Waldorf Astoria Kuwait Renderings

Waldorf Astoria is owned by Hilton. It makes no sense to have the Hilton in such a great location and ‘the’ Waldorf in one of the worst places in the country (possibly the world)? That’s just bad for the brand. I guess Paris Hilton is going through a rough patch.

Hotel conglomerates like Marriott and Hilton don’t ultimately care about where their hotels go: other than owning the odd landmark/flagship property, they build, design and own their brands and then franchise them out to owners who buy licensing rights to hang the brand name outside their buildings for a contractually-bound period. Hilton, like Marriott, cares most about collecting their fees from owners like Mabanee and can otherwise care less about where their hotels are situated or what the views are – as long as you, the owner, meet minimum brand standards and pay up, you can license any brand you want.

Marriott, for example, has 31 brands and over 7000 operating hotels in its portfolio, but only physically owns less than 100 of them. Owning a physical hotel asset is much costlier and more complex than working with an owner who buys the rights to a brand, so they’ve embraced an ‘asset-light’ strategy where they own as few hotels as possible in favor of a franchise arrangement, unless owning the hotel is absolutely necessary. For instance, Marriott is in the midst of transforming the Sheraton brand globally and bought the Sheraton Grand Phoenix for 255 million USD in 2018 to use the hotel as a lab/test bed for its new concepts and designs for the brand. As such, having it under their total control while they work on a new brand direction that they can then license out works for them for the time being, and they’ll ultimately resell the hotel just the way they did with the Charlotte Marriott City Center after owning it for several years and using it as a test bed for the reinvented Marriott brand.

Different brands have different licensing fees associated with them. Marriott’s Aloft charges a 75000 USD application fee plus 500 dollars per room if the property has over 150 rooms, in addition to a franchise fee of 5.5 percent of gross room sales, while Courtyard charges a 90000 application fee plus 500 per room above 150 rooms and a franchise fee of 6 percent of gross room sales. Getting the rights to a brand also means that the owners have to meet the design requirements of that brand [i.e. minimum room footprint, front-of-house to back-of-house area ratio], which is why in the Avenues’ case, the switch from Conrad to Waldorf Astoria required a total redesign of the building itself. The owner and operator then sign a contract to operate the owner’s hotel under an operator’s brand for a certain period, usually for ten to twenty years minimum with the option of extending for lower franchise fees under conditions like if the hotel’s performance meets a certain minimum and such. In the event that Mabanee wants to rebrand the Waldorf Astoria in the future before the contract is up, there’s almost always a breakup free in favor of the operator [in this case, Hilton] and the hotel can then be signed under another brand/operator.

Just like luxury goods as bags and shoes, hotels are becoming another item that are simply a name that can be bought.

Hotel rooms connected to malls is nice but I think nothing would ever trump a hotel room here you can literally wake up walk on to the balcony watch live the world cup matches like they have in Qatar. That is ultimate