When President Obama visits New York this month for the UN General Assembly, reports are he'll be staying at the Lotte New York Palace in lieu of the Waldorf Astoria. It's reportedly because hotel officials, including John Tolbert, managing director, do not comment on guest movements.
While officials are trying their best to hush President Obama's lodging arrangements, the unveiling of the newly owned and renamed Palace Hotel was heralded far and wide. In fact, a Wednesday celebration of new ownership, South Korea's Lotte Hotels & Resorts, included an appearance by Brooke Shields and an address by Lotte Hotels & Resorts' CEO, Yong-Dok Song, whom Hotel Management spoke to before the big unveiling, which included the drop of a big black curtain revealing the new name of the hotel.
Most Americans do not know the Lotte name. But Lotte's $805-million purchase of the hotel last month from Northwood Investors is the first step to showcasing the brand.
"We haven't really had the chance to go into the U.S. as much as we'd like to," Song said through an interpreter. "This is a great stepping stone for us to get into the U.S. the market."
Buying a hotel of this caliber—a property that was opened 35 years ago by Leona and Harry Helmsley—is a good start.
According to Song, the purchase is part of a plan to bring the entire Lotte brand to the U.S. Lotte Group has more than 60 subsidiaries, from food manufacturing to heavy chemicals. (The acquisition of the New York Palace does come at a time of turmoil at Lotte. As Forbes writes: The acquisition represents a triumph for Shin Dong-bin the younger brother who ousted his father, Shin Kyuk-ho, as chairman of Lotte Holdings. While the deal was in the works, Shin then had to fend off the struggle by older brother Dong-joo to remove him and take over the Lotte Group, including the flagship Lotte Hotels.)
"It's not just about this hotel on its own, but of the brand," Song said.
Meanwhile, Song will seek to expand the Lotte hotel brand. He said that the group is looking at even further opportunities in New York, and is seeking out deals in Los Angeles, Chicago, Miami and "other symbolic U.S. cities."
The Lotte acquisition of the New York Palace comes at a time when other New York trophy properties have changed hands, ending up in the palms of foreign investment groups, from the likes of China, and now Korea. The Waldorf Astoria and Baccarat Hotel are the other two high-profile trades.
Song believes this should continue. "There are various reasons for foreign direct investment," he said. "What's going on in China with its currency devaluation—the market is more volatile than it used to be. A lot of companies are looking to come to North America and Europe, slightly more stable and mature markets."
Undoubtedly, the Lotte name has arrived. "It's not just about this hotel, but the group," Song said. "It's a symbolic stepping stone that Lotte can leverage as a whole. It's a way to get here."
Image above; from left: John Tolbert, managing director, Lotte New York Palace; Fred Dixon, president & CEO, NYC & Company; Korean Consul General Ghee-whan Kim; Lotte Hotels & Resorts' CEO Yong-Dok Song; and actress Brooke Shields. Photo credit: Dia Dipasupil/Getty