What Would Conrad Hilton Think of the Waldorf-Astoria’s $1.95 Billion Sale?
He famously dubbed the Waldorf-Astoria “the greatest of them all,” and declared it his life’s ambition to add it to his collection. Mission accomplished. In 1949 Conrad Hilton took over management of the Art Deco showpiece and in 1972 he purchased it, five years before his death at a ripe old 91. So how would Hilton feel about this week’s sale of Hilton Worldwide’s crown jewel to a Chinese insurance company for $1.95 billion?
“He would be ecstatic,” says Mark Young, director of the Hotel Industry Archives at the University of Houston, home to the Conrad N. Hilton College of Hotel and Restaurant Management. “He called the Waldorf the greatest, but for the right price, I believe he would be willing to sell it.”
It’s hard to quibble with the price — a world record for a hotel — especially because the deal hands over management of the Waldorf to Hilton for 100 years. Everybody wins, it seems. Ever heard of Anbang Insurance Group? You have now, and they get to park their money at a marquee property. And Hilton? Not only do they have a long-term guarantee that they’ll operate the hotel, they’ve got a fat cash infusion for desperately needed refurbishments, especially to the outdated rooms — more than 1,000.
The sale is a reminder that large hotel companies like Hilton, Marriott and InterContinental don’t own many of the properties that flaunt their names. As far back as 1925, Hilton built the Dallas Hilton — the first hotel with his name attached (and now known as the Indigo Dallas) — on land he didn’t own. At the time he observed that, though new to Texas, this type of deal was fairly common in New York.
For hotel history buffs, the megabuck October sale to Anbang has an earlier parallel. It was 60 years ago this month that the savvy Conrad snapped up Statler Hotels, the traveling salesman’s “it” hotel chain, for $111 million. ‘At the time this was described as the largest land deal since the Louisiana Purchase, but today almost no one has heard of Statler hotels,” Young says.
But they know Hilton, and this latest deal makes certain the name won’t be forgotten any time soon.
The deal reminds me of the other big Chinese 100-year deal — Hong Kong. Actually, it was a 99-year lease, and then the British returned the management of the former colony to China in 1997.
Incidentally, even adjusted for inflation the price tag for the Waldorf, at $1.2 billion, is higher than the $111 million paid for the Statler Hotels six decades ago. In today’s dollars, that one would be $981 million.
Thanks, Max. A good point about the Statler price. It’s always nice when someone else does the math.