John Paulson seeks to sell two hotels in Puerto Rico

John Paulson with Condado Vanderbilt Hotel and La Concha Renaissance San Juan Resort (Condado Vanderbilt, Marriott)

Billionaire investor John Paulson, who has flirted for years with the idea of ​​moving to Puerto Rico, is looking for two San Juan hotels he bought for $ 260 million in 2014 – and may be able to secure double what he spent.

Paulson hired JLL to market the Condado Vanderbilt hotel in San Juan and the La Concha Renaissance San Juan complex, according to the Wall Street Journal. Hotel owners and brokers say the two properties together could fetch more than $ 500 million.
Puerto Rico’s tourism and hospitality have been hit hard by the pandemic. By August, more than a third of San Juan’s huge upscale mall, believed to be a symbol of the territory’s economic recovery, was empty, and flagship retailer Nordstrom was about to exit.

Hotel occupancy is now largely back to 2019 levels. Occupancy in the first 10 months of 2021 was 63.2%, nearly double the percentage from last year and below this period in 2019.

Revenue per available room, a key indicator of the hotel’s performance, hit $ 152 this year, more than twice last year and above the $ 137 in 2019, according to STR.

Puerto Rico was in economic difficulty even before the pandemic. Hurricanes Maria and Irma in 2017 devastated the island amid budgetary and political difficulties. Hotel owners and investors are hoping the post-pandemic boom could help reverse that fortune.
The emergence of the Omicron variant of Covid-19 does not appear to have a major impact on demand.

“We had a few cancellations, but they were made up for by other bookings,” said Luis Mendez, director of sales and marketing for El Conquistador Resort, whose hotel remains nearly full during the New Year’s holidays.

The US entertainment and hospitality market still has a way to go before it returns to pre-pandemic levels. In November, the industry employed 1.3 million people, 7.9% less than in February 2020.

[WSJ] – Dennis Lynch

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