As much as the sale of the Waldorf Astoria New York yesterday is emblematic of the surge of the Chinese economy, it is also a sign of the re-emergence and enduring value of a luxury hotel brand in the wake of several soft years following the financial meltdown of 2008.
The Anbang Insurance Group, a Chinese company, is buying the Art Deco Waldorf Astoria for $1.95 billion, which works out to about $1.4 million for each of its 1,413 rooms. “The deal is scheduled to close on Dec. 31,” reportsUSA Today’s Charisse Jones, “but if that closing time is delayed, the companies must finalize the purchase no later than March 31.”
The sale “carries the steepest price tag ever for a U.S. hotel, brokers say, although it isn’t the highest on a per-room basis," Craig Karmon writes in the Wall Street Journal. “Asian buyers in recent years have acquired the Plaza Hotel and the Carlyle Hotel at prices that exceeded $1.4 million-a-room, according to hotel data tracker STR Analytics.”
The building is the flagship for Hilton Worldwide's Waldorf Astoria Hotels & Resorts luxury brand, Jones informs us, which has 27 hotels worldwide and nine in development. The other properties remain under Hilton Worldwide ownership.
The Waldorf Astoria was so attractive to Hilton Hotels founder Conrad Hilton, whose company has managed the property since 1949 and owned it since 1972, that when the current incarnation opened on the Manhattan block defined by Park and Lexington avenues between 49th and 50th streets in 1931, “he scrawled ‘The Greatest of Them All’ across a newspaper photograph of the hotel,” Charles V Bagli informs us in the New York Times.
And its still an attractive address to McLean, Va.-based Hilton Worldwide Holding management, evidently, which negotiated an agreement to continue to operate the property for the next 100 years, according to a press release that also reveals “the hotel will undergo a major renovation to restore the property to its historic grandeur.”
The Waldorf “was the tallest and largest hotel in the world when it opened at its current location…,” reports Jonathan O’Connell in the Washington Post. Its first iteration, according to an official timeline, was the 13-story Waldorf Hotel built in 1893 by William Waldorf Astor at the corner of Fifth Avenue and 33rd Street. The 17-story Astoria Hotel was erected on an adjacent site by Waldorf's cousin, John Jacob Astor IV, four years later. Both were “dated” by the Twenties and the site was sold in 1929 to the developers of what would become the Empire State building as work began on the new edifice uptown.
“President Herbert Hoover heralded its opening in a radio broadcast from the White House,” writes O’Connell. After he left the White House, Hoover was among the famous names who resided in the Waldorf Towers. Others who lived there at the same time, according to a 1977 newspaper article by Jerry Hulse of the Los Angeles Times Service, included “Henry Kissinger, the king of Norway, Emperor Hirohito of Japan, the presidents of Mexico and Bolivia and a foreign minister from Kuwait.”
“We are very excited to be entering into this long-term relationship with Anbang, which will ensure that the Waldorf Astoria New York represents the brand's world-class standards for generations to come,” said Hilton Worldwide president and CEO Christopher J. Nassetta in a statement. “This relationship represents a unique opportunity for our organizations to work together to finally maximize the full value of this iconic asset….”
It also represents the latest example of “the heated competition — particularly among foreigners — for famous luxury properties that only a few years ago struggled to fill their rooms,” as the WSJ’s Karmin points out.
“Luxury hotels were hard hit during the downturn, as companies shied away from putting up employees in lavish quarters,” Karmin reports. “That stigma has faded and in recent months business and rewards travel has snapped back.”
“The Chinese have money to spend and the inclination to do so,” Sean Hennessey, CEO of consulting firm Lodging Advisors, tells the Times’ Bagli. “The property will continue to be an iconic hotel even if it’s owned by a foreign entity.”
Beijing-based Anbang, which was founded in 2004, has more than 30,000 employees and more than 700 billion yuan (about $114 billion) in assets that “provides a comprehensive range of financial and insurance services and products to more than 20 million customers, including life insurance, pensions, health insurance, property and casualty insurance and asset management.”
“Anbang Insurance upholds ‘water culture,’ ‘family culture’ and ‘internet culture,’ stresses increasing value for clients, employees and shareholders, and actively shoulders social responsibilities by devoting itself into programs for public welfare and charity, aiming at being an excellent corporate citizen,” according to its website.
Now, as a denizen of the Big Apple, it might want to brush up on all the diverse local dialects.