<FONT SIZE="+3"><B>Leading Loews, Industry</B>
At a time when luxury construction is scarce, the 14-property Loews chain has set out to build a Florida empire, with three convention resorts under way.
<I>BTN</I> hotel editor Linda Humphrey recently caught up with Loews president and chief executive officer Jonathan Tisch, who amidst the Florida splash has found time to chair the American Hotel & Motel Association, the Travel Business Roundtable and next year's International Hospitality Industry Investment Conference.
Lacking a Florida address since selling the Americana Bal Harbour in the '70s, Loews last month broke ground on the first new hotel to hit Miami Beach in 30 years and, partnering with MCA in Orlando, plans to launch two projects next year as part of the upcoming Universal City Resort.
On the brink of resurgence, Miami Beach will add the $135 million Loews Miami Beach Hotel, just 2 1/2 blocks from the convention center, in the summer of '98. Winning the last slice of Miami Beach oceanfront property from such contenders as Hyatt, Marriott, Peabody and Ritz-Carlton, Loews will renovate the 100-room St. Moritz and construct a 17-story, 700-room tower with 85,000 square feet of meeting space. MCA's Universal City Resort, slated for a 1999 debut, will feature Loews' 750-room Portofino Bay Resort, with 65,000 square feet of meeting space, and the 1,200-room Royal Bali Hotel, with 175,000 square feet of meeting space.
BTN: While most upscale chains are steering away from construction, why did Loews launch these three projects?
Jonathan Tisch: The opportunity to partner with the city of Miami Beach and build the first new hotel in 30 years that is so closely associated with the convention center in such a superb location was just something that we could not pass up. When this hotel starts construction, it will be one of the most exciting projects in this country. It's a chance for us to re-enter a market that we were in some three decades ago and be part of a community that is going to continue its growth, and position it as the focal point between North and South America.
When you combine the opportunity to work with a partner such as MCA and be involved with their doubling the size of Universal City, and creating two destination resorts that are interwoven into the theme park, we felt these were opportunities that really live up to the nature of Loews Hotels, which is to have unique properties that are not cookie-cutter and that tend to be the dominant property in their marketplace. Our development in Florida has gone from no rooms to 2,700 rooms in the course of about a year.
BTN: How big is the resurgence of Miami Beach?
JT: Based on our financial commitment, we think it's enormous. There is no doubt in my mind that South Beach has a very bright and long future. What has gone on down there in the last decade is nothing short of a resurgence of quality, of excitement, of creating a community that people want to be part of. It is not trendy. It is not chic. It is a creation of a resort community and a business center that will continue well into the next century.
BTN: Is the city's status as a meetings destination picking up?
JT: Based on our tentative bookings, we think there has been tremendous pent-up demand for Miami Beach as a meetings destination. And working closely with the Miami Beach Convention & Visitor's Bureau, we think that we now have the ability to reach out to many groups and meeting planners that have not used Miami in the past. We'll strive to bring in citywide conventions that will not only use the Loews Miami Beach Hotel but will utilize the other properties and the convention center as well. We're committing over $150 million in equity to three hotels that will be highly dependent upon meetings.
BTN: How will you blend the hotel into the Miami Beach environment?
JT: We have certainly spent a tremendous amount of time recognizing the nature of the art deco neighborhood, and through our architecture of the new building and the renovation of the existing St. Moritz Hotel, which will yield about 100 rooms, we think we have designed a structure that is in keeping with this unique neighborhood.
BTN: Your partnership with MCA in Orlando seems to be in keeping with your view that the hotel business mirrors the entertainment industry.
JT: The opportunity to build two first-class resorts in partnership with MCA lives up to our sense that the hotel industry is part of the entertainment industry. MCA is doubling the size of the existing theme park and will be creating new entertainment venues, and our hotels will be seamlessly interwoven into the theme park, so that you will be able to go right from the new Jurassic Park to the Portofino-which will be based on the Italian port-and you will think that you are in Italy. You will be able to go from the Marvel Comic Book Land to the Royal Bali hotel. These hotels will be heavily themed, allowing our guests to experience entertainment during their hotel stay as well as in the Universal theme park.
People stay in hotels for a variety of reasons, but they are escaping in a sense, so we have to find a way to make our hotels feel a bit different than our competitors' properties, and you do that through an understanding that this is entertainment. When you walk into the lobby of a hotel and there's a dirty ashtray, or the front desk clerk is not helpful, taken out of context it doesn't mean anything. But it is very much a part of the overall image of what is a Loews hotel.
BTN: Would you say that your growth strategy is still conservative?
JT: Very conservative. We will only pursue opportunities that fit into our return-on-investment criteria and that continue to differentiate Loews from our competition. We are not about quantity, we are about quality. We have no desire to be 100 hotels. We have a desire to be part of the community where we operate our hotels.
BTN: Loews has just one overseas hotel, in Monaco. Do you plan to target another international destination?
JT: One of the challenges that we face at Loews is that we are pretty lean at the top ranks, which is a deliberate decision to keep our expenses as low as possible. So with the current focus that we have on opportunities in the United States, it really is not allowing us to look too much overseas. That said, we look at every opportunity and weigh it versus our plans and our goals.
BTN: How do you see your role as chairman of the American Hotel & Motel Association?
JT: My number-one focus will be ensuring that Bill Fisher, our new president, will be able to quickly transition from his current position as president of the National Restaurant Association into his new role with AH&MA. Bill brings with him a tremendous amount of experience in areas where AH&MA needs some focus, such as increasing the ranks of our membership, how new technology will affect the hotel industry and probably most importantly, continued expansion of AH&MA's activities on Capitol Hill.
I will continue to speak toward my platform of the power of partnerships, that in today's highly competitive business environment you cannot be all things to all people. But you can reach out to many relevant constituencies to increase your overall ability to be a successful business as well as a successful and contributing member of society.
BTN: What are the latest developments with the Travel Business Roundtable?
JT: Our goal is to continue looking for new members who are committed to working on Capitol Hill, to increase the visibility of the travel industry, to ensure that our elected officials know that our industry is the second-largest employer in the country and that we cannot be looked to for unfair legislation and taxation, and to work with the 70 chief executives that we have as members of the TBR on a variety of issues that we think are important to the profitability of the travel industry.
We also have made business meal deductibility one of our focuses for 1997, to work with our elected officials to try to get them to reverse their decision lowering the amount of deductibility from 80 to 50 percent. We think it would increase rather than reduce business, and hence we would deliver more to the revenue of the country. (For more on business meal deductibility, see Page 6.)
BTN: Do you have any suggestions about what travelers can do to combat rate hikes and the occupancy crunch?
JT: Know what your options are. There always tend to be rooms available at the last minute. There always are ways of trying to improve your status. Start early in your negotiations, and try to jump to the other side of the table to understand what is important for the hotel as well.