I always loved the Waldorf=Astoria, for some reason and I think I will always will.
It brings back so many memories and histories, from Roosevelt, to JFK, to Monroe or to Eddy Murphy in Coming to America.
And like with things you are attached to, you hate seeing them change. But this time, it might be for the better, if done properly.
As a reminder, the Waldorf=Astoria was acquired in 2014 by Anbang, a Chinese holding company with activities in insurance, banking and financial services. The purchase from The Blackstone Group was close to US$2 billion (US$1.95 billion).
Recently, In March 2016, Blackstone agreed to a further US$6.5 billion sale of 16 landmark US hotels owned by the Strategic Hotels & ResortsREIT, including the historic Hotel del Coronado near San Diego, the Westin St. Francis in San Francisco, several Four Seasons resorts, and Manhattan’s JW Marriott Essex House hotel.
This reveals the continued appetite that Chinese investors have for hospitality assets in the US market and the continued interest in landmark buildings.
One of the particularity of the Waldorf=Astoria deal is that:
Hilton was engaged in providing management services for Anbang over the next 100 years.
Two years after the purchase it seems like Anbang is reconsidering the hotel play and looking to take advantage of the high-end residential market in NYC. Anbang announced that they will be converting most of the Towers rooms (about 1,100) into luxury condos and leaving 300 to 500 rooms as part of a smaller luxury hotel portion, still operated by Hilton Worldwide.
To turn such an iconic building in a partial residential luxury condo certainly makes sense as developers have always liked the hotel-condo combination:
- lower floors units can remain hotel rooms as their resale value is not premium,
- higher units can be converted into condo units and reach a higher resale value,
- condo owners get tons of amenities from the hotel portion of the building such as restaurants, bars and spas all the way to room and maid service on demand,
“To achieve the high value-creation, we plan to renovate the two towers into luxury residential apartments with world-class amenities and finishes,” the firm’s chairman Wu Xiaohui said in a speech. “At the same time, we will build the hotel section into a super five-star hotel, delivering unparalleled customer experience.”
One question remains, though.
Will a billion dollar renovation be enough to maintain the Waldorf=Astoria name and carry on amongst fierce competition?
Innovative approaches to hospitality like the ones fronted by Virgin Hotels or Ace Hotels are on top of the news.
Only time will tell and the most difficult challenge of all might be to last in time and defy trends.