Early last year, Chinese insurance company Anbang purchased the Waldorf Astoria New York for $1.95 billion, which was the highest amount ever paid for a US hotel. The Waldorf Astoria New York was once iconic, though perhaps nowadays can best be described as past its prime. I think it goes without saying that Anbang paid for the location and land as such, rather than specifically for the hotel.
Keep in mind that Anbang is the same company which was vying to buy Starwood, though pulled out at the last minute, meaning the takeover by Marriott continued.
Now it’s interesting to learn the changes the Waldorf Astoria New York is undergoing while under Anbang’s ownership.
Per Bloomberg, the 1,400+ room Waldorf Astoria New York will be closing in Spring 2017, as Anbang will convert a majority of the rooms into luxury condominiums.
In a few years the building will reopen, with a much smaller hotel, likely consisting of 300-500 hotel rooms. The exact plans haven’t yet been revealed, though overall this seems like a smart decision.
It’s tough to operate a luxury hotel with 1,400+ rooms, and for that matter the hotel has been desperately in need of a renovation. If the place is properly renovated and the number of rooms they have is decreased greatly, chances are they can increase their average nightly rate significantly, while profiting nicely off the condo sales.
Nonetheless it’s interesting that Anbang isn’t taking a hands off approach in their ownership of this property, given the changes they’re making. It doesn’t really change my thoughts on what would have happened if they bought Starwood, which I still think would have been a net positive. Keep in mind Starwood itself owns very few hotels, but rather only has management contracts for properties. Even if Anbang wanted to, it’s not like they could have converted Starwood properties into condos, etc.
What do you make of the plans Anbang has for the Waldorf Astoria?
(Tip of the hat to TravelinWilly)