Loews Hotels’ Contrarian Strategy Helps it Land Big Deals and Fend Off Short-Term Rentals

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.

Loews' 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.

Under the asset-light model, big brands mostly run hotels through management or franchise contracts. They can avoid the need for holding lots of capital to own buildings and land.

Loews prefers to be an owner and an operator.

Over five years, Loews has made gross investments of $316 million in Loews Hotels. The brand's room count rose by 30% to more than 16,000 rooms. In 2022, Loews Hotels generated an adj