican and international hotel chains in the country -- it owns six hotels and operates another one -- Slim Seade said the company could piggy back on the real estate business to expand.

Ostar's jewel is the 100 year-old Geneve, Mexico's first hotel with a phone switchboard and where President Porfirio Diaz dined on USD 3 worth of food with his family the day the Mexican Revolution started on Nov. 20, 1910.

Together with the Calinda Beach in Acapulco, the two hotels contribute around 80% of Ostar's revenue. The hotel operator also has properties in the states of Veracruz, Aguascalientes, Morelos, and Tabasco.

Ostar also plans to operate a luxury hotel next to Slim's recently inaugurated Soumaya art museum in a posh residential area of Mexico City. The new facility, part of a complex that includes stores, theaters, restaurants, parks, offices and apartments, is expected to open in two years, Slim Seade said.

Growing violence from Mexico's war on drug cartels, launched by President Felipe Calderon in late 2006, has scared off many tourists but investors in the multi-billion dollar industry are pouring funds into the country, believing the violence will ease in a few years.

"In Acapulco, security fears have hurt some," Slim Seade said. "We have to refocus on the domestic market."