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Los Angeles -
Loews Hotels during the past year accelerated its growth by adding about a
half-dozen new properties through acquisition and development. "It's been
a little bit different for this company," said Troy Furbay, then Loews'
executive vice president of acquisitions and development, during an interview here
in January at the Americas Lodging Investment Summit. "If you look at the
last 10 years, Loews hasn't been that acquisitive, but we changed that pretty
quickly." Promoted this month to chief investment officer, Furbay is one
of several executives to join Loews during the past couple of years, all of
whom are charged with increasing the brand's footprint. An edited transcript of
his interview with BTN lodging editor
Michael B. Baker follows.
What are your newest projects?
Chronologically, we acquired the Renaissance Hollywood in June of this past year. We followed that with the groundbreaking of Cabana Bay Beach Resort in Orlando, which is 1,800 rooms. It's our fourth resort in the complex there, on the campus of Universal Studios. It's the biggest hotel under construction in North America, and outside China, it's the biggest. We broke ground on the Loews Chicago about a month later, about a 400-room hotel in downtown Chicago in the Streeterville section. It opens in 24 months. We [have purchased] the Madison hotel in Washington, D.C., and we recently announced the [purchase of the] Boston Back Bay Hotel. We have more coming up later this year.
What are your next targets?
We're very strong in the resort markets, the East Coast and the Southwest desert. We have some holes in our portfolio: ski country, for example. We're trying to get into the Aspen, Vail and Utah markets. We're still trying to get into San Francisco. Hawaii is a big push for us. We can rotate big groups throughout different regional resorts, but we get to Hawaii, and we lose them to other brands. San Francisco will be a hard market to get into. It's pricey, and everything feels too expensive, but we'll get there. Then, we look at secondary markets: Minneapolis, Houston and Seattle. We're not as strategically trying to get into those markets; we're more reactive into the secondary markets. Europe is a big push: London and Paris. We're a little less focused on Asia. It's further away and would take a platform to get into that market.Last year, [CEO Paul Whetsell] said we're going to get to 50-plus hotels over the next three years. We're making some dents into that. If you do the math of five or six hotels a year, you don't get up to the scale we're trying to get to, so there will be some portfolio acquisitions that will catch us up on a more rapid pace. Now, we don't know exactly what that is yet. A lot of the development world and acquisition world are not linear. You can't state a strategy. But, we're actively looking for larger portfolios we can bring into our system.
Will this improve your ability to sell to corporate accounts?
That's why we're doing it. Our customers are all in these markets that we're not. To keep the customer base within the Loews system, we have to go where they are. A lot of these markets are feeder cities into current Loews hotels. We're divesting a couple non-strategic hotels. We sold Denver back in December. We're selling Quebec City this year. Frankly, our pricing and positioning didn't lend themselves to those markets, where the average rates are lower.
What's driving this recent round of growth? Is it the improvement of market conditions?
It's a combination of things. Loews Corp., our parent company, a couple of years ago looked and saw the company was getting smaller and hadn't put a lot of investment back into the hotel company. They made the decision to go long on the hotels and reinvest in the platform that really started the company 60 years ago. We put in a new executive team. I joined the company two years ago. Paul Whetsell came in a year later. Paul's made some pretty bold changes to our executive team over the last 12 months. Most of the operating disciplines have changed in one form or another, and the organization has changed a lot. In the last six months, we started to fill in some of the major gateways that Loews hasn't been in for a long time.
Has that restructuring occurred on the sales side as well?
It's pretty much a new team. If you look at the team in place a year ago, it's a lot of new faces. [Former Ritz-Carlton executive] Bruce Himelstein joined us as our chief marketing officer, and he's put together a new team.
What sort of investment are you making into your current portfolio?
We're developing a lot more technology in our lobbies. Our whole portfolio is going through quite a bit of transformation—not only the ones we're buying but also our existing assets. Some of our properties haven't seen a lot of capital put into them in a while, so we're catching up on some of the properties that missed the last cycle. We've got about $170 million going into our portfolio of existing hotels. All of our lobbies are getting a very tech-oriented repositioning. There's a plug everywhere. There's access to Wi-Fi throughout the operation. We're upgrading all the bandwidth in all our hotels, so it's a lot faster than it's been in the past. We're evaluating different pricing of Internet—a tiered approach. If people come in wanting heavy bandwidth and videos versus someone who just wants to check emails, we're looking at various pricing strategies. We're always measuring our service scores and trying to benchmark ourselves against others, and we are looking at ways through technology—iPods and iPads—where we can measure them and let them check in easier.
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