NEW YORK – The future for the iconic Waldorf Astoria luxury hotel on Park Avenue could involve expanded shopping space, timeshare residences and substantially fewer guest rooms.
That’s according to remarks made Friday by Chris Nassetta, the CEO of Hilton Worldwide, which runs the Waldorf Astoria brand and owns the original location located at 301 Park Ave. between 49th and 50th Streets.
While speaking to Wall Street analysts about Hilton’s Q2 financial results, Nassetta gave analysts an update on the plan to extract value from the high-profile property that’s been a Hilton asset since 1949.
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“The priority for us in the end is to have a fully renovated repositioned product on the full city block on Park Avenue – and as part of that, a very high quality, five-star (hotel) that would be the flagship for the Waldorf Astoria brand.”
Financing the transformation will involve a financial transaction, such a sale of part of the property to an investor or the creation of a joint venture arrangement, he said. Regardless of the business deal that happens, consumers will likely see great change at the hotel that opened in 1931.
Today, most of the building’s 1.6 million square feet is dedicated to hotel guests with some 1,400 rooms available.
Fewer hotel rooms?
The new plan for the Waldorf Astoria might be to reduce the number of hotel rooms. Nassetta mentioned as a possibility a count of “plus or minus 400” rooms. That decision, however, will ultimately be determined by the business partner or partners that Hilton inks a deal with, he said.
“There are a lot of different ways to look at the uses where that hotel could be bigger than that,” he said, adding, “There are many that it could be smaller.”
Hilton Worldwide is on track to lay out details of a plan by the end of the year, he said.
Retail opporunities on Park Avenue?
During the company’s previous Q1 call, Nassetta laid out his reasons why shopping can make sense as a use for the landmark property:
“If you just take a walk (around) the full city block that we own on Park Avenue, and take it in and think about retail, I think you would very quickly conclude there are big retail opportunities there. So we – as part of the overall Waldorf plan – are very, very focused on enhancing the whole retail platform.”
Reducing the number of hotel luxury hotel rooms could be wise from a business standpoint, since the Waldorf Astoria is facing stiffer competition in the immediate vicinity. The historic New York Palace, for instance, recently spent $160 million renovating its rooms and public spaces, while Hyatt is getting ready to open the newly built Park Hyatt next month.
Friday’s discussion came seven months after Hilton Worldwide became a publicly traded company following its nearly $2.4 billion IPO, creating new pressures to drive returns for shareholders.
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Elsewhere in Manhattan, Nassetta said the company is further along with its plan to bolster retail space at the Hilton New York Midtown, which is the No. 1 largest hotel in the city with nearly 2,000 rooms. Designers are currently working on a vision.
“We’re in good shape to get that under construction early next year,” Nassetta told analysts.
Readers: What changes would you propose to make at the Waldorf Astoria?