What’s got a double hyphen in its name to represent Peacock Alley, Cole Porter’s own Steinway piano, a famous salad named after it and a price tag of $1.4 million per room with a “SOLD” sign on it?
This is being called the most expensive hotel purchase to date.
Reach into the bedside drawer of a Hilton hotel and chances are you’ll find a paperback copy of the autobiography “Be My Guest,” written in 1957 by Conrad Hilton and well worth a read. If ever a mantra were truer, it’s that clichéd one about the three most important real estate rules frequently attributed to Hilton: “Location, location, location.” And then, there’s timing, timing, timing.
On the eve of the opening of the current Park Avenue Waldorf=Astoria in 1931, President Herbert Hoover offered his congratulations in a live radio broadcast from the White House. Thereafter, the hotel towers have served as a temporary home to every sitting U.S. president as well as to queens, emperors, celebrities, billionaires and a pope. Grand Central Terminal has its own platform and underground tunnel connection to an elevator big enough for FDR’s modified presidential limo.
Of course, the landmark hotel was a permanent home to others; Cole Porter, Gen. Douglas MacArthur, Frank Sinatra, Dwight D. Eisenhower. It was a lifelong dream of Hilton’s to acquire the property he dubbed “the greatest of them all.” That he did in 1949 by purchasing the management rights, and in 1972, the bricks and mortar, too.
A $1.95 billion sale to Anbang Insurance Group Co Ltd of China was announced on Oct. 6, 2014. At just under $1.4 million per room and with a 100-year management contract to Hilton, this hotel deal is certainly the greatest of them all.
Perhaps not so mapcap as it seems at first glance? In an article by Reuters, a calculation based on full occupancy at the Waldorf’s lowest room rate of $329, Anbang would recover its investment in about 10 years. While we know occupancy won’t run 100 percent, we also know that $329 is not today’s nor tomorrow’s ADR. The presidential suite runs more than $10,000 nightly and there are two dozen more suites in the Waldorf=Astoria Towers.
While the news sinks in, no one is talking about the air rights quite yet. Watch the space above our heads for the next revenue frontier, as there will surely be more chapters written in the Park Avenue holy wars of St. Bartholomew’s and the Waldorf=Astoria.
Laurie Jo Miller Farr is a regular Coyle contributor. Following a decade with NYC’s tourism board, her London-based regional marketing roles included Hilton, CIGA and Exclusive Hotels by Forte. Currently based in San Francisco, her work is seen online at USA Today, CBS, Yahoo, AXS, Bay City Guide and Visit Britain.
From Park Avenue to the Pacific Rim, Coyle Hospitality Group provides unparalleled consulting services to the global hospitality industry as a a market leader in designing and implementing programs for mystery shopping, quality benchmarking, brand compliance, and market research.