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The sale of Westin Hotels & Resorts to an investor group is expected to mean an increase in advertising and a doubling of the chain's size within five years.

Tokyo-based Aoki Corp. has agreed to sell the upscale hotel chain for $561 million to an entity formed by Starwood Capital Group, Greenwich, Conn., and Goldman, Sachs & Co., New York. The Edward Thomas Cos. of Beverly Hills, Calif., which owns and operates hotels in the U.S., also will participate in the venture.

The sale, which is expected to close in early 1995, is likely to mean a boost for Westin's $5 million advertising budget and agency Cole & Weber, Seattle.

The investor group wants to double the number of Westin-managed hotels beyond the current 80 hotels in 19 countries. Much of this expansion will occur internationally.

"We expect an infusion of resources," said Tim Maleeny, group account director at Cole, which is owned by Ogilvy & Mather. Westin's "advertising has had to work harder than its competitors because it had been underfunded at the ownership level."

Hotel analysts also are bullish about the sale. It reflects renewed vitality in the hotel industry-especially in the luxury and upscale segment.

"The sale of Westin is great news for both Westin and the hotel industry," said Bjorn Hanson, managing director of hospitality research for Kidder, Peabody & Co., New York. "Westin is one of the grand hotel names, but the organization hasn't achieved its potential in growth, market performance and market share. It needs an image boost in the U.S. and [internationally]. We see an aggressive owner in Starwood to make effective use of their assets."

The proposed Westin sale is the latest deal to be announced by a luxury or upscale hotelier, the leading segments in the hotel industry. Hilton Hotels Corp. last month announced it would consider selling itself or spinning off some of its businesses. ITT Corp. is also exploring spinning off all or part of its ITT Sheraton franchising business.

"The current owners [of upscale hotels] sense it's a good time to capitalize on the current level of optimism in growth prospects," said Mark Woodworth, chairman of Coopers & Lybrand's hospitality consulting group, Atlanta.

"The hotel industry story right now is just great in terms of supply, demand and profitability. Good times are back," Mr. Hanson said.

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