Ashford Hospitality Trust, Inc. (NYSE: AHT) (“Ashford Trust” or the “Company”) announced that it has entered into a new franchise agreement with Marriott International (“Marriott”) to convert its Crowne Plaza La Concha Key West Hotel in Key West, Florida (the “Hotel”) to an Autograph Collection property. Marriott’s Autograph Collection® Hotels feature a diverse portfolio of approximately 180 independent hotels around the world that reflect a unique vision, design, and environment.
The agreement with Marriott calls for the Hotel to be converted to an Autograph by July 1, 2022, pursuant to a conversion Property Improvement Plan (“PIP”). The PIP is currently estimated to be $13.7 million, approximately $7.8 million of which is incremental. The PIP includes updates to the exterior, guestrooms, guest bathrooms, corridors, lobby, restaurant, lounge, pool, and meeting space. The conversion will create a distinctive theme and style for the Hotel that is commensurate with the upper-upscale/luxury Autograph product. Post-conversion, Remington Lodging will continue to manage the property pursuant to the new franchise agreement. The Company believes that post-conversion, the new Autograph property should realize a RevPAR premium to the current Hotel and that its incremental investment should yield an approximate 19% unlevered internal rate of return.
The 160-room Hotel is ideally located on Duval Street in the heart of Old Town Key West within walking distance of major attractions, shopping, entertainment, and nightlife. A unique and historic property, developer Carl Aubuchon opened this luxury hotel in 1926 – the first of its kind on Key West. Boasting marble floors, private baths, luxurious décor, an elevator, and sweeping ocean views, the hotel was considered to be the height of elegance and modern convenience. Many famous guests have stayed at the landmark hotel over the years, including literary legends and dignitaries like Ernest Hemingway, Tennessee Williams, and Harry Truman.
“With its prime location in Old Town Key West and deep history, the upbranding of this landmark hotel to an Autograph Collection property should elevate the property into a desirable niche in the very attractive, high-barrier-to-entry, high-RevPAR Key West market,” said Douglas A. Kessler, Ashford Trust’s President and Chief Executive Officer. “We remain focused on maximizing the value of our assets and continue to pursue transactions like this that we believe will create long-term value and enhance shareholder returns.”