Langham Hospitality Group, the hotel arm of Great Eagle, is looking to make a big splash in the U.S., with an expectation to acquire 10 hotels. How will it go about reaching that goal? It's earmarked a total of $1.5 billion. Why the U.S.? The company reportedly is finding still attractive asset pricing, and it wants to expand its portfolio to 100 hotels over the next five years.
This is the focus for Robert Warman, the new CEO of Langham Hospitality Group, who took over the position last month after former CEO Brett Butcher stepped down.
To achieve the target, the group will grow its portfolio through acquisitions and management contracts. The South China Morning Post reports that Langham will also set up a new brand catering to middle-level business travelers on the mainland to bolster its presence there. The new brand has not yet been finalized, but will initially roll out at four hotels in first- and second-tier mainland China cities at average room rates slightly higher than 1,000 yuan (HK$1,250) per night.
"We are currently looking at acquisition opportunities in Washington, D.C., Miami, New York, San Francisco, London, Prague and Shanghai," Warman said. "We believe there are opportunities to invest in Europe and the U.S., as property prices are still attractive."
He said the firm is conducting due diligence for a couple of the hotels and is actively in discussion 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 will become Langham hotels once they are acquired.
Langham owns or manages 23 hotels, under The Langham, Langham Place, and Eaton brands, with more than 8,500 rooms. It has more than 30 hotel projects either confirmed or in a developed stage of negotiations from China through India and the rest of Asia to the Middle East.
Besides the acquisition spree, he said the group was also in talks with several owners and developers regarding securing management contracts for their hotels.
More on the new brand: “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.
Before joining Langham, Warman was the president and CEO of Capella Hotel Group and co-chairman of Capella’s Asia board. Warman also served for 18 years in operational and executive roles at Ritz-Carlton.
Click here for a Q&A he recently had with The South China Morning Post.