Girdling the World

At a White House breakfast one day in 1944, Franklin Roosevelt and Pan American Airways' Juan Terry Trippe put their heads together over Latin America's impending dollar shortages. One way to solve them, said Roosevelt, was to in crease tourist traffic from the U.S. by supplying better hotels for travelers. Since any increase in travelers would mean a boost for Pan Am as well, Juan Trippe got right to work.

He sent the late Lucius Boomer of the Waldorf-Astoria and Pan Am Vice President H. B. Dean on a tour of South America to drum up local capital to build or buy hotels. The field looked so ripe that Pan Am put up $1 million to start a new subsidiary, Intercontinental Hotels Corp., arranged a $25 million credit with the Export-Import Bank, and decided to girdle the globe with hotels.

No Builder. Intercontinental made deals to manage three South American hotels (worth $6.2 million) at Belem, Santiago and Barranquilla, and raised the capital to start three more (worth $17.5 million) abuilding at Montevideo, Caracas and Bogota. It began negotiations to build 17 others stretching from Japan to Saudi Arabia. Last week I.H.C. added two more links to its projected $100 million chain.

It signed contracts for the building of two new 150-room hotels costing $4.500,000--one --in Bangkok, the other in Maracaibo, Venezuela, 10,750 miles away.

As in its previous ventures, I.H.C. will neither build nor own the new hotels itself. I.H.C. arranges loans on its $25 million credit, raises local capital, pro motes, designs and operates the hotels for a fixed fee plus a cut (up to 25%) of the profits. Chief arranger, money-raiser and promoter for the company is President Wallace Whittaker, 58, who joined I.H.C. after 18 years as general manager of General Motors' Inland (rubber & plastic products) Division. Chief operator is Byron Calhoun, 48, a one-time bellhop who became part owner of Minneapolis' Radisson Hotel (he sold out for $900,000).

New Traveler. Though I.H.C. is still losing money, Whittaker and Calhoun hope to turn the profit corner soon. To do so they are designing their hotels for the middle-income American who, they think, will be their greatest customer in the next decade. Said Calhoun: ". . . Hotel planners who ignore this new type of volume travel--and think only in terms of luxury [trade]--are likely to find themselves with empty rooms."

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