Langham Hospitality to spend US$1.5b on hotel buying spree
Great Eagle unit is to acquire 10 hotels mostly in Europe and the United States as it targets a portfolio of 500 properties over the next 10 years
Langham Hospitality Group, the hotel arm of Great Eagle, will earmark US$1.5 billion to acquire 10 hotels, largely in the United States and Europe, where asset prices remain attractive, as part of its expansion drive to build up a portfolio of 500 hotels in 10 years.
To achieve the target, the group will grow its portfolio through acquisitions and management contracts. It will also set up a new brand catering to middle-level business travellers on the mainland to bolster its presence there.
Robert Warman, chief executive of Langham Hospitality, said: "We are currently looking at acquisition opportunities in Washington, Miami, New York, San Francisco, London, Prague and Shanghai. We believe there are opportunities to invest in Europe and the United States, as property prices are still attractive."
There are opportunities to invest in Europe and the United States
He said the firm is conducting due diligence on a couple of the hotels and is in talks with the owners of the others or at the bidding stage.
Warman expects eight of the potential acquisitions to come under the Eaton brand, while two would become Langham hotels once they are acquired.
The group owns or manages 23 hotels, under The Langham, Langham Place, and Eaton brands, with more than 8,300 rooms.
It has more than 30 hotel projects either confirmed or in a developed stage of negotiations from China to India and the rest of Asia to the Middle East.
In Hong Kong, the group owns The Langham in Tsim Sha Tsui, Langham Place in Mong Kok and the Eaton in Jordan.
Great Eagle spun them off into Langham Hospitality Investment, a business trust, in May last year. Great Eagle owns 57.22 per cent of the trust.
The criteria for a new acquisition would include Langham Hospitality generating higher occupancy and average room rates after repositioning the property, Warman said.
He said the group was also in talks with several owners and developers regarding securing management contracts for their hotels.
Meanwhile, he said Langham Hospitality would launch a new brand over the next three months for domestic travel in China.
The brand, which has not yet been finalised, will initially roll out at four hotels in first- and second-tier cities at average room rates slightly higher than 1,000 yuan (HK$1,250) a night.
"It is going to be corporate-style hotels catering to mid-level executives, group sales and training. Once the brand is established in China, we will start to bring it to other major destinations," Warman said.
He said there was a shortage of mid- to upper-level business hotels on the mainland, which suffers from an abundance of luxury hotels in some cities.
Warman said Langham Hospitality's goal is to have more than 100 hotels over the next five years and is looking to raise the total to 500 in its second five-year plan.
