New York’s Waldorf-Astoria Downsizes
In late-2014, a Chinese insurance company announced plans to acquire the iconic Waldorf-Astoria hotel in New York, well-known by planners of luxury meetings, for a record-breaking $1.95 billion, the most ever paid for a U.S. hotel up to that point.
Fast-forward 21 months to this month (July) when the new Chinese owner, the Anbang Insurance Group Company, made more news: according to press reports, Anbang plans to close the hotel in the coming months, invest another billion dollars and convert roughly a thousand of its 1,413 rooms into condominium residences. This will reduce the number of keys to somewhere between 300 and 400. Considering the scope of the work, the hotel will close for three years, reopening sometime in 2020.
“What will a dramatically smaller Waldorf be like, both for meetings and special events?” planners are likely to be wondering. “Will the qualities that distinguish the Art Deco landmark, which dates to 1931, still be there?” “Furthermore, will the service levels planners and attendees take for granted remain unchanged, not to mention the famous ornate lobby clock, Peacock Alley, Starlight Roof, Bull and Bear restaurant? And, hey, what about the signature Waldorf salad?”
All (mostly) valid questions. (Safe bet the salad is safe.)
As it happens, the Waldorf isn’t the only iconic New York luxury hotel to undergo a downsizing in recent years. The equally well-known Plaza Hotel shrank from 805 rooms to 282 rooms as part of a change in ownership in 2005, reopening in 2008 with 152 condo residences part of the reinvention.
Both are in desirable locations for planners eyeing a Manhattan destination. The historic Plaza, which dates to 1907, is off Fifth Ave., facing Central Park, while the Waldorf boasts a Park Ave. address at 49th St. in the heart of corporate midtown.
Hilton Worldwide, which owned and managed the Waldorf, starting in 1972, will continue to manage on behalf of Anbang, post-transformation. Similarly, Fairmont Hotels & Resorts operated The Plaza pre- and post-changeover.
When envisioning the ways any luxury hotel might change as a potential meeting or event venue following this kind of overhaul, planners will want to factor in these pros and cons. Ideally, the pros will outweigh the cons:
Pro: Guest rooms. In the process of converting guest rooms to condos, the owner and/or developer takes the opportunity to upgrade the guest rooms remaining. That means a new decor package, the latest in-room technology and so on. Likewise, the whole building gets new elevators and back-of-the-house systems that in all likelihood have not been updated in years.
Con: Location of the guest rooms. Given that potential buyers of the condo units are going to pay top dollar per square foot, it makes sense that the top floors of the building and the best views be devoted to condos, while the space allotted for guest rooms may be less desirable (i.e. lower floors, overlooking the side street, no park-facing views).
Pro: Meeting and event space. To the degree booking group business is still a high priority, meeting and event spaces—many with irreplaceable character and authentic touches—will be restored and enhanced.
Con: Reserved for owners. With the reduced number of guest rooms, there may well be less need for meeting and event space overall. Consequently, like the best views, the most interesting and unique spaces may be turned into other uses (private dining, library, residents lounges) strictly for condo owners.
Pro: Iconic history, great service culture. Considering their long-standing reputation and excellent location, these hotels’ appeal is timeless. And with a smaller number of keys and more intimate, upgraded meeting and event space, attendees will be assured a first-class experience. Another plus: the operators are returning, which means they know the property and you can be confident service levels will be as strong as ever.
Con: Who’s in charge? Typically in these situations, there’s one manager for the condo portion and another for the hotel. Each has responsibility for his or her domain. A telling sign: If the hotel manager reports to his or her condo counterpart, take note.