First Free Story (1 of 3)Join Skift Pro
Loews Corp.’s lodging unit agreed to buy the Mandarin Oriental San Francisco Hotel ahead of a new phase of growth under its incoming chief executive officer.
The 158-room property, currently managed by Mandarin Oriental Hotel Group, will be the first in the city for Loews Hotels & Resorts, the buyer said Tuesday. Paul Whetsell, who is stepping down as CEO of the unit next month, said San Francisco was the last of the top-five gaps he planned to fill in the portfolio since taking over in 2012.
Loews already added hotels in the Washington, Boston, Chicago and Los Angeles markets. Under new CEO Kirk Kinsell, the company can pursue growth in areas like Seattle, Denver, Phoenix and Dallas, Whetsell, who will stay on as vice chairman of the hotels business, said in a phone interview.
“One of the things we have been very focused on trying to do is make sure we can accommodate our customer base, not just in locations where we have been, but locations where they want to go,” he said. “We’ve got room still to grow. We want to continue to fill those gaps in our system.”
Loews Corp. CEO James Tisch has been reshaping the company, exiting a natural gas explorer last year as he focuses on operations including the resorts business and insurer CNA Financial Corp. The lodging unit has a portfolio of more than 20 properties.
The San Francisco hotel is on the top 11 floors of an office building on Sansome Street in the city’s financial district, according to a statement from the company that didn’t disclose terms.
“It’s this kind of property we’ve been chasing after,” Whetsell said of the Mandarin Oriental. “We wanted a luxury hotel, we wanted something that would represent Loews well.”
The San Francisco and San Mateo lodgings market ranked fifth in the U.S. in 2014 for revenue per available room. Hotel occupancies in the area averaged 84.1 percent last year, compared with 64.4 percent for the U.S., according to STR Inc.
This article was written by Jing Cao from Bloomberg and was legally licensed through the NewsCred publisher network.