With tourism tanking, Kimpton Group to sell five hotels
Faced with one of the worst years ever for tourism and leisure travel, San Francisco’s Kimpton Group said Thursday it will sell five of its boutique hotels in the city.
The Clarion Bedford, Cartwright, Galleria Park, Vintage Court and Juliana hotels — which have a combined total of 649 rooms — are all up for sale, according to a statement released late Thursday by company President Tom LaTour.
‘This represents a unique opportunity to gain access to the San Francisco hospitality market’, LaTour said in the statement. ‘Industry experts are predicting (a) market rebound for 2003 and 2004. We expect participating buyers will be well positioned for the upswing.’
San Francisco hotels have been mired in one of the longest slumps in years. The tech crash, corporate cutbacks and travel concerns after the Sept. 11, 2001, attacks have sent the city’s hotel occupancy rate this year into the 60-percent range.
In a normal year, city hotels are about 70 to 75 percent filled.
Hotel analysts said the Kimpton properties, located in the Financial District, Union Square and Nob Hill, could fetch anywhere between $ 100,000 and $ 150,000 per room.
Selling the properties could be tough. The market for hotels has been soft for the past year because potential buyers have balked at high prices set by sellers, said Gary Carr of PKF Consulting in San Francisco.
What’s more, boutique hotels have suffered lower room occupancy rates than mainstream brands since the tourism downturn began.
‘They don’t have the national marketing efforts and branding to help them broaden their market appeal’, said analyst Tom Callahan, also of PKF Consulting. ‘These hotels cater to corporate and leisure travelers, so they’ve been hit harder.’
Each of Kimpton’s 38 properties around the country is owned by different financial partnerships but usually managed by Kimpton.
One hospitality industry expert speculated that the company would try to continue managing the five San Francisco hotels after they are sold.
‘Those management contracts are valuable,’ hotel analyst Curtis Davies said. ‘They provide income for the Kimpton hotel and restaurant group.’
Kimpton Group, founded by the late Bill Kimpton in 1981, is one of the largest boutique hotels companies in the country and widely considered to be an industry leader.
Last year, LaTour, who succeeded Kimpton after his death, embarked on an aggressive expansion into other cities and the resort market. The company opened four hotels in Washington, D.C.; and one each in New Orleans; Aspen, Colo.; and Cupertino.
A Kimpton spokeswoman said she doesn’t know the last time the company sold a hotel.