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Of the five pieces of Canadian Pacific being spun off, Fairmont Hotels & Resorts has a lock on the glamour market.

PanCanadian Petroleum and Canadian Pacific Railway account for the lion's share of Calgary-based CP's assets, with roughly 38 per cent each, while Fairmont and CP Ships make up 10 per cent apiece, and Fording takes up 4 per cent.

When it comes to the chat factor, however, Fairmont beats the oil patch, railways, shipping and coal combined as a topic of wistful conversation for the cocktail crowd. Who wants to talk about a lump of coal or global container shipping when you could be dreaming about world travels through the Fairmont chain?

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As a long-term investment, Fairmont may prove to be as attractive as the marquee stocks: CPR and the newly named PanCanadian Energy.

Toronto-based Fairmont owns 67 per cent of an entity called Fairmont Hotels Inc., which manages upper-end resorts such as Chateau Whistler in British Columbia and historic Alberta holdings such as the Banff Springs, Chateau Lake Louise and Jasper Park Lodge.

The other owners of Fairmont Hotels are a Los Angeles-based investment group named Maritz Wolff & Co., and Kingdom Hotels (USA), which is the investment firm of Saudi Prince Waleed bin Talal. They each hold a 16.5-per-cent stake.

The parent Fairmont also wholly owns Delta Hotels, a Canadian hotel and resort management firm, and has a 34-per-cent interest in Legacy Real Estate Investment Trust. Legacy's Fairmont-branded properties include the Empress in Victoria, Hotel Vancouver, Palliser in Calgary, Royal York in Toronto, Château Laurier in Ottawa, Queen Elizabeth in Montreal and Château Frontenac in Quebec City.

During times of rapid economic expansion, the hotel business prospers, including those under the Fairmont umbrella. The problem for the new stock is that with the North American economic slowdown, that's bound to make investors jittery.

Michael O'Rourke, real estate and leisure analyst at Scotia Capital in Toronto, figures the slowdown could create buying opportunities for Fairmont. That means it would capitalize on the downturn and be well positioned for an economic recovery.

Amid the tech wreck, there has been a "flight to real assets," says Mr. O'Rourke, who's impressed by Fairmont's healthy balance sheet of 77 owned or managed hotels and resorts.

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CP shareholders will receive 25 Fairmont shares for every 100 CP shares they own. Fairmont will trade under the ticker symbol FHR on the Toronto Stock Exchange and New York Stock Exchange.

Fairmont hopes to grow through internal expansion and external acquisitions. For instance, it's looking at potential residential development at its Royal Pavilion resort in Barbados and Scottsdale Princess in Arizona. On the acquisition side, it's concentrating on the United States, where it's in just 10 of 25 top markets, but is also open to investments abroad. Fairmont's portfolio already includes properties in Mexico and the Caribbean.

Even though the Fairmont brand dates back to 1907 and is well known in the United States, the name is new in Canada. CP added management of the U.S. Fairmont luxury chain to its holdings in 1999.

Notable among the U.S. properties is the 94-year-old Fairmont San Francisco, which has played host to numerous world dignitaries and U.S. presidents over the decades.

Canadian landmarks such as the Banff Springs are still best known by their own names. Fairmont Banff Springs doesn't roll off the tongue yet, even after the rebranding campaigns of 1999 and last year of CP Hotels.

David O'Brien, who will be stepping down as CP's chairman, president and chief executive officer, will serve as a Fairmont director and also stick around as chairman of PanCanadian, which is currently 85 per cent owned by CP.

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Other Fairmont directors include Fairmont CEO William Fatt, former Four Seasons Hotel president John Sharpe, former Canadian Tire CEO Stephen Bachand and new CBC chairwoman Carole Taylor. Former Sun Life chairman and CEO John McNeil will serve as Fairmont's chairman.

Hotels are very much about ambience, people and service, but ultimately, it's a number's game for the managers.

First-half revenue at Fairmont's ownership operations rose 16.6 per cent to $267-million, but revenue from Canadian hotels and resorts slipped $1-million because of lousy ski conditions in the Rockies and general economic malaise in the second quarter.

Revenue in the first six months of this year improved slightly at managed hotels under the Fairmont and Delta labels.

As the North American economy wheezes, Fairmont's growth strategy should mitigate the damage to its hotel and resort holdings.

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