By Allison Landa

Laurence Geller got an early start to his hospitality career: At the age of 15, he was working as a chef in the kitchens of Switzerland. "At that time, the Swiss were the best hoteliers in the world," he says. "I went there to do my trade, and then I realized I needed training and formal education while I was working. Switzerland didn't have part-time hotel education, so I went back to London." In his hometown, Geller began to build on his kitchen experience by working in other local restaurants.

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AGE: 58 EDUCATION: Graduated from Ealing Technical College's school of hotel management and catering. PROFESSIONAL EXPERIENCE: Founded Geller & Co., a gaming, tourism, and lodging company (1989–1997); executive vice president and chief operating officer of Hyatt Development Corporation (1984–1989); senior vice president of Holiday Inn (1976–1981); partner in Berins & Co., a national lodging consultancy practice (1981–1989); director of London's Grand Metropolitan Hotels (1971–1976). He began his career by first working as a chef in Swiss hotels, then returning to his native London to work at The Connaught Hotel, The Grosvenor House and The Park Lane Hotel while completing his hotel management studies. COMMUNITY ACTIVITIES: Current co-chairman of trustees of the Churchill Centre, member of the Board of Children's Memorial Hospital. BUSINESS ACTIVITIES: Member of the board of Gaylord Entertainment Co., former vice chairman of the Urban Land Institute's Commercial and Retail Council; past chairman of the Industry Real Estate Financing Advisory Council of the American Hotel and Motel Association, ambassador for North America for The Hotel and Catering Institutional Management Association of the U.K. AWARDS: Anti-Defamation League, Horatio Alger Award; American Jewish Committee, Human Rights Medallion. ATHLETIC ENDEAVORS: Ran 22 marathons. LITERARY ENDEAVORS: Recently wrote and published his first novel, Do Not Disturb, a fictional account of a suave global hotelier who is surrounded by talented and beautiful women and is also tortured by his personal demons. STRATEGIC HOTELS & RESORTS STATS: Global portfolio of 19 properties totaling approximately 9,675 rooms; holdings include the Ritz-Carlton in Laguna Niguel, the Hotel del Coronado in San Diego, the Marriott Paris Champs Elysées, and the Four Seasons Hotel Mexico City. Founded in 1997; public offering in June 2004; estimated $1.3 billion market cap and $2.8 billion total property value. QUOTE: "I'm not an ego buyer. I'm egotistic enough. My ego goes into my pride, and my pride goes into having really profitable, great properties. ... You're talking to a guy who's done nothing but hotels for 43 years. If I haven't learned something by now, I'm done."

He has since parlayed his early experience into an enviable career. Today, Geller is president and CEO of Chicago-based Strategic Hotels & Resorts (NYSE: BEE), whose 10,000 room, 19 property portfolio includes some of the world's most well-known luxury properties. The company's global portfolio is valued at approximately $2.8 billion and the company trades with an equity market capitalization of about $1.5 billion.

Previously, Geller was chairman and CEO of Geller & Co., a gaming, tourism and lodging advisory company that he founded and led from 1989 to 1997. While heading Geller & Co., he realized the profitability of asset management in the hospitality trade.

Goldman Sachs provided $200 million in capital through its Whitehall Funds, as did Security Capital. Geller supplied money of his own, and, in 1997, Strategic Hotels & Resorts was born.

Presently, the company's portfolio touches not only some of the most exclusive corners of the United States, but Europe and Mexico as well. The portfolio includes luxury properties, business resorts and large convention hotels. Geller chooses to purchase them after a painstaking research process reveals favorable demographics and potential for added value.

When Portfolio caught up with Geller, he was in the middle of buying the company's 19th property, the Westin St. Francis on San Francisco's Union Square, for $440 million. The company plans to renovate the 1,195-room hotel and regain what Geller considers "its lost luster."

Portfolio: You've spent more than 40 years in the hospitality business, and have described yourself as a "hotel guy." In 1997, you started your current firm, Strategic Hotels & Resorts. What are your goals for this company?
Geller: We are out to do two things: To have the best lodging portfolio in the REIT world, a very pure high-end portfolio. But we also want to have a portfolio where we can utilize our value-added skills. We have institutionalized asset management. We buy properties that we can asset manage and add value. For example, we bought the Intercontinental on Chicago's Michigan Avenue. It has an acre of land that includes a coffee shop, a shoeshine stand and a tea room. That's hardly the highest and best use of Michigan Avenue frontage. We're in the process of repositioning it into retail space.

We are an acquisition, redevelopment and repositioning company. We've found that the best thing we can do is intensely manage the assets of a property, and we found that contrary to hitherto-popular belief, we can make a property more profitable than one that is without an asset manager.

Portfolio: In March, the company changed its name and ticker symbol. What was the reasoning behind the change?
Geller: We switched our name from Strategic Hotel Capital, Inc. to Strategic Hotels & Resorts, Inc. The name Strategic Hotel Capital would imply that we are a passive applier of capital. Strategic Hotels & Resorts better reflects what we are now: active managers of our real estate, not relatively passive owners.

Portfolio: This leads to your logo—a bee—which is now also your ticker symbol. How did you settle on the bee concept?
Geller: The bee is closest to what we are: industrious, collaborative, team-driven, building our communities and never forgetting we have a sting in our tail. Truthfully, we like there to be a buzz about all our properties.

Portfolio: How do you do that? How do you differentiate yourselves?
Geller: We're very driven and property-specific. We have to focus on our own individual piece of real estate, so we use every tool at our disposal. We use our own metrics to determine worth—we use yield per square foot. We do the consumer research on our hotels before we do a room refurbishing. We do focus groups. Then we remodel rooms based on these results.

Sometimes we'll change the consumer demographics. When we bought the Ritz-Carlton in Half Moon Bay, Calif., the average age of the customers ranged between 45 and 60. Our research said that was far too narrow a band and that it should be younger. So we added value—fire pits, for example—in order to shift those demographics to where they needed to be. The place is sizzling today.

Portfolio: Purchasing the Westin St. Francis brings Strategic Hotel's portfolio to a total of 19 properties. Since you have such a small, select set of ownings, you must have a specific set of criteria that draws you to a particular property.
Geller: Obviously, we have to like the market and also like where we are in the cycle. We want to know: Is the property a blank canvas so we can "paint" our value-added skills? Can we implement our own proprietary management systems?

We look at the market positioning, as well as the property itself. Is there adequate space and enough rooms? Can we build more suites and can we build our proprietary wine-tasting rooms? Can we change the mix of customers?

The process goes on like that. We are buying into an opportunity to expand operating businesses, not just real estate. That is our differentiator. We have to believe we are buying great real estate which underpins the value even when the cycle turns down.

Portfolio: You put great stock in your proprietary systems, which allow you to make each acquisition uniquely your own. Is there a particular hotel that you feel exemplifies the success of this approach?
Geller: Probably the most dramatic success is the Four Seasons Resort in Punta Mita, Mexico. Our timing wasn't great at first—we bought it in early 2001. Although we put in tiny amounts of money, we've quadrupled our investment in four years. We've expanded to the family market, performed our own rate-sensitivity analysis, set goals for yields per square foot, added value, added services, and put in our industrial-engineering food techniques and our labor-management systems.

Portfolio: Obviously, adding value is vital for maintaining performance within your niche. What other factors set you apart from the competition?
Geller: Since we genuinely believe that we're in the business of adding value, human capital is very important to us. That's another one of our key differentiators, and it's a critical component of who we are. We believe we have to be very active, so we hire and entice the very brightest and best in the lodging industry. They're worth the expense because they focus on the company and give us incredible attention.

Portfolio: Finding the best and the brightest can also present problems—recruiting, hiring and maintaining a fleet of personnel takes time. Will this be a challenge to you going forward? What other difficulties are facing your company in the coming years and how do you plan to tackle them?
Geller: Our challenge is human capital—it is indeed hard to find and keep—as well as financial capital. Until the company is recognized and rewarded for having the best portfolio and the best management team, I'll feel we haven't achieved success yet. We went public in June 2004; in 2005 we were the fifth-best performer in the overall REIT sector, with returns exceeding 30 percent. In the most recent 12 months, we've had 60 percent shareholder return, so we've done okay so far. But I want to see us truly recognized for what we are: the best value-added group in the REIT world. We don't think about it in terms of size–it's about profitability. We intend to position the company more off market, and continue to clean up our historic properties.

We want to keep finishing the properties that are under refurbishment, redevelopment and repositioning. We want to have a portfolio that will have internal growth programs with physical and operational products that can go on for three to four years, so we can have growth without buying another asset. We have cyclical growth and acquisition growth, but every one of our properties also has value, growth that isn't reliant on external events. We have a combination of the highest level of product with great internal growth.

Portfolio: How will you continue to move Strategic Hotels & Resorts in the right direction?
Geller: The virtues of this company are passion, creativity, energy, research and professionalism. The people we have are very straightforward, energetic and team-driven. The economy is favorable to the luxury market at the moment. Things are good, and they're only going to get better.