Loews Corp., a New York-based insurance and energy holding company, named Paul W. Whetsell chief executive officer of its hotel unit today as the luxury chain prepares to acquire properties.
Whetsell, 61, has worked in the hospitality industry since college and was most recently executive director of Virgin Hotels, a brand being developed by Richard Branson’s Virgin Group Ltd. He joins Loews Hotels, where he also will hold the title of president, on Jan. 17, succeeding Jack Adler, who announced his retirement in October.
“He brings a wealth of experience to Loews Hotels,” Jonathan Tisch, co-chairman of the parent company and chairman of the hotel division, said in a telephone interview. “I view his coming on board as a great opportunity for me to have a partner as we move forward and look at the challenges in today’s lodging industry, but also the opportunities.”
Room rates for U.S. luxury hotels such as the Loews, Ritz-Carlton, St. Regis and Four Seasons brands increased an average 6 percent this year through November, while average occupancy rates rose to 71 percent from 67 percent a year earlier, said Jan Freitag, senior vice president at Smith Travel Research Inc. of Hendersonville, Tennessee. Industrywide, U.S. room rates rose 3.7 percent while occupancy rates averaged 61 percent, he said.
“Life is really good on the upper end of the market,” Freitag said in a telephone interview. “We’re seeing increases in demand at the same time we’re not seeing any new supply, because banks aren’t fond of lending.”
Seeking New Cities
Loews, which operates 18 hotels and resorts in the U.S. and Canada including the Loews Regency Hotel in New York, is planning to expand into such gateway cities as Boston, Chicago, San Francisco and Washington, Whetsell said.
“Our focus will be on acquisitions of existing hotels,” he said in a telephone interview. “Particularly in the major markets, I think you can still find opportunities to buy, renovate and convert to the Loews brand less expensively than new construction.”
Whetsell in 1987 founded CapStar Hotel Co., a real estate investment trust that had more than 100 hotels and $3 billion in assets. In 1998, CapStar was split into MeriStar Hospitality Corp., a real estate investment trust, and a company now known as Interstate Hotels & Resorts Inc., which manages lodging properties. Whetsell served as chairman and CEO of MeriStar until Blackstone Group LP acquired it in 2006, and as chairman of Interstate until 2009.
The hotel division contributed $8 million to Loews Corp.’s $796 million of net income for the three quarters ended Sept. 30, and $251 million of revenue to the company’s $10.6 billion for the period, according to a filing with the U.S. Securities and Exchange Commission.
“It’s the only subsidiary that bears the Loews name,” said Tisch, whose family has been in the lodging industry since 1946. “We like the hotel business. We think we’re good at the hotel business.”
The terms of Whetsell’s compensation weren’t disclosed.