As filed with the Securities and Exchange Commission on November 23, 1998
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HOSPITALITY WORLDWIDE SERVICES, INC.
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(Exact Name of Registrant as Specified in Its Charter)
New York
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(State or other jurisdiction of
incorporation or organization)
11-3096379
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(IRS Employer
Identification Number)
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450 Park Avenue
Suite 2603
New York, New York 10022
(212) 223-0699 (Telephone)
(212) 223-0865 (Telecopier)
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(Address, Including Zip Code, and Telephone Number of
Registrant's Principal Executive Offices)
---------------------------
Howard G. Anders, Executive Vice President
Hospitality Worldwide Services, Inc.
450 Park Avenue
Suite 2603
New York, New York 10022
(212) 223-0699
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(Name, Address, Including Zip Code, and Telephone Number
of Agent for Service)
Copy to:
Robert H. Friedman, Esq.
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
<PAGE>
---------------------------
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. /X/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Amount Proposed Maximum Proposed Maximum
Title of Shares to to be Aggregate Price Aggregate Amount of
be Registered Registered Per Share Offering Price Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, 2,984,796 $4.69(1) $13,998,693.00 $3,891.64
$.01 par value
====================================================================================================================================
</TABLE>
(1) Represents a weighted average maximum price per share based on (1) an
aggregate of 584,796 shares of Common Stock with respect to which shares of
Common Stock have been issued pursuant to a preferred stock conversion at a
conversion price of $3.42 per share, and (2) an aggregate of 2,400,000 shares of
Common Stock which, pursuant to Rule 457(h) under the Securities Act, the
offering price for the shares of Common Stock which may be issued pursuant to
preferred stock conversions is estimated solely for the purpose of determining
the registration fee and is based on $5.00, the per share average of high and
low sale prices of the Common Stock as reported by the American Stock Exchange
for trading on November 16, 1998.
--------------------
<PAGE>
We will amend and complete the information in this prospectus. Although we are
permitted by US federal securities laws to offer these securities using this
prospectus, we may not sell them or accept your offer to buy them until the
documentation filed with the SEC relating to these securities had been declared
effective by the SEC. This prospectus is not an offer to sell these securities
or our solicitation of your offer to buy these securities in any jurisdiction
where that would not be permitted or legal.
PROSPECTUS
SUBJECT TO COMPLETION, DATED NOVEMBER 23, 1998
2,984,796 SHARES OF COMMON STOCK
HOSPITALITY WORLDWIDE SERVICES, INC.
The selling shareholders listed in this Prospectus are offering and
selling up to 2,984,796 shares of common stock of Hospitality Worldwide
Services, Inc. We will not receive any of the proceeds from such sale.
Our common stock is listed on the American Stock Exchange under the
symbol "HWS." The last reported bid price for the common stock on November 20,
1998 was $5.00 per share.
The selling shareholders may offer their shares of common stock through
public or private transactions in the over-the-counter markets, on or off the
United States exchanges, at prevailing market prices or at privately negotiated
prices. The selling shareholders may engage brokers or dealers who may receive
commissions or discounts from the selling shareholders. Any broker-dealer
acquiring the common stock from the selling shareholders may sell such
securities in its normal market making activities, through other brokers on a
principal or agency basis, in negotiated transactions, to its customers or
through a combination of such methods. See "Plan of Distribution." We will bear
all expenses in connection with the preparation of this Prospectus.
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THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING AT PAGE 4.
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Neither the Securities and Exchange Commission nor any State securities
commission has determined whether this prospectus is truthful or complete. They
have not made, nor will they make, any determination as to whether anyone should
buy these securities. Any representation to the contrary is a criminal offense.
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The date of this Prospectus is , 1998.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document we file at the SEC's public reference room
located at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You
may obtain further information on the operation of the public reference room by
calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the
public over the Internet at the SEC's web site at http://www.sec.gov. You may
also request copies of such documents, upon payment of a duplicating fee, by
writing to the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Our Common
Stock is listed on the American Stock Exchange (the "AMEX") and such reports and
other information may also be inspected at the offices of the AMEX at 86 Trinity
Place, New York, New York 10006.
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION...........................................2
INCORPORATION BY REFERENCE....................................................3
ABOUT THIS PROSPECTUS.........................................................3
RISK FACTORS..................................................................4
ABOUT THE COMPANY............................................................10
USE OF PROCEEDS..............................................................11
SELLING SHAREHOLDERS.........................................................12
PLAN OF DISTRIBUTION.........................................................13
LEGAL MATTERS................................................................14
EXPERTS ....................................................................14
ADDITIONAL INFORMATION.......................................................15
<PAGE>
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference is
considered to be a part of this prospectus and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"):
(1) Our Annual Report on Form 10-K for the year ended December 31,
1997, as amended by Form 10-K/A filed on April 29, 1998 and
Form 10-K/A filed on September 15, 1998;
(2) Our Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1998, June 30, 1998 and September 30, 1998;
(3) Our Current Report on Form 8-K dated January 9, 1998, as
amended by Form 8-K/A filed on March 24, 1998, Form 8-K/A
filed on April 16, 1998 and Form 8-K/A filed on September 15,
1998;
(4) Our Application for Registration of our Common Stock on Form
8-A dated September 17, 1997
You may request a copy of these filings (excluding the exhibits to such
filings which we have not specifically incorporated by reference in such
filings) at no cost, by writing or telephoning us at the following address:
Hospitality Worldwide Services, Inc.
450 Park Avenue, Suite 2603
New York, New York 10022
ATTN: Chief Financial Officer
(212) 223-0699
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information provided or incorporated by
reference in this prospectus or any related supplement. We have not authorized
anyone else to provide you with different information. The selling shareholders
will not make an offer of these shares in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any other date than the date on the front of those
documents.
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<PAGE>
RISK FACTORS
THE PURCHASE OF OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND THE OTHER INFORMATION
IN THIS PROSPECTUS BEFORE DECIDING TO INVEST IN SUCH COMMON STOCK.
RECENT CHANGE OF BUSINESS FOCUS
Because our historical results of operations do not reflect combined
operations relating to our current lines of business for a significant period of
time, it is uncertain whether they will be our future results of operations. We
have recently integrated several businesses which represent a significant
departure from our original line of business (designing, manufacturing and
installing energy-efficient lighting fixtures for the hospitality industry). Our
management and other key personnel may lack the expertise necessary to manage
such a change in business focus. If our efforts are unsuccessful, our results of
operations could be materially adversely affected. The businesses that have been
integrated are (or in one case disposed of) as follows:
o In August 1995, we acquired AGF Interior Services, Inc. (doing
business as Hospitality Restoration and Builders) ("AGF"), a
provider of renovation services to the hospitality industry.
o In February 1996, we disposed of our lighting business (which
was our only operating business prior to the acquisition of
AGF).
o In January 1997, we acquired The Leonard Parker Company
("LPC") (as well as its subsidiary Parker Reorder Online,
Inc., f/k/a Parker Reorder Company ("Parker Reorder")), a
leading purchasing company for the hospitality industry.
o In May 1997, we entered into a joint venture with Apollo Real
Estate Advisors II, L.P. ("Apollo") and Watermark Investments
Limited LLC ("Watermark LLC") to identify, acquire, renovate,
refurnish and sell hotel properties (the "Apollo Joint
Venture").
o In January 1998, we acquired Bekins Distribution Services Co.,
Inc. ("BDS"), a leading provider of transportation,
warehousing and installation services.
o In February 1998, we acquired certain assets of Watermark
LLC's real estate advisory business.
o In March 1998, we entered into a joint venture (the "ING Joint
Venture") with ING Realty Properties to acquire and renovate
the O'Hare Clarion Quality Hotel in Chicago.
o In June 1998, we entered into a master development agreement
with Prime Hospitality Corp. ("Prime") to develop up to 20
hotel properties.
MANAGEMENT OF GROWTH
We have recently experienced rapid growth in the scope of our
operations. We expect that this growth will continue. Accordingly, we have hired
additional financial, human resources and sales and marketing personnel. This
growth has resulted in increased responsibilities for our management and may
place a strain on our operational, financial and other resources. We may not be
able to achieve or manage this growth effectively. If our efforts are
unsuccessful, our results of operations could be materially adversely affected.
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<PAGE>
HISTORY OF LOSSES
We posted a net loss of $843,649 for the fiscal year ended December 31,
1997. While we posted net income of $1,842,678 for the year ended December 31,
1996, we also posted a net loss of $1,115,969 for the year ended December 31,
1995. We cannot be certain that our operations will return to profitability or
that any positive cash flow generated by our operations will be sufficient to
meet our future cash and operational requirements.
COMPETITION
Servicing the hospitality industry is a highly competitive business.
Industry competition is based primarily on price and quality of service. The
anticipated competition for our various business sectors are as follows:
o Our renovation business primarily competes with small,
closely-held or family owned businesses.
o Our purchasing and reorder businesses compete with other
independent procurement companies, hotel purchasing companies
and food service distribution companies.
o With respect to our new proprietary software product ("Parker
FIRST"), we expect competition from a number of hotel
management companies, hotel companies, franchise operators and
other entities who are developing software systems that
attempt to provide on-line procurement services.
o Our distribution services business competes with freight
brokerage companies, warehouse divisions of major
transportation companies and moving and storage companies.
Some of our competitors (and potential competitors) possess
considerably greater financial, personnel, marketing and other resources than
us. We cannot be certain that we will be able to compete successfully.
RISK OF JOINT INVESTMENTS
The Apollo Joint Venture may be terminated either by us or by Apollo
anytime after May 2002. Apollo has complete discretion over the approval of and
the terms of each project. Each joint venture project will be governed by a
separate operating agreement. Each operating agreement will provide that Apollo
may request that each member provide additional capital to the operating
companies formed to purchase, renovate and sell hotel properties pursuant to the
Apollo Joint Venture. If we are unable to meet such capital request, our
interest in that project will be decreased by the amount which Apollo
contributes pursuant to such capital request. Also, if we pursue an opportunity
to acquire a hotel during the next five years, we will be required to first
present such an opportunity to Apollo.
In addition to Apollo's discretion over Apollo Joint Venture projects,
the operating companies formed for each project will be controlled by (1) Apollo
as the majority member in interest, and (2) Apollo and HWS Real Estate Advisory
Group, Inc., a real estate advisory company which is one of our wholly-owned
subsidiaries ("HWS REAG"), as managers. Our present and future joint venture
partners may develop economic, business or legal interests or goals that are
inconsistent with ours or
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<PAGE>
those of the joint venture. Also, should Apollo be unable to meet its economic
or other obligations to the Apollo Joint Venture, we could be required to
fulfill their obligations. The operating agreements will also impose certain
limitations on transferability of interests. For example, members holding a
majority of interest in the operating company will be able to compel any other
member to sell its interest upon a transfer of their interests by the majority
members. Due to the limitations on our discretion regarding the Apollo Joint
Venture, we cannot be certain that it will be successful for us.
The ING Joint Venture is the obligor under a loan agreement (the "Loan
Agreement") with Credit Suisse First Boston Mortgage Capital LLC ("Credit
Suisse"). Under the Loan Agreement, the ING Joint Venture borrowed approximately
$38,000,000 for the purpose of acquiring and renovating the Clarion Quality
Hotel property located at the O'Hare International Airport in Chicago. We hold a
18.0% equity interest in the ING Joint Venture. With respect to the Loan
Agreement, we agreed to (1) guaranty commencement and completion of the
renovation of the O'Hare Clarion according to the terms set forth in the Loan
Agreement (the "Guaranty of Completion"), (2) indemnify Credit Suisse against
losses which Credit Suisse may incur based upon potential environmental hazards
at the O'Hare Clarion (the "Environmental Indemnity") and (3) assign our equity
interest in the ING Joint Venture to Credit Suisse as security for the Guaranty
of Completion and the Environmental Indemnity. We cannot be certain that the ING
Joint Venture will be profitable for us.
RISKS ASSOCIATED WITH DEVELOPMENT OF PARKER FIRST
The growth of our reorder business depends primarily on the successful
introduction and subsequent market penetration of Parker FIRST. We completed
beta testing of Parker FIRST in March 1998. Parker FIRST is in the early stages
of commercialization. There are currently 136 hotles on line and an aggresive
sales effort is continuing. We cannot be certain that Parker FIRST will be
successfully implemented on our proposed timetable. Additionally, we cannot be
certain that Parker FIRST will be commercially successful if introduced.
Significant flaws in the software or delays in implementation could materially
adversely effect us. In addition, we cannot be certain that our competitors will
not develop software products that are substantially equivalent or superior to
Parker FIRST.
LIMITED INTELLECTUAL PROPERTY PROTECTION OF PARKER FIRST
We believe that the proprietary nature of Parker FIRST is critical to
its success. We cannot be certain that the steps we have taken to deter
misappropriation of its proprietary information will be adequate or that we will
be able to take appropriate steps to enforce our intellectual property rights in
this software. Additionally, the laws of many foreign countries do not protect
our intellectual property rights to the same extent as the laws of the United
States.
POSSIBLE HOTEL RENOVATION RISKS
We provide renovation services to our clients on a fixed price basis.
We are thus exposed to unanticipated construction costs and delays (which could
be based on the inability to obtain regulatory approvals, inclement weather,
fires, acts of nature and labor or material shortages). Should they materialize,
such unanticipated delays and expenses could affect our results of operations as
well as our reputation, and impair our ability to obtain additional renovation
work and could materially adversely effect us.
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<PAGE>
SPECIAL RISKS OF OWNING REAL ESTATE
We may hold interests in real property (either directly or indirectly
through one of our wholly-owned subsidiaries). Real property investments are
subject to special risks, including:
o Changes in the general economic climate;
o Local conditions (such as an over-supply of space or a
reduction in demand for space);
o Competition based on rental and room rates;
o Attractiveness and location of the properties;
o Financial condition of buyers and sellers of properties;
o Insurance and management services;
o Changes in operating costs;
o Government regulations (including those governing usage,
improvements, zoning and taxes);
o Interest rate levels;
o Availability of financing; and
o Potential liability under changing environmental and other
laws.
We cannot be certain that our interests in real property will be
profitable to us.
QUALIFIED LABOR MAY BE UNAVAILABLE
Providing renovation services is a significant part of our business.
Our ability to provide renovation services successfully depends primarily upon
our capability to hire local contractors and laborers in the areas where we
provide these services. We are dependent upon the availability of a local labor
force, which is affected by prevailing wages, weather and local economic
conditions. We cannot be certain that the supply or cost of labor will meet our
requirements.
Parker FIRST will require substantial technical support with respect to
its continued deployment and maintenance. We anticipate intense competition for
such technical support personnel from other entities. We cannot be certain that
we will be successful in hiring and/or retaining such key personnel.
SUPPLIER RELATIONSHIPS MAY BE TERMINATED
Our purchasing arrangements with suppliers of hospitality-related
products are terminable at will by either party. We cannot be certain that any
of our supplier relationships will not be terminated in the future. While we
have been able to obtain products on a timely basis in the past, we cannot be
certain that we will be unable to purchase sufficient products to meet our
clients' requirements. Any shortages or delays in obtaining these products could
materially adversely affect us.
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<PAGE>
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
A portion of our revenues is derived from international sales and our
business strategy involves expanding international operations. There are certain
risks inherent in conducting business internationally, such as:
o Unexpected changes in regulatory requirements;
o Export restrictions;
o Tariff and other trade barriers;
o Different employment laws and practices in foreign countries;
o Political instability;
o Exposure to currency fluctuations;
o Exchange rates;
o Imposition of currency exchange controls;
o Potentially adverse tax consequences; and
o Country-specific product requirements.
We cannot be certain that one or more of these factors will not
materially adversely effect our international operations.
OUR SHARE PRICE MAY DECLINE DUE TO SHARES ELIGIBLE FOR FUTURE SALE
As of October 28, 1998, we had 12,698,652 shares of Common Stock issued
and outstanding. Of these shares, a total of 8,814,246 shares of Common Stock
are freely tradable without restriction or registration under the Securities Act
by persons other than our "affiliates," as such term is defined in the
Securities Act. Such affiliates would be required to sell pursuant to Rule 144
under the Securities Act ("Rule 144"). The remaining 3,299,610 shares of Common
Stock outstanding upon completion of this Offering are "restricted" securities
as that term is defined by Rule 144 (the "Restricted Shares"). Of the Restricted
Shares (1) 3,272,110 shares have been registered for resale pursuant to
effective registration statements filed with the SEC, and (2) 27,500 shares are
subject to resale pursuant to Rule 144. Under Rule 144, a person who has held
restricted securities for a period of one year may sell a limited number of such
securities into the public market without registration of such securities under
the Securities Act. Rule 144 also permits, under certain circumstances, persons
who are not affiliated with us to sell their restricted securities without
quantity limitations once they have satisfied Rule 144's two-year holding
period. Sales made pursuant to Rule 144 by our existing shareholders may have a
depressive effect on the price of the Common Stock in the public market. Such
sales could also adversely affect our ability to raise capital through the sale
of our equity securities.
As of the date of this Prospectus, 2,895,639 shares of Common Stock
have been reserved for issuance upon exercise of outstanding options and
warrants. Of these shares reserved for issuance, 2,038,916 may be transferred
pursuant to effective registration statements filed with the SEC.
CERTAIN ANTI-TAKEOVER CHARTER PROVISIONS
Our Certificate of Incorporation and By-Laws were recently amended to
create a "staggered" Board of Directors. The Board of Directors was "staggered"
by dividing the directors into three classes (each, as nearly as possible, to
consist of one-third of the members of the Board). Initially, the
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<PAGE>
Class I directors will serve for a term of one year, the Class II directors for
a term of two years and the Class III directors for a term of three years. As
each Class' term expires, successor directors are elected for terms of three
years. The result of this "staggering" is that one-third of our Board of
Directors is elected each year. The effect of this classification of directors
is that it will be more difficult for shareholders to change the composition of
our Board of Directors. As a result, at least two annual meetings of
shareholders may be required for the shareholders to change a majority of the
directors, regardless of whether a change in our Board of Directors would be
beneficial to us or our shareholders.
Our Certificate of Incorporation also authorizes our Board of Directors
to issue up to 5,000,000 shares of preferred stock (the "Preferred Stock"). We
may issue the Preferred Stock in one or more series, the terms of such Preferred
Stock will be determined when we issue it by our Board of Directors, without
further action by shareholders. Although we currently have no plans for the
issuance of additional shares of Preferred Stock, we cannot be certain that we
will not do so in the future.
In addition, our Certificate of Incorporation and By-Laws contain
provisions, and our Board of Directors has adopted a "poison pill" shareholder
rights plan, that will prevent or impede the removal of directors and may
discourage a third party from making a proposal to acquire us. These provisions
may discourage transactions involving actual or potential changes of control,
including transactions that otherwise could involve payment of a premium over
the market value to our shareholders.
EITHER OUR COMMON STOCK OR OUR INTEREST IN PARKER REORDER MAY BE DILUTED
At any time between January 10, 1998 and January 10, 2000, the holders
of an aggregate of 120,000 shares of Preferred Stock issued as partial
consideration for our acquisition of LPC (the "LPC Preferred") have the right to
convert their shares of LPC Preferred into either (1) an aggregate of 600,000
shares of Common Stock (subject to an upward adjustment to a maximum of
2,400,000 shares, which adjustment is triggered when the market price of the
Common Stock is below $5.00 at the time of conversion), or (2) a 5.88% equity
interest in Parker Reorder Online, Inc., f/k/a Parker Reorder. Should the LPC
Preferred holders exercise their option to convert the LPC Preferred into shares
of Common Stock, our existing Common Stock holders will experience dilution.
Should the LPC Preferred holders exercise their option to convert the LPC
Preferred into a 5.88% equity interest in Parker Reorder, our equity ownership
in Parker Reorder will be so reduced. Additionally, as long as the LPC Preferred
is outstanding, the holders also have the right to receive 12% of the cumulative
net profits of Parker Reorder, measured from January 1, 1997.
In addition, the BDS purchase agreement contains a "make-whole"
adjustment provision. Pursuant to a formula, we will have to issue additional
shares of our Common Stock to the former BDS shareholders if the average closing
price of our Common Stock for the 20 trading days prior to the one year
anniversary of the BDS acquisition (January 9, 1999) is less than 85% of our
share price on the date of the BDS acquisition. The closing share price on the
date of the BDS acquisition was $12.25. For example, if the average closing
price of our Common Stock for the 20 trading days prior to January 9, 1999 is
$6.50, we will have to issue approximately 288,000 additional shares to the
former BDS shareholders. We may seek to satisfy our obligations under the make
whole adjustment provision through a cash payment.
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<PAGE>
NO DIVIDENDS
We have never paid dividends on our Common Stock. We do not intend to
pay any dividends on our Common Stock in the foreseeable future. Pursuant to the
terms of the LPC Preferred, we cannot pay or declare dividends on any capital
stock other than the LPC Preferred, so long as the LPC Preferred is outstanding,
unless (1) all accrued and unpaid dividends on the LPC Preferred for all prior
applicable periods have been declared and paid, and (2) the dividends on the LPC
Preferred Stock for the current and applicable period has been declared and set
apart for payment. We are not otherwise restricted from declaring and paying
dividends to our shareholders.
ABOUT THE COMPANY
We were formed under the laws of the State of New York in October 1991.
In January 1994, we consummated an initial public offering of our common stock.
At such time, our principal line of business was the designing and marketing of
decorative, energy efficient lighting fixtures for the hotel and hospitality
industry. Our primary marketing tool was the utilization of Con Edison's
Applepower Rebate Program (the "Rebate Program"), where Con Edison offered
rebates to those who used energy saving devices, such as our lighting fixtures.
In 1994, Con Edison substantially reduced the Rebate Program, making it less
advantageous for us to use it as a marketing tool. As a result, our revenues
were substantially reduced.
In August 1995, we acquired substantially all of the assets and
business of (and assumed certain liabilities of) AGF, a company that provided
renovation services to the hospitality industry through its wholly-owned
subsidiary, Hospitality Restoration & Builders, Inc. ("HRB"). In December 1995,
our Board of Directors determined to dispose of our lighting business (in
response to Con Edison's decision to reduce the Rebate Program) and concentrate
our efforts on renovation services. In February 1996, we entered into a
Divestiture, Settlement and Reorganization Agreement (the "Divestiture
Agreement") with AGF, Tova Schwartz (our former President and Chief Executive
Officer) and certain other parties. Among other things, pursuant to the
Divestiture Agreement we sold our lighting business to Ms. Schwartz and Ms.
Schwartz resigned from her positions as a director and officer of both our
Company and HRB. In October 1996, we changed our name from Light Savers, U.S.A.,
Inc. to Hospitality Worldwide Services, Inc. The name better reflects the nature
of our business in view of the significant change in the character and strategic
focus resulting from our acquisition of AGF and the disposal of our lighting
business.
Until January 1997, our only line of business was providing a complete
package of renovation resources to the hospitality industry through HRB (ranging
from pre-planning and scope preparation of a project to performing the
renovation requirements and delivering furnished rooms). HRB offers hospitality
maintenance services to hotels and hotel chains throughout the continental
United States. For over 18 years our renovation division has provided renovation
and improvements such as vinyl, paint, wallpaper, carpet, installation of new
furniture, light carpentry, and masonry work. HRB generally provides its
renovation services in an on time, on budget manner, while causing little or no
disruption to the ongoing operation of a hotel. HRB has successfully responded
to the hotel industry's efforts to increase occupancy, room rates and market
share through cosmetic upgrades, which are generally required every four to
seven years.
In January 1997, we completed the acquisition of LPC and its
subsidiary, Parker Reorder. Founded in 1969, LPC is a leading purchasing company
for the hospitality industry. LPC acts as an
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agent or principal for the purchase of goods and services for its customers,
which include major hotel and management companies worldwide. LPC purchases
furniture, fixtures and equipment, kitchen supplies, linens and uniforms,
guestroom amenities, and other supplies to meet its customers' requirements for
new hotel openings and major renovations. LPC annually purchases approximately
$250 million of goods and services for its customers. Parker Reorder has
developed and is marketing a new proprietary software product, Parker FIRST,
which allows clients to reorder operating supplies and equipment ("OS & E") and
other products on-line. Parker FIRST will also provide such clients with access
to forecasting and product evaluation capabilities. Parker Reorder offers hotel
properties the ability to order any and all OS & E products on an as needed
basis.
In May 1997, we entered into the Apollo Joint Venture to identify,
acquire, renovate, refurbish and sell hotel properties. We will perform all of
the renovation and procurement services for each of the properties purchased by
the Apollo Joint Venture. In addition, we will receive a five percent equity
interest in each of the entities formed to purchase such properties in exchange
for our contribution of five percent of the total equity required to acquire,
renovate and sell such properties. The Apollo Joint Venture intends to own and
operate the properties only for the time necessary to upgrade and market them
for resale. The Apollo Joint Venture has acquired the Warwick Hotel in
Philadelphia, Pennsylvania and the Historic Inn in Richmond, Virginia. We will
fully renovate and refurbish these properties pursuant to a contract with the
Apollo Joint Venture operating entity.
On January 9, 1998, we completed the acquisition of BDS, a leading
provider of transportation, warehousing and installation services to a variety
of customers worldwide. Founded in 1969, BDS is a logistical services company
that serves clients who are opening, renovating or relocating facilities by
assuring that materials, fixtures, furniture and merchandise are moved from
multiple vendor locations to their ultimate destinations in a controlled orderly
sequence so that each item can be installed on schedule. BDS is based in St.
Louis, Missouri.
On February 9, 1998, through our wholly-owned subsidiary HWS REAG, we
purchased the assets of Watermark LLC's real estate advisory business. Watermark
LLC is an international management company that is the general partner and
manages Watertone Holdings LP, a shareholder of the Company.
On March 6, 1998, we entered into the ING Joint Venture to acquire and
renovate the Clarion Quality Hotel in Chicago, Illinois. The renovation has
commenced and we estimate completion of the renovation in the spring of 1999.
On June 5, 1998, we entered into a master development agreement with
Prime to develop hotel properties under the AmeriSuites brand name over a
two-year period. Under the agreement, we will provide the site identification,
development, construction and purchasing services required for each project and
Prime will provide project design and management and franchise services once
each property is complete. We will each have a 50% interest in the new hotels.
However, with the change in capital markets, we have decided to reassess our
commitment to the Prime venture. We are exploring the possibility of
significantly scaling back the scope of our relationship with Prime. This may
include discussions with other joint venture partners and other potential
franchisees. Our commitment to date is immaterial to our overall operations.
-11-
<PAGE>
USE OF PROCEEDS
The shares of Common Stock offered hereby are being registered for the
account of the selling shareholders identified in this Prospectus. See "Selling
Shareholders." All net proceeds from the sale of the Common Stock will go to the
shareholders who offer and sell their shares. Accordingly, we will not receive
any part of the proceeds from such sales of Common Stock.
SELLING SHAREHOLDERS
The selling shareholders have informed us that the name, address,
maximum number of shares of Common Stock to be sold and total number of shares
of Common Stock which each selling shareholder owns are as set forth in the
following table. The selling shareholders may sell all or part of their shares
of Common Stock registered pursuant to this Prospectus.
<TABLE>
<CAPTION>
Number Shares
of Common
Stock/Per-
Maximum centage of Class
Number of Shares of Number of to be Owned
Common Stock Shares to be After
Beneficially Owned Offered for Completion of
Name and Address(1) Prior to Offering Resale the Offering
- -------------------------------------------- ---------------------------- -------------- -------------------
<S> <C> <C> <C>
Douglas A. Parker 447,398 292,398 155,000/1.2%
c/o The Leonard Parker Company
550 Biltmore Way
Coral Gables, Florida 33134
Philip Parker 447,398 292,398 155,000/1.2%
c/o The Leonard Parker Company
550 Biltmore Way
Coral Gables, Florida 33134
Bradley Parker 854,300(2) 800,000 54,300/*
c/o The Leonard Parker Company
550 Biltmore Way
Coral Gables, Florida 33134
Mitchell Parker 945,000(2) 800,000 145,000/1.1%
c/o The Leonard Parker Company
550 Biltmore Way
Coral Gables, Florida 33134
Gregg Parker 955,000(2) 800,000 155,000/1.1%
c/o The Leonard Parker Company
550 Biltmore Way
Coral Gables, Florida 33134
</TABLE>
- ----------------------
* Less than 1%
-12-
<PAGE>
(1) The persons named in the table, to our knowledge, have sole voting and
investment power with respect to all shares shown as beneficially owned
by them, subject to community property laws where applicable and the
footnotes to this table. The calculation of shares of Common Stock
beneficially owned was determined in accordance with Rule 13-3(d) of
the Exchange Act.
(2) Includes an aggregate of 800,000 shares of Common Stock which
represents the maximum number of shares of Common Stock issuable upon
conversion of the LPC Preferred.
PLAN OF DISTRIBUTION
This offering is self-underwritten; neither we nor the Selling
Shareholders have employed an underwriter for the sale of Common Stock by the
Selling Shareholders. We will bear all expenses in connection with the
preparation of this Prospectus. The Selling Shareholders will bear all expenses
associated with the sale of the Common Stock.
The selling shareholders may offer their shares of common stock
directly or through pledgees, donees, transferees or other successors in
interest in one or more of the following transactions:
o On any stock exchange on which the shares of Common Stock may
be listed at the time of sale;
o In negotiated transactions;
o In the over-the-counter market; or
o In a combination of any of the above transactions.
The selling shareholders may offer their shares of Common Stock at any
of the following prices:
o Fixed prices which may be changed;
o Market prices prevailing at the time of sale;
o Prices related to such prevailing market prices; or
o At negotiated prices
The Selling Shareholders may effect such transactions by selling shares
to or through broker-dealers, and all such broker-dealers may receive
compensation in the form of discounts, concessions, or commissions from the
Selling Shareholders and/or the purchasers of shares of Common Stock for whom
such broker-dealers may act as agents or to whom they sell as principals, or
both (which compensation as to a particular broker-dealer might be in excess of
customary commissions).
Any broker-dealer acquiring Common Stock from the Selling Shareholders
may sell the shares either directly, in its normal market-making activities,
through or to other brokers on a principal or agency basis or to its customers.
Any such sales may be at prices then prevailing on the AMEX or at prices related
to such prevailing market prices or at negotiated prices to its customers or a
combination of such methods. The Selling Shareholders and any broker-dealers
that act in connection with the sale of the Common Stock hereunder might be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act; any commissions received by them and any profit on the resale of
shares as principal might be deemed to be underwriting discounts and commissions
under the Securities Act.
-13-
<PAGE>
Any such commissions, as well as other expenses incurred by the Selling
Shareholders and applicable transfer taxes, are payable by the Selling
Shareholders.
The selling shareholders reserve the right to accept, and together with
any agent of the selling shareholder, to reject in whole or in part any proposed
purchase of the shares of Common Stock. The selling shareholders will pay any
sales commissions or other seller's compensation applicable to such
transactions.
We have not registered or qualified offers and sales of shares of the
Common Stock under the laws of any country, other than the United States. To
comply with certain states' securities laws, if applicable, the selling
shareholders will offer and sell their shares of Common Stock in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the selling shareholders may not offer or sell
shares of Common Stock unless we have registered or qualified such shares for
sale in such states or we have complied with an available exemption from
registration or qualification.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of shares of the Common Stock may not
simultaneously engage in market making activities with respect to such shares of
common stock for a period of two to nine business days prior to the commencement
of such distribution. In addition, the selling shareholders and any other person
participating in a distribution will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation, Rules 10b-2, 10b-6 and 10b-7. Such provisions may limit the timing
of purchases and sales of any of the shares of Common Stock by the selling
shareholders or any such other person. This may affect the marketability of the
Common Stock and the brokers' and dealers' ability to engage in market making
activities with respect to the Common Stock.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the shares of
Common Stock offered hereby have been passed upon for the Company by Olshan
Grundman Frome & Rosenzweig LLP, 505 Park Avenue, New York, New York 10022.
EXPERTS
The consolidated financial statements of Hospitality Worldwide Services, Inc.
and Subsidiaries appearing in our Annual Report on Form 10-K, as amended, for
the year ended December 31, 1997 have been audited by Arthur Andersen LLP,
independent public accountants, as set forth in their report thereon included
therein and incorporated herein by reference. Such financial statements are, and
audited financial statements to be included in subsequently filed documents will
be, incorporated herein in reliance upon the reports of Arthur Andersen LLP
pertaining to such financial statements (to the extent covered by consents filed
with the Securities and Exchange Commission) given upon the authority of such
firm as experts in accounting and auditing. The consolidated financial
statements of Hospitality Worldwide Services, Inc. and Subsidiary appearing in
our Annual Report on Form 10- KSB, as amended, for the year ended December 31,
1996 have been audited by BDO Seidman, LLP, independent certified public
accountants, as set forth in their report thereon included therein and
-14-
<PAGE>
incorporated herein by reference. Such financial statements are, and audited
financial statements to be included in subsequently filed documents will be,
incorporated herein in reliance upon the reports of BDO Seidman, LLP pertaining
to such financial statements (to the extent covered by consents filed with the
SEC) given upon the authority of such firm as experts in accounting and
auditing.
ADDITIONAL INFORMATION
We have filed with the Commission a Registration Statement on Form S-3
under the Securities Act with respect to the Shares offered hereby. For further
information with respect to the Company and the securities offered hereby,
reference is made to the Registration Statement. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference.
-15-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, all of which will be paid by the Registrant, are as
follows:
SEC Registration Fee......................................... $3,891.64
Accounting Fees and Expenses................................. 5,000.00
Legal Fees and Expenses...................................... 5,000.00
Blue Sky Fees and Expenses................................... 0.00
Miscellaneous Expenses....................................... 0.00
----------
Total........................................................ $13,891.64
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article "3" of the Company's Certificate of Incorporation contains the
following provision with respect to limiting the liability of Directors:
"3. The personal liability of the directors of the corporation
is hereby eliminated to the fullest extent permitted by the provisions
of paragraph (b) of Section 402 of the Business Corporation Law of the
State of New York, as the same may be amended and supplemented. Any
repeal or modification of this Article by the shareholders of the
Company shall not adversely affect any right or protection of a
director of the Company existing hereunder with respect to any act or
omission occurring prior to such repeal or modification."
Section 721 through 726 inclusive of the New York Business Corporation
Law (the "New York BCL") also contain provisions relating to the indemnification
of officers and directors. The New York BCL provides that a corporation may (but
is not required to) indemnify a director or officer against judgments, fines,
amounts paid in settlement and reasonable expenses of litigation (other than in
an action brought by the corporation against such person or by shareholders
against such person on behalf of the corporation), even if the director or
officer is not successful on the merits, if he acted in good faith and for a
purpose he reasonably believed to be in (or not opposed to) the best interests
of the corporation (and, criminal actions or proceedings, had no reason to
believe his conduct was unlawful). In addition, a corporation may (but is not
required to) indemnify a director or officer against amounts paid in settlement
and reasonable expenses of an action brought against him by the corporation or
by shareholders on behalf of the corporation, even if he is not successful on
the merits, if he acted in good faith and for a purpose he reasonably believed
to be in (or not opposed to) the best interests of the corporation. However, no
indemnification is permitted in an action by the corporation, or shareholders on
behalf of the corporation, in connection with the settlement or other
disposition of a threatened or pending action or in connection with any claim,
issue or matter as to which a director or officer is adjudged to be liable to
the corporation, unless a court determines that, in view of all of the
circumstances, he is entitled to indemnity for such portion of the settlement
amount and expenses as the court deems proper. In addition, the New York BCL
provides that a director or officer shall be indemnified if such person is
successful in the litigation on the merits or otherwise.
Permitted indemnification as described above may only be made if it is
authorized by the Board of Directors, in each specific case, based upon a
determination that the applicable standard of
II-1
<PAGE>
conduct has been met or that indemnification is proper under New York BCL
Section 721. Such authorization is made by the Board of Directors, either acting
as a quorum of disinterested directors or based upon an opinion by independent
legal counsel or the shareholders that indemnification is proper because the
applicable standard of conduct has been met. Upon application of the person
seeking indemnification, a court may also award indemnification upon a
determination that the standards outlined above have been met. A corporation's
board of directors may also authorize the advancement of litigation expenses to
a director or officer upon receipt of an undertaking by him to repay such
expenses, if it is ultimately determined that he is not entitled to be
indemnified for them.
ITEM 16. EXHIBITS.
EXHIBIT INDEX
EXHIBIT
5 Opinion of Olshan Grundman Frome & Rosenzweig LLP with respect
to the securities registered hereunder.
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of BDO Seidman, LLP.
23(c) Consent of Olshan Grundman Frome & Rosenzweig LLP (included
within Exhibit 5).
24(a) Powers of Attorney (included on the Signature page of this
Registration Statement).
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
a) To file, during any period in which offers or
sales are being made, a post-effective amendment to this registration statement
to include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
c) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange act of
II-2
<PAGE>
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against each such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and authorizes this Registration
Statement to be signed on its behalf by the undersigned, the City of New York,
State of New York, on the 6th day of November, 1998.
HOSPITALITY WORLDWIDE SERVICES, INC.
(Registrant)
By: /S/ ROBERT A. BERMAN
--------------------------------------
Robert A. Berman, President, Chief
Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Robert A. Berman and Howard G.
Anders his true and lawful attorneys-in-fact and agent, with full power of
substitution and resubstitution, for and in his or her name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
/S/ ROBERT A. BERMAN Chairman of the Board and Chief November 6, 1998
- ------------------------ Executive Officer (principal
Robert A. Berman executive officer)
/S/ LEONARD F. PARKER Chairman of the Board and November 6, 1998
- ------------------------ Director
Leonard F. Parker
/S/ HOWARD G. ANDERS Executive Vice President, November 6, 1998
- ------------------------ Chief Financial Officer
Howard G. Anders (principal financial officer
and principal accounting officer)
and Secretary
/S/ DOUGLAS PARKER President and Chief Operating November 6, 1998
- ------------------------ Officer
Douglas Parker
/S/ LOUIS K. ADLER Director November 6, 1998
- ------------------------
Louis K. Adler
/S/ GEORGE ASCH Director November 6, 1998
- ------------------------
George Asch
/S/ RICHARD A. BARTLETT Director November 6, 1998
- ------------------------
Richard A. Bartlett
/S/ SCOTT KANIEWSKI Director November 6, 1998
- ------------------------
Scott Kaniewski
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT
5 Opinion of Olshan Grundman Frome & Rosenzweig LLP with respect
to the securities registered hereunder.
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of BDO Seidman, LLP.
23(c) Consent of Olshan Grundman Frome & Rosenzweig LLP (included
within Exhibit 5).
24(a) Powers of Attorney (included on the Signature page to the
Registration Statement).
II-5
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
November 23, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Hospitality Worldwide Services, Inc.
Registration Statement On Form S-3
-------------------------------------
Gentlemen:
Reference is made to the Registration Statement on Form S-3
dated the date hereof (the "Registration Statement"), filed with the Securities
and Exchange Commission by Hospitality Worldwide Services, Inc., a New York
corporation (the "Company"). The Registration Statement relates to an aggregate
of 2,984,796 shares of Common Stock, $.01 par value, of the Company (the
"Shares"). Of the Shares, (i) 584,796 were issued by the Company in connection
with the conversion of outstanding shares of Redeemable Convertible Preferred
Stock, and (ii) 2,400,000 are reserved for issuance by the Company and are
issuable upon conversion of outstanding shares of Redeemable Convertible
Preferred Stock.
We advise you that we have examined originals or copies
certified or otherwise identified to our satisfaction of the Certificate of
Incorporation and By-laws of the Company, minutes of meetings of the Board of
Directors and shareholders of the Company, and such other documents, instruments
and certificates of officers and representatives of the Company and public
officials, and we have made such examination of the law, as we have deemed
appropriate as the basis for the opinion hereinafter expressed. In making such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, and the conformity to original
documents of documents submitted to us as certified or photostatic copies.
<PAGE>
Securities and Exchange Commission
November 23, 1998
Page -2-
Based upon the foregoing, we are of the opinion that the
Shares have been, or when issued will be, duly and validly issued, and are, or
will be, fully paid and non-assessable.
We are members of the Bar of the State of New York and we
express no opinion as to the laws of any jurisdiction other than the laws of the
State of New York and the federal laws of the United States of America.
We consent to the reference to this firm under the caption
"Legal Matters" in the Prospectus.
Very truly yours,
/s/ Olshan Grundman Frome & Rosenzweig LLP
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of our report dated March
30, 1998 included in Hospitality Worldwide Services,, Inc.'s Form 10-K for the
year ended December 31, 1997 and to all references to our Firm included in this
Registration Statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
New York, New York
November 16, 1998
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Hospitality Worldwide Services, Inc.
New York, New York
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of Hospitality Worldwide
Services, Inc. on Form S-3 of our report dated March 21, 1997, relating to the
consolidated financial statements of Hospitatlity Worldwide Services, Inc. and
subsidiary appearing in the Annual Report on Form 10-K of Hospitality Worldwide
Services, Icn. for the year ended December 31, 1997.
We also consent to the reference to us under the captiaon "Experts" in the
Prospectus.
/s/ BDO Seidman, LLP
BDO Seidman, LLP
New York, New York
November 16, 1998
