A Chinese company is looking to sell three major U.S. resort hotels for a combined price of $1.3 billion, looking to cash in on those holdings amid a surge in leisure travel and resorts.
Dajia Insurance Group Co. is putting the Montage in Laguna Beach, Calif., the Four Seasons resort in Jackson Hole, Wyo., and the Four Seasons in Scottsdale, Ariz., up for sale, according to people familiar with the matter. BofA Securities Inc. and real estate banking and brokerage firm Eastdil Secured LLC is marketing the hotels on behalf of the seller, these people said.
The three properties are part of Dajia’s Strategic Hotels & Resorts portfolio, a group of 15 U.S. luxury resorts and hotels that also includes urban properties such as the JW Essex House hotel overlooking Manhattan’s Central Park and InterContinental Hotels in Chicago and Miami.
The Chinese company, which took control of most of the operations of China’s Anbang Insurance Group Co., had agreed in 2019 to sell the entire strategic portfolio to South Korea’s Mirae Asset Financial Group for $5.8 billion. But that deal unraveled as the pandemic caused travel to dry up and hotel revenue to plunge.
Now Dajia is back on the market with the three hotels, which represent some of the leading resorts in their cities at a time when leisure travel has boomed.
Americans’ pent-up demand for travel erupted last year and has continued this year. Many travelers show a preference for beaches, mountains and other resorts over trips to big cities. City hotels have also suffered from the sharp decline in business travel, which remains below pre-pandemic levels.
In contrast, the resort business has perhaps never been more lucrative. Average daily room rates and revenue per room availability, a popular industry metric, both hit new highs for U.S. resorts earlier this year and remain near those levels, according to lodging data firm STR.
Some travel analysts expect the mania for resorts to cool somewhat next year, especially if the country slips into recession and as pent-up travel demand from the Covid-19 lockdown period eases.
Still, growing interest in resorts and leisure travel looks set to stay, even with any near-term downturn, said Eric Resnick, managing director of KSL Capital Partners, a Denver-based investment firm that owns or operates more than 400 resorts, hotels, ski areas and other leisure companies worldwide.
“The affluent mass consumer has been fortunate to have greater savings and job security,” he said. “The demographic driver is travel and leisure broadly. We don’t see that going away.”
Dajia’s plan to sell the three hotels marks the latest effort by a Chinese company to exit or sell commercial real estate holdings in the U.S. While Chinese companies were aggressive buyers of hotels, office towers and other trophy properties in U.S. cities, their investments began to fall four years ago, around the time Chinese regulators made it harder for many companies to move money out of the country.
Dajia is seeking to raise $300 million each from the sale of the two Four Seasons properties and $700 million from the Montage Laguna Beach, according to people familiar with the sale process. The Southern California resort has more than 250 rooms and a 20,000-square-foot spa on 30 acres of beachfront property, according to its website.
Dajia also owns the Waldorf Astoria hotel on Manhattan’s Park Avenue, taking over the property after Anbang paid $1.95 billion for it in 2015, the largest price tag ever for a standalone US hotel.
The company is now scrambling to complete its plan to combine hundreds of guest rooms into luxury residences, a process that is shaping up to be one of the largest, most intricate and expensive condo conversion and hotel remodeling projects undertaken. The process has fallen behind and has gone way over budget, say people with knowledge of the matter.
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