The San Diego Union-Tribune
07/05/17

Hotel del Coronado Is Going to Become a Hilton
By Lori Weisberg

http://www.sandiegouniontribune.com/business/tourism/sd-fi-hoteldel-hilton-20170705-story.html

The storied Hotel del Coronado will soon become a Hilton hotel, joining the huge hospitality company’s smaller Curio Collection of more unique, upscale properties around the world.

But don’t expect to see a large Hilton marquee suddenly adorn the facade of the 129-year-old, red-roofed Victorian building. While Hilton’s physical presence will be understated, the company’s marketing muscle and its 64 million honors program members will significantly broaden the reach of a property that already is widely known…
…The move was especially surprising to longtime broker and hotel analyst Alan Reay of Orange County-based Atlas Hospitality Group.

“I’ve never seen anything like that before, where you have a restriction on who you can sell a hotel to,” said Reay, who values the hotel at $800 million to $1 billion. “It is hard to find who the real ownership is behind Anbang, and there was a concern that high-level government officials had a stake in the company.”

Just last month, Anbang announced that its chairman, Wu Xiaohui, was stepping aside temporarily for “personal reasons.” The announcement came not long after it was reported that Wu had been detained by police as part of a Chinese government investigation into his company.

Reay said the new Hotel del Coronado alliance with Hilton makes sense for a number of reasons, including Blackstone’s relationship with the company, which it purchased in 2007. It has since pared its stake in Hilton to just 10 percent.

Normally, a hotel’s affiliation with a name brand like a Hilton or Marriott can help raise the profile of a property, although that’s less a benefit for the Hotel del Coronado, long known for its connection to major films and such Hollywood luminaries as Marilyn Monroe and Jack Lemmon, said Reay. But there are still other benefits, he said.

“We’ve moved to a lot of online travel agents like Expedia and TripAdvisor, and as an independent hotel, you have no bargaining power with those online travel agents,” said Reay. “But with Curio there could be a significant savings on those commissions that could help pay for the fees to be part of the Hilton system. So it’s definitely an economic decision — the combination of those savings and the affiliation of Hilton’s reservations system and tapping into those loyalty members who travel through the Hilton honors program.”

Blackstone said it was drawn to Hilton because of its proven record in operating hotels, and the Curio Collection was an especially good fit…