Preferred Changes to Profit StatusPreferred Hotels & Resorts Worldwide, Chicago, converted its business structure to a for-profit shareholder-owned corporation. The 30-year-old nonprofit organization provides direct marketing programs and reservation services for more than 110 luxury hotels and resorts.
According to Peter Cass, president/CEO of Preferred, the new structure is designed to let the organization raise capital more quickly for development projects and to help promote stronger marketing alliances with other for-profit enterprises.
"Mergers and business alliances have flooded the global hospitality industry with a sea of hotel brands, which makes this the most competitive market we have ever faced," he said. "This also provides us with a better and more professional stance for our company."
Preferred will provide the same services for its members that it did in the past. The company's new name will be Preferred Hotels & Resorts Worldwide Inc. Two classes of stock will be issued. One will serve as the basis of a one-member, one-share, one-vote governance system while the other will serve as a vehicle for raising capital for special development projects. Both will be offered to current members at no cost. Future members, however, will have to purchase shares at a market value determined by the organization's net worth.