US$1.95b New York hotel sale could signal attempt to attract Chinese elite, analysts say

The announcement that Hilton Worldwide agreed to sell its landmark Waldorf-Astoria hotel to little-known Chinese firm Anbang Insurance for a record US$1.95 billion has again proved the appeal of New York real estate as a haven for foreign investors.

However, analysts say the deal, the most ever paid for a US hotel, could be a play to capture the spend of elite Chinese travellers, as well as a move to help the Waldorf brand expand into China.

Expected to close by year-end, the Waldorf agreement follows the purchase of the Carlyle hotel in 2011 by New World Development, and the US and Europe-focused expansion of Asian hospitality operators such as the Mandarin Oriental and Hongkong and Shanghai Hotels.

The Cheng family, which controls New World, owns the Beverly Wilshire Hotel and once owned a stake in the Four Seasons Hotel New York.

"We are seeing a tremendous amount of hotel buyers from Asia," said Alan Reay, the president of Atlas Hospitality Group. "I think this is because they see this segment of real estate as offering the most upside as it has been depressed for so many years."

Although Hilton will continue to operate the hotel under a 100-year management contract, the 83-year-old property is due for a renovation and its new owner could help it cater to the fast-growing VIP Chinese traveller.

Outbound mainland tourist numbers in 2020 will reach 200 million, double the 100 million who took overseas trips last year, according to a CLSA estimate, and tourist spending will triple.