Loews Hotels’ Contrarian Strategy Helps it Land Big Deals and Fend Off Short-Term Rentals
Photo Caption: Exterior of Loews Miami Beach Hotel. Source: Loews.
Skift Take
While other hotel groups shed assets, Loews keeps buying more. While others shy from convention businesses, Loews bets on big groups. When everyone is going one way, it opens up an opportunity for others to exploit contrarian paths.
If you listen to the half-dozen largest, publicly held hotel groups based in the U.S. and Europe, you would think owning the hotels you run is a terrible strategy and that providing large hotels for conventions and group bookings is a bad idea. Yet Loews, a publicly held holding company, is happily pursuing both strategies in its hotel business.
Loews Hotels confirmed its contrarian approach when the parent company reported second-quarter earnings on Monday and said its hotel division more than doubled its net income to $74 million.
The publicly held holding company said owning the hotels it operates can make it more profitable in certain circumstances — and can also hedge against competition from short-term rentals.
A Bet on Asset-HeavyLoews' bigger rivals — the largest hotel groups — avoid owning or long-term leasing hotel real estate. Marriott was first to shift in the mid-1990s, but its rivals have mostly shed assets, too.
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