Warwick’s Chiu simply likes 100% control

PARIS – Richard Chiu, president and founder of Paris-based Warwick Hotels and Resorts, likes to keep his business strategy simple – location is king, own 100% of his hotel assets to best control their fate and as a long-term holder, don’t overpay. To date, that philosophy seems to be paying off as the low-key and confident owner-operator of some 22 hotels like his position and says Warwick has always had a track record of financial achievement, performing better than his 4-star deluxe competitive set.

Chiu recently added to his portfolio – which also includes representation for about a dozen independent hotels and another 10-12 management contracts in the Middle East – with the acquisition of Montreal’s Hotel Le Crystal. Located in the heart of the city in the prime Golden Triangle corridor, Chiu said it took several months to reach a deal with the previous owner for the 131-room hotel that has been closed since February 2021 and preparing for a Mary reopening as Warwick Le Crystal – Montreal.

Chiu said the property is in good shape and flexibly designed for both leisure and corporate business with extended-stay capabilities. He said upgrades in the lobby, including a new bar, are likely in the plans for the property where he expects to earn an average rate between $350 and $400.

Looking ahead, Chiu said Warwick will remain very selective about growth, prioritizing location. The few cities on his radar at the moment are Miami, Austin, Texas, and Houston, Texas, but additional deals do not appear to be imminent. Warwick also has a presence in the white-hot Saudi Arabia market, and Chiu adds that it continues to work with developers there on additional projects.

Chiu added that Warwick would like to enter the management business in North America.

The current portfolio, which includes hotels in Paris, New York, London, Geneva, Dallas, Chicago and San Francisco, is performing well, according to Chiu with the U.S. leading the way and Europe coming back “quite strongly” with Paris leading the way.

“I would say 2022 was one of our best years – if not, if not the best year – and I am hopeful that 202 will be equal or even better,” Chiu said. “It’s too early to say but January and February were better than last year.”

When asked for his take on the broader state of the hotel industry, Chiu said he doesn’t yet see a recession coming. “I suppose if the Federal Reserve keeps moving interest rates up, at some point it will slow things down,” he said. “But then in the last few days (mid-March), as you can see, there’s a limit to that because if you push rates up too far the whole banking system might be called into question. I think the people in charge in Washington, D.C., would like to keep inflation down, but they will want to keep the economy growing – that’s they really want. So, I would think they would always choose to first make sure the U.S. economy is in relatively good shape – and then, if they can raise rates, they would. But if they think the economy is going to be affected negatively, they will probably moderate that stand.”