Anticipating large numbers of travelers from Asia as economies like China’s continue to grow—especially as they grow the middle class, wealthy Chinese investors are snapping up prestige hotel brands in large US cities. This is a trend we expect to see more of.
“It’s driven by the combination of the strength of the Chinese economy and the relative strength of their currency to the dollar,” Alan Reay, president of Atlas Hospitality Group, said. “They obviously see the travel industry as a growth industry, especially with the growing middle class in China, which is increasingly traveling to other parts of the world.”
New World Development Co., controlled by the family of Chinese billionaire Cheng Yu-Tung, recently purchased five luxury hotels at a cost of about $750 million from Maritz, Wolff & Co. and Rosewood Corp. The transaction began last month with an agreement between New World and Maritz, Wolff for New World to purchase the luxury hotelier Rosewood Hotels & Resorts.
New World Development will use these properties to expand its international hospitality presence.
Another factor making this an opportune time for foreign investors to enter America is the 2008 market crash—the effects of which are reflected in the still-recovering market prices of hospitality properties. Reay said that high-end lodging has had the biggest recovery since the market crash—translating into sales of properties like those purchased by New World.
Hotels acquired by New World Development include the following:
-Manhattan’s Carlyle, which boasts 188 rooms and a view of the Manhattan skyline. The Carlyle’s cash flow never dipped below $10 million during the recession.
–Rosewood Inn of the Anasazi is a 58-room boutique hotel. Located in Santa Fe, New Mexico, it features hand-carved doors, sculpted stairways, and sandstone walls.
–Rosewood Little Dix Bay is located on Virgin Gorda in the British Virgin Islands. The Caribbean luxury resort provides ocean-view dining, outdoor showers, and complimentary tennis clinics.
–Rosewood Crescent Hotel is located in uptown Dallas, Texas. It is within walking distance of the largest urban arts district in America.
–Rosewood Mansion on Turtle Creek, a private residence-turned-luxury hotel, is also located in Dallas. It features stained-glass windows, hand-carved fireplaces, and marble floors.
photo credit: carlyle