NEW YORK CITY—A lot has changed since Kirk Kinsell stepped into the corner office at Loews Hotels & Resorts.
Since being tapped as president and CEO on 2 March, he’s seen the company continue to roll out its soft brand, OE Collection, as well as announce its third brand, the high-end Loews Regency.
And then there’s what Kinsell calls the “asset-medium” approach, which represents something of a departure for the 69-year-old enterprise that historically has shouldered expansion via its own balance sheet.
It’s all orchestrated with one goal in mind: growth, he said during an interview in conjunction with the 37th annual NYU International Hospitality Industry Investment Conference.
‘Asset-medium’
While other hotel chains have been shedding the risks inherent with real estate ownership for decades, in some cases, Loews Hotels has stood resolute against that asset-light wave, comfortably carrying its assets on its balance sheet.
“Ownership is something that we’re very comfortable with,” Kinsell said. And the company will continue to differentiate itself by pulling that lever.
To accelerate growth, however, the CEO said other avenues also must be pursued.
“When we look in the future and our growth ambition, there’s no way we can necessarily bring to bear the capital for all of that. We need to share that with others,” Kinsell said.
The result is an “asset-medium” approach that aligns brand with owner, he explained.
“We’re always willing and very happy to align our interest with owners,” he said. “Owners can be very comfortable that we understand what it is to deliver to their bottom line, not to our net revenue line as a lot of branders and managers do, but to a bottom-line figure in terms of asset ownership.
“So over time we’ll see the company devolve from what is a heavy ownership interest to an asset-medium ownership interest,” Kinsell said.
“I don’t put numbers to it,” Kinsell said when asked how big he wants to grow the company. “We know, though, to be competitive and to be there for our guests, we’re going to have to be in a lot more locations than we are in today.”
Loews has some room to work. With 23 hotels open and another two under construction, its size pales in comparison to chains such as Hilton Worldwide Holdings, which counts more than 4,300 properties in its portfolio. Even the more similarly scaled Omni Hotels & Resorts has 60 hotels.
Kinsell favors a more deliberate pace that keeps customers top of mind.
“The ambition and vision is more around how can we enrich the lives of guests, how can we enrich the lives of our owners and how more importantly can we enrich the lives of our team members?” he said. “And we’ll do that through a multi-brand strategy; we’ll do that through appropriate and targeted growth.”
New brands
Loews officially launched its OE Collection in January, but Kinsell said the need for such an offering has existed for some time now.
“It really speaks to the fact that there are a number of owners (with) assets who don’t want the … structured brand-standard approach that a lot of the brands bring. They want to retain their character, want to retain their own sense of identity, but yet they need somebody to help them with the management and delivery of the guest experience and the overall achievement of their investment results,” he said.
Reception to the soft brand has been “very strong,” Kinsell said, adding, “It’s early days.”
First on the OE slate is the Bisha Hotel in Toronto, which will include a condominium component, he said.
The other arrow in Loews’ brand quiver is the Loews Regency, which leverages the success of the existing Loews Regency New York.
“Guests were saying, ‘We like what you’re doing in New York. ... We’d like to have more options to stay with you,’” Kinsell said.
The next option comes via the recently converted Mandarin Oriental hotel in San Francisco.
Expect more Loews Regency hotels in similar “principal, commercial centers” along the East and West Coasts, Kinsell said.
Opportunities everywhere
Loews’ newfound expansion ambitions could see the company expand overseas.
“From a strategic standpoint and from a brand-lens standpoint, if our guests are traveling internationally, we want to be there for them. … Having those inbound, outbound markets can be very powerful,” Kinsell said.
For now, though, there’s plenty of opportunity left in the United States.
“I personally believe that the U.S. is still the world’s largest lodging market,” Kinsell said. “It has a lot of room for growth if you look at our map and where we are today. I don’t think we necessarily need to go abroad.”
Will growth come via new builds, conversion or adaptive reuse?
All of the above, Kinsell said.
“I wouldn’t rule out (mergers and acquisitions) of some type that is going to be of reasonable size that we can manage but could be transformative to the company,” he said.