Published : Sept. 18, 2015 - 17:01
Lotte Group is speeding up its global hotel business expansion to compete with the world’s top-tier hotel chains like Hilton and InterContinental .
Lotte Hotels & Resorts said it aims to take over or build 33 hotels by 2018, and ultimately 50 hotels by 2020, with the latest being Lotte New York Palace in Manhattan. The group currently operates 11 hotels in Korea and six abroad.
The new five-star luxury hotel, previously named The New York Palace Hotel, was acquired for $805 million from U.S. real estate management Northwood Investors in May.
(From left) Lotte New York Palace managing director John Tolbert, city tourism chief Fred Dixon, Korea’s New York Consul General Kim Gee-hwan, Lotte Hotel CEO Song Yong-dok and actress Brooke Shields pose during a sign hanging ceremony Wednesday at the Lotte New York Palace. (Hotel Lotte)
“We think this is very meaningful in that we’re entering the North American market with New York’s historic hotel,” Lotte Hotels & Resorts president and CEO Song Yong-dok said Wednesday at a sign hanging ceremony.
“The New York Palace buyout is an opportunity for the group as a whole to expand its retail and confectionary businesses in the U.S.,” he said.
Lotte New York Palace’s opening further gained the spotlight recently with the news of President Obama’s planned stay during his visit in the city this month to attend the U.N. General Assembly.
Some have viewed his decision as having diplomatic and political implications, as past U.S. presidents have traditionally preferred Waldorf-Astoria, which was recently acquired by a Chinese insurance firm for about $2 billion.
Speculations rose that the U.S.’s diplomatic tensions with China and possible cybersecurity concerns led Obama to nix his stay at Waldorf.
Launching to great fanfare, market insiders believe Lotte will see its brand value increase significantly as it is set to become a global name in the business.
“If history is any indication, the South Korean company has a great potential to compete with global rivals such as Hilton, InterContinental and Marriott, like Hyundai Motor Company and Samsung Electronics have in their own areas,” an analyst from Daishin Securities said.
The CEO indicated that its great sensitivity to a high level of customer service would be the key to success.
“With our Korean-style service that welcomes and treats customers dearly, and the New York Palace Hotel’s traditional traits, we’ll satisfy visitors from all over the world,” Song said.
Lotte has already begun efforts to solidify its global presence, opening hotels in Moscow in Russia, Ho Chi Minh and Hanoi in Vietnam, Toshkent in Uzbekistan and the U.S. island territory Guam.
During the National Assembly’s audit session Thursday, Lotte Group chairman Shin Dong-bin said the conglomerate plans to list Hotel Lotte on the local bourse within the first half of next year.
Hotel Lotte is the de facto holding company of Lotte’s operations in Korea.
By Suk Gee-hyun (
monicasuk@heraldcorp.com)