Loews Hotels’ paul whetsell This seasoned hotelier with owner, operator and brand experience has expansion on his mind Like many successful people in the hotel industry, Paul Whetsell, president and CEO of Loews Hotels, never had any intention of being an hotelier. As a student at Davidson College, outside Charlotte, N.C., Whetsell, like many cash-strapped kids, needed a paycheck. “I started not because I liked hotels, but because I had to work,” Whetsell told Hotel Management. He went to school during the day and worked the front desk at a local hotel at night, sometimes dozing off during the night audit, he recalled. Even after graduation, Whetsell was not sold on a hotel career. He moved to Washington, D.C., to work on the Hill, but, hard-pressed to find a worthwhile job, he turned back to hotels. “It was a business I fell in love with,” he said. First with Choice Hotels International (at the time Quality Inns), he moved from there to Dallas and worked for Lincoln Property Company. But like anyone with entrepreneurial spirit, Whetsell wanted more. In 1987 he started his own company that would become CapStar Hotel Company, which eventually went public with 12 hotels. Two years later the company owned 113 properties. “When I first started the company, I said I’d be happy operating 15 hotels,” Whetsell said. CapStar eventually morphed into Interstate Hotels & Resorts, which today operates close to 400 hotels. Whetsell entered the market at the perfect time: tax laws were changing under President Ronald Reagan and many distressed properties were coming to market. “I couldn’t get short-term management contracts because we weren’t big enough,” he said. “It worked to my advantage because the contracts I did get were longer term, which allowed me to build up a more stable company.” While CapStar was pure management at its outset, in the early 1990s, CapStar took on an equity partner, focused on owning real estate and went public. A New chapter Since CapStar, Whetsell spent time at Interstate and subsequently was on the board of directors for Richard Branson’s Virgin Hotels. Then in January 2012, a few months after Jonathan Tisch ceded his role of CEO at Loews Hotels, Whetsell, known for his hotel acquisition aptitude, assumed the post. He is now directing the hotel owner/operator, which currently has a portfolio of 17 hotels in North America. “There’s an absolute unequivocal commitment by Loews Corp. to supply capital to grow the hotel company,” Whetsell said. “In three to five years, I’d be deeply disappointed if we didn’t double the size of the company.” To do so, Whetsell will look to fill in key distribution points that are vacant of a Loews flag. According to Whetsell, they are: Boston, Washington, D.C., Chicago, San Francisco and Los Angeles (Loews Santa Monica Beach Hotel, Whetsell said, is not proper L.A.). Secondarily, he sees opportunity in cities such as Seattle; Portland, Ore.; Houston; Dallas; Minneapolis; St. Louis; Charlotte, N.C., and in Toronto and Vancouver. “Beyond that, we are in the resort destination business, but we are not in the Caribbean yet,” Whetsell said. Loews plans to grow two ways: via acquisitions and new builds—though the former is the more attractive mode. “I still believe you can buy existing assets and convert them to Loews’ system at a discount to replacement [cost],” Whetsell said. “That is our preferred route. If we find ourselves stymied or shut out of some of the major markets where we want distribution, and there are no other ways to enter, then we will entertain building hotels.” Though covering North America is Loews’ first priority, Whetsell is not immune to growing the brand overseas. “We are in a global business; we don’t have our heads in the sand,” he said. In Europe and Asia, growth would come via whole company or portfolio acquisitions. “That would clearly be the way to grow internationally,” Whetsell said. Whetsell admits that “the best return on investment for a branded operator is the asset-light approach,” yet Loews still has an ownership mentality. “We have a good balance sheet,” he said. “We can take down assets ourselves then bring [on] capital partners after the fact. It gives us an advantage over those who are solely dependent on others’ capital. We could look at partnerships on some existing hotels where we keep the long-term management contracts.” As an hotelier who has worn many hats—owner, operator and brand—Whetsell firmly believes that the most important role is that of owner. “An owner makes the decision to buy, how much to invest, how much to leverage, he or she decides the market position for the asset and what brand best fits,” Whetsell said. Now, Whetsell is a brand man once again. He says a brand’s job is to establish the hotel’s identity and provide a channel of distribution. A seasoned hotelier in his own right, Whetsell is working alongside an industry luminary in his own right, Jonathan Tisch. He’ll also draw on his time spent working with another industry dynamo, Sir Richard Branson. “[Branson] has an uncanny knack of being able to understand or see consumer trends,” Whetsell said. “He is the most incredible risk-taker I’ve ever met. When you combine the ability to understand trends with the willingness to risk it all, that’s a pretty powerful component.” In Tisch, with whom Whetsell has day-to-day communication, he sees a different type of visionary, one who is “more measured and controlled.” Tisch, who still is chairman and “the face of Loews,” as Whetsell put it, will be right there with Whetsell on development decisions. “I rely on him heavily and he is getting to understand my strengths,” Whetsell said.