NEW YORK— Older downtown hotels in prime locations increasingly have to look no further than their own first floors to maximize the value of their real estate. Resorts and suburban hotels may have land available to add private residences or condo hotel towers, but for city hotels, the solution often boils down to one word: retail. The most recent example of the trend involves the venerable Waldorf=Astoria Hotel here, which is in the process of expanding its lobby-level retail space by 60%. The first fruits of that effort came on line in April when a new retail space opened in the south lobby adjacent to the main lobby. The 1,200-square foot store was carved from underutilized storage and office space. Across the country in San Francisco, Strategic Hotels & Resorts had a similar strategy in mind when it acquired the Westin St. Francis for $440 million in April from affiliates of the Blackstone Group. Strategic chairman and CEO Laurence Geller told HOTEL BUSINESS® he intends to install upgraded retail and restaurants to make better use of the hotel’s valuable frontage on Union Square. Meanwhile in Chicago, Thor Equities, LLC, acquired the Palmer House last fall for $230 million from Hilton Hotels Corp. with an eye towards creating an entire wing dedicated to retail at the base of the hotel. At the Waldorf, which is also part of Hilton Hotels Corp., the first new store serves a purpose beyond simply generating rental income for the hotel. The luxury shop, which is managed by Lamont’s— a Hawaii-based hotel and visitor convenience store operator— sells a signature line of branded Waldorf merchandise as well as high-end designer items. Among the clothing items are logo shirts, sweaters, and bathrobes. Also included are customized jewelry pieces such as gold cuff links embossed with the bull and bear symbols of the hotel’s namesake restaurant. “Up to now, this line of merchandise has only been available online and via our hotel retail catalogue,” said Waldorf=Astoria general manager Eric Long. “So the shop is a way to reach a wider audience, starting, of course, with guests at the hotel.” Enhancing the Waldorf brand became more of a priority earlier this year when Hilton rolled out a plan to create the Waldorf=Astoria Collection that would include independent luxury hotels that Hilton would manage for their owners. The first three properties to join the collection were the Arizona Biltmore Resort & Spa in Phoenix; the La Quinta Resort & Club in La Quinta, CA; and the Grand Wailea Resort & Spa in Maui. The three are owned by CNL Hotels & Resorts.
