Is the hIlton for sale?

Owner looking into possible sale of the Caribe Hilton Hotel

Industry source says the property is being catered to private equity firms

Juan A. Hernández, The Weekly Journal

Park Hotels & Resorts, Inc., owner of the Caribe Hilton Hotel is supposedly considering the sale of the property, as reported by financial news agency Bloomberg News. The news agency cited an unnamed individual with knowledge on the matter as the source of the information. According to Bloomberg’s industry source, the real estate investment trust (REIT) seeks in excess of $200 million for Puerto Rico’s historic hotel, and is catering the property mainly to private equity firms that focus on real estate. As of last week, a spokesman for Park Hotels declined to comment to Bloomberg. Before news of a possible sale of the Caribe Hilton were leaked, Thomas Baltimore, chairman and CEO of Park Hotels, announced it sold interests in five non-core hotels for some $268 million this year. Earlier this year, the company confirmed the sale of the

Hilton São Paulo Morumbi in

Brazil for $117.5 million, or $234,000 per key. According to www.hotelmanagement. net, after capital adjustments the sale price would represent 14.9 times “the hotel’s 2019 earnings before interest, taxes, depreciation and amortization.” Park Hotels & Resorts, a corporate spin-off of Hilton Worldwide, also sold the Embassy Suites by Hilton Washington DC

Georgetown for $90.4 million, or $459,000 per key. Capitalization rate on the hotel’s 2019 net operating income was 5.9%, or 14.8 times the hotel’s 2019 gross revenue. In a prepared statement last February,

Baltimore expressed his excitement over “the sale of two noncore assets that advance our strategic objectives at very attractive pricing.” Furthermore,

Baltimore stated “the sale of the Hilton São Paulo marks our official exit from international markets, and we have now sold or disposed of 24 assets for over $1.2 billion since our spin-off from Hilton, including 14 international assets.” In light of Baltimore’s statement, the question to be answered would be whether Park Hotels & Resorts exploration of the possible sale of the Caribe Hilton is part of its strategy to “exit from international markets” and/or reducing the company’s net leverage “closer to our targeted goal of low 4x net-debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization),” as he admitted in his February statement. On July, the business and career platform www.zippia. com reported that Caribe Hilton had 750 employees and annual revenues for $63 million. Despite efforts to get a reaction from Caribe Hilton management, as of deadline no response had been issued.

Asked about the possible sale of the Caribe Hilton, Brad Dean, Discover Puerto Rico’s CEO, highlighted the hotel’s “high historical value in Puerto Rican tourism and is one of the hotels in the great tourist corridor between Old San Juan, Santurce, and Condado.” “Discover Puerto Rico does not play a role in the process of buying, selling, or managing accommodations in Puerto Rico. Our mission is focused on promoting Puerto Rico as a destination.

In fact,

The REIT seeks in excess of $200 million for Puerto Rico’s historic hotel, and is catering the property mainly to private equity firms that focus on real estate. Regardless of any changes in ownership or hotel administration, Discover Puerto Rico will continue to drive demand and promote all lodging facilities in our archipelago,” Dean said. When the Caribe Hilton was inaugurated in 1949, it was the first Hilton hotel outside the continental U.S., and hailed, according to its website, as “the island’s first modern hotel.” While Hilton International operated the government owned hotel since the beginning, it took the company almost 50 years to buy the hotel. In 1998, Puerto Rico’s government sold the hotel for $80 million to Hilton. In 1999, the hotel was closed for a $65 million renovation and reopened on Christmas Day that same year. In January 2017, ownership of the hotel was transferred to Park Hotels & Resorts when that company was spun-off from Hilton Worldwide. Later that year, the hotel was heavily damaged by Hurricane Maria, forcing it to close. It reopened in May 2019, following a renovation of more than $150 million.

We have now sold or disposed of 24 assets for over $1.2 billion since our spin-off from Hilton, including 14 international assets.

Thomas Baltimore, CEO Park Hotels & Resorts

Puerto Rico tourism industry continues to break records

Trend continues despite a volatile economic scenario

Madison Choudhry, Special to The Weekly Journal

Increasing reservations and longer stays keep trending in the hospitality sector as records show tourism on the island continues to push past records. This achievement comes despite the tourism industry facing a volatile economic scenario, due to concerns associated with inflation, air transport, high fuel prices, and international diplomatic concerns.

Since the beginning of 2022, Puerto Rico has broken its jobs’ record in the leisure and hospitality sectors every month. According to the U.S. Bureau of Labor Statistics, beginning from January 2022 till June 2022, each month has surpassed the previous record of employment to ultimately reach 86,700 workers.

“The current leisure and hospitality employment statistics confirm that the tourism industry in Puerto Rico continues to strengthen steadily.

Thanks to the combined efforts of the public and private sectors, in recent months, we have not only seen a sustained increase in jobs, but we have also achieved historical figures in room tax collections and passengers transiting through our airports”, commented Carlos Mercado, executive director of the Puerto Rico Tourism Company.

Discover Puerto Rico, the island’s destination management organization (DMO), reported that combined data from firms Smith Travel Research (STR) and AirDNA show the $1 billion revenue mark for tourism was reached in July, three months earlier than in 2021.

“We have hit that mark for only the second time in history, and we’ve done it three months earlier than last year. Despite industry concerns, we’ve seen increased demand for lodging over last year’s record-setting pace. Through the end of July, total lodging demand is 18% higher than a year ago, with hotels booking 17% more business and rentals 20% more,” said Alisha Valentine, Director of Research and Analytics at Discover Puerto Rico.

Reservations for the remaining two quarters of 2022, in both hotels and private rentals, are projected to be above pre-pandemic levels. Based on a presentation by Discover Puerto Rico the fourth quarter of the year is the most promising, with bookings 6% higher than in 2021 in the case of hotels, and 12% higher for short-term rentals.

As a response to the positive results coming from the “Live Boricua” campaign, Discover Puerto Rico has decided to partner with Puerto Rican influencers to host channels to educate their audience on the meaning of “Boricua,” (native Puerto Rican). Data from Destination Analysis suggest that nearly a third of visitors’ motivation to come to the island is to return home to the island or visit family. Local culture is also a significant motivator closely following positive weather forecast. Despite the positive results coming from the tourism sector, Brad Dean, CEO for Discover Puerto Rico, maintains the company will continue to closely monitor the upcoming year.

“Discover Puerto Rico is maintaining a close watch over data and trends so that we are prepared to react quickly and decisively as we seek out every opportunity to continue the momentum our island’s tourism industry has enjoyed,” Dean added.

“Regardless of our positive results, the outlook for tourism is a mixed bag of positives and negatives, creating a lot of uncertainty for many

Tourists walk the main court of the famous Castillo San Felipe del Morro fort.

In fact,

The $1 billion revenue mark for tourism was reached in July, three months earlier than in 2021. in our industry. We know that many factors are impacting our industry in the second half of 2022, not only here in Puerto Rico but throughout the U.S. and the Caribbean. Demand for travel remains high, yet concerns about inflation and the economy are creating a lot of uncertainty for businesses and travelers alike. Employment is at its highest level ever in our local tourism industry, but most businesses are still understaffed and eagerly seeking to hire more people. And while cruisers are ready to resume cruising, the cruise line industry is still battling through the most difficult comeback of any segment within our industry,” Dean said.

…We have not only seen a sustained increase in jobs, but also achieved historical figures in room tax collections and passengers transiting through our airports. Carlos Mercado, executive director Puerto Rico Tourism Company.