Foreign ownership of hotels

That no domestic airline in the US can be foreign owned has never really perturbed the average traveler, particularly in the post-deregulation era of abundant competition that saw – first the emergence (and subsequent demise) of low-fare carriers like People’s Express – followed by today’s Jet Blue and Southwest. While travelers can do little to influence government regulations in that area, they ought to be concerned with the unseemly and unprofitable (to the traveling public) efforts of the legacy carriers to thwart Virgin USA’s take off. Anyone who has traveled on Virgin’s international route is unlikely to come away less than impressed with all aspects of their service including the fare.

Fortunately, the hotel industry has never had such restrictions despite some sales to dodgy despots and state (foreign) owned companies. And that has been an unquestionable good for the consumer, the employees and the real estate market even in instances when foreigners grossly overpaid (over market prices) merely to obtain a foothold in New York. By far the most successful and prominent hotel investor has been Kingdom Hotels owned by Saudi Prince, Al Waleed bin Talal. One time part-owner of the famed Plaza Hotel, his company. according to the Dallas Business Journal, has just bought the Fairmont Dallas hotel as part of a larger deal to buy Fairmont Hotel and Resorts for a whopping $3.9 billion. New York’s Palace hotel is the subject of another story (and a dispute) in today’s LosAngeles Times as the exiled Prince of Brunei (an oil-rich and peaceful Muslim state in South East Asia) is being forced to disgorge ill-gotten assets (pursuant to a lawsuit filed by his brother, the King of Brunei) . Without doubt, the hotel will be sold by the King at a profit given today’s strong market and, perhaps, to yet another entity from foreign shores seeking to plant their banner on US soil. The free trade in its assets is, indeed, a blessing to the industry.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

Leave a Reply

Your email address will not be published. Required fields are marked *