Hotel Analyst
managing Chinese hotels, but for now the idea of taking a stake in the NH portfolio is off the table. It was at the beginning of 2012
that HNA was linked with the Aman Resorts portfolio, a global chain of 25 luxury resorts up for sale by Indian owner DLF. But having received no feedback on its bid - and with DLF complaining bids had come in lower than hoped - HNA cancelled its interest. In Brussels, HNA has interests
in three hotels. It bought the 126 room Sodehotel La Woluwe located close to the Chinese embassy, formerly owned by Belgian airline Sabena, in 2007. The hotel is managed by Best Western, and will be reflagged under HNA’s Tangla brand as its reshaping is completed. A major extension that will add 181 rooms, restaurants and seminar facilities, due for completion in 2013 and lifting the hotel to five- star standard. Two other Best Western- branded hotels, the 64 room Premier Carrefour de l’Europe, and 71 room Best Western Wavre are listed on the HNA Hotels & Resorts. The three Brussels hotels were the first foreign additions to HNA’s portfolio of more than 40 hotels and resorts. With a vertically integrated
travel and aviation group, it is clear HNA is following the business logic Western airlines used when creating their own hotel groups in earlier decades. Hainan Airlines has already announced a 50% increase in capacity on its Beijing to Brussels route, from the current four flights a week to six a week by the end of 2012. “We have put an eye on other
investment opportunities in Europe but I don’t want to reveal details at this early stage,” said Zhang Jinsong, chief representative in charge of Hainan Airlines’
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European operations, speaking at the ground breaking ceremony. Across the Atlantic, HNA’s
first foray into the US market was revealed in February. The Chinese paid a reported USD130m for the Cassa Hotel and Residences on 45th Street. HNA has asked the Viceroy Group to manage the luxury hotel and it has become the fourth in their Urban Retreat collection. The property has 165 rooms and suites, and was completed in 2010. Where next for HNA? Expect
hotels in Hainan’s other current European destinations - Budapest, Berlin, Zurich and Moscow - to be on the shopping list.
HA Perspective: HNA might be taking the initial route of US airline Pan Am, which founded InterContinental and grew the chain by adding hotels in major cities where it established routes, but HNA is hardly likely to end up with the same end result. Pan Am had first mover
advantage, opening a chain of international hotels before anything similar existed. HNA is competing against a number of established and entrenched brands.
Chinese capital is undoubtedly
a significant force in the international hotel industry. But Chinese hotel brands will need more than organic or single asset activity if they are to ever match the existing global majors.
Marriott’s latest (balance
sheet) Edition After much waiting, and a false start, Marriott has got its
112 MARCH / APRIL 2012
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Edition boutique brand off the ground. But the creation of the new, hip chain has come at a price - the cost of purchasing no less than three of the city centre properties that will open in the near future.
Five key locations were announced in late January, in Manhattan, Bangkok, Abu Dhabi, Los Angeles and Gurgaon, India. The five add to previously announced Miami Beach and London locations, while the Edition in Istanbul is already open. The first Edition, which opened
in Hawaii in 2010, is no longer part of the brand, following a falling out between the owners and Marriott, culminating in the former changing the name and tearing up the management agreement in summer 2011. It now trades as the Modern Honolulu. Marriott has paid USD165m
for the Clock Tower at 5 Madison Avenue, an iconic structure. Marriott president Arne Sorenson insists it “will become a flagship for the Edition brand, and one of New York’s most compelling places to stay.” Constructed in 1909, the block was headquarters offices for the Metropolitan Life Insurance Company. Edition was created in
partnership with Ian Schrager, to be a cool, style-led brand that would enable each location to have its own character, while still being a clearly identifiable brand in the market. Marriott has been threatening
the market with a hip new hotel brand for more than four years, as it tried to keep up with Starwood and their cool W chain. Sorenson suggested the process would now accelerate: “While the rollout of the brand was slowed by the global economic downturn, we
remain strongly committed to this brand.... We have a number of other exciting projects under way which we expect to announce in the coming months.” In Bangkok, the Edition will
be part of a planned mixed-use development with one of the city’s tallest towers. In Abu Dhabi, the hotel will be part of the Al Bateen Harbour complex. Miami Beach and London are
both conversions, respectively refurbishments of the Seville Hotel and the London Berners, and are due to open in 2013. Marriott bought the traditionally styled 193 room London hotel in late 2010 for a price believed to be in excess of GBP60m, shortly after acquiring the 12 storey beachfront Seville for USD57.5m. The team expects to have six of the hotels operating, across three continents, by 2015.
HA Perspective: The Wall Street Journal headlined its article “Marriott Delivers Late Editions” in a report that highlighted the USD800m of investment Marriott is having to make in the acquisition and refurbishment of the three key properties. Marriott has often been a
byword in the hotel industry for conservatism but with a number of recent initiatives it is trying hard to hang out with the “cool kids”, as Starwood will no doubt be flattered to be described. Apart from Edition, Marriott
has tried to bring a much stronger style element through in its Renaissance brand and it is even trendifying its core-brand Marriott, dumping swirly carpets and armoires. But let’s not get carried away on
two fronts. Firstly, Marriott is not about to embark on some major property buying spree. The capital it is deploying is to kick start the
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