Loews Regency Plans $70M Hotel Renovation

Loews Corp. plans a $70 million renovation of the Loews Regency Hotel New York, a 354-room luxury property at the corner of Park Avenue and East 61st Street, as the company focuses on an expansion of its hotel division in Manhattan.

The upgrades should be completed by February 2014, when the National Football League's Super Bowl will be held at MetLife Stadium in nearby East Rutherford, N.J. The venue is the shared home of the New York Giants, which is 50%-owned by members of the Tisch family, Loews Corp.'s founders.

The Regency renovation, which will be done in stages to avoid service disruptions, is part of an initiative to overhaul and bolster Loews's hotel business, its smallest unit. Loews Corp., the New York-based insurance and energy holding company, plans to more than triple the hotel division's net income by the end of 2015 and increase its hotel count from 18 to about 30.

It is widely expected that the company will make a major acquisition in Manhattan by the end of this year, as Loews is willing to pay more than $500,000 a room for properties in New York City. The company is expected to boost its number of hotels from one - to as many as four- by next year.

Outside of New York, Loews is looking to pay as much as $400,000 per room for hotels in major cities, and the company expects to complete three acquisitions and announce one ground-up development before year's end.

The CEO is looking for high-end hotels that are in need of renovations and cater to business groups and corporate travelers, such as the Renaissance Hotel & Spa in Hollywood, which it bought from CIM Group last week. Loews will have a heavier focus on individuals to balance out a drop in group bookings during economic slowdowns.

The hotel division contributed $4 million to Loews Corp.'s $367 million of net income in the first quarter of this year, according to a filing with the U.S. Securities and Exchange Commission.

Loews Hotels is ultimately aiming for a similar business model and portfolio size as Four Seasons Hotels Inc. and Marriott International Inc.'s Ritz-Carlton brand, with about 60 to 70 properties.