Loews Hotels & Resorts, a wholly owned subsidiary of Loews Corporation (L - Free Report) , announced that it has completed the purchase of Graves 601 Hotel Wyndham Grand in Minneapolis, Midwest U.S. The company bought this 255-room property from Graves Hospitality Corp.
Loews Hotels shelled out $65 million for the purchased property which it has renamed to Loews Minneapolis Hotel. Loews will spend another $7 million by early 2015 to renovate the property . Loews – known for operating high-quality, full-service hotels – is aware that the key to attracting leisure travelers is not in giving them just a product, but an experience.
Loews was attracted to buy Graves 601 Hotel given its hot spot. The purchased property enjoys location advantages by virtue of being in the business, theatre and entertainment hub of downtown Minneapolis.
Purchase of the 556-room InterContinental Chicago O'Hare Hotel last week and building of another hotel, Loews Chicago, a 400-room downtown hotel slated to open in Feb2015, attests to the fact that Loews is betting on the Midwest U.S.
Midwest U.S. provides ample scope for hotel development activity. The area boasts a diverse and vibrant economy, based on manufacturing, government business and high-tech industries. It also offers a diverse menu of outdoor and leisure activities. The market provides affordable accommodations and is a “low key” destination required for meetings, groups and incentive travel.
Developing Hotel Business
Since 2012, Loews’ Hotels has added five hotels in key cities, namely Boston, Washington, DC, Los Angeles, Orlando and Chicago. Loews’ Hotels business presently owning and operating 21 hotels and resorts in the U.S. and Canada, reported revenues of $105 million in the last quarter, reflecting a 12% a year-over-year increase. The segment contributed $3 million to Loews’ consolidated earnings. Going forward, we expect the number to improve as the Hotels business ramps up. Loews had earlier announced intentions of expanding its hotel count to over 30 and increasing its net income threefold by 2015.
Armed with a strong capital position, management will continue to hunt for suitable opportunities to develop and acquire properties in the key U.S. cities cater to a larger customer base.
Loews currently carries a Zacks Rank #5 (Strong Sell). Better-ranked multi-line insurers include Radian Group Inc. (RDN - Free Report) , CNO Financial Group, Inc. (CNO - Free Report) and Prudential Financial Inc. (PRU - Free Report) . While Radian Group sports a Zacks Rank #1 (Strong Buy), CNO Financial and Assurant carry a Zacks Rank #2 (Buy).