LaSalle Hotel Properties, Bethesda, Md., plans to spend $5 million over the next 12 months sprucing up its Embassy Suites Hotel, 1776 Benjamin Franklin Parkway, and its Westin Philadelphia at 17th and Chestnut (Liberty Place), in advance of the opening of the enlarged Pennsyvlania Convention Center, analyst Daniel P. Donlan of Janney Capital Markets told clients in a report today.
LaSalle spent $224 million buying the two hotels from HEI Hotels and Resorts, Norwalk, Conn., last fall. HEI still manages the hotels, along with its Le Meridian Philadelphia.
The hotels are already profitable -- LaSalle is keeping around 38 cents of every rental dollar, before interest, taxes and other financial costs, and can expect to boost profits "by increasing the number of rooms a housekeeper can clean in a given period of time," Donlan adds.
The convention center expansion has boosted the number of big events booked there to 15 next year adn 17 in 2012, up from 10 this year and back to pre-2008 crash levels and boost convention-related hotel rentals above the current level of about one-third (vs. 40% at other big downtown hotels.)