The announcement by Hilton Hotels & Resorts that San Juan’s iconic Condado Plaza hotel would no longer fly the Conrad flag — adopting the Hilton name instead — represents a brand shift for the property that may not be as business-as-usual as it seems.
While Hilton officials were adamant Tuesday that the change was unrelated to the level of customer service or amenities offered at the hotel, the truth is that during the two years that the Condado Plaza flew the Conrad flag, it was included in Hilton’s “luxury” category. That meant representing a “luxury brand offering a unique service experience and the world’s landmark hotels,” and belonging to an elite group of only 17 properties worldwide to fly that flag.
Now, as a Hilton, the 571-room property falls into the company’s full-service group of more than 550 hotels and resorts worldwide, including three other Hilton properties on the island.
“The decision to rebrand was not related to customer service. We pride ourselves on making every effort to provide refreshing hospitality while ensuring that every guest feels cared for, valued, and respected,” said Karla Visconti, director of corporate communications for Hilton Worldwide in the Caribbean and Latin America.
“While our luxury brands are recognized and well-regarded in Puerto Rico, the Hilton brand has a distinct history on the island, and as such, it made sense to have The Condado Plaza join this portfolio of hotels,” she said. “Not only is The Condado Plaza name itself highly recognized as a Puerto Rico icon, but the Hilton brand is well known for its connection to Puerto Rico as Hilton International was created with the opening of the Caribe Hilton in Puerto Rico.”
“Additionally, the Condado Plaza was also a Hilton in the 60s. This supported the decision that the hotel should return to its roots as The Condado Plaza and rejoin the Hilton Hotels & Resorts portfolio with the new name ‘The Condado Plaza Hilton’,” Visconti further explained. “We wanted to embrace this and take the hotel back to its roots as The Condado Plaza Hilton, while continuing to welcome guests to the high quality service and experience they have come to enjoy.”PRHTA Chair Ismael Vega (Credit: © Mauricio Pascual)
Hotel industry under siege
Hilton’s decision to realign its local property portfolio comes at a time when Puerto Rico’s hotel industry is taking a beating from a protracted economic downturn, higher utility costs, several new taxes effected July 1, and the negative aftermath of the proliferation of illegal adult entertainment video slot machines, which have taken a bite out of hotel casino revenue.
Ismael Vega, chairman of the Puerto Rico Hotel and Tourism Association told this media outlet Tuesday that the government is highly liable for the sector’s current condition, as it has failed to take action in a timely manner.
For one, he blasted the García-Padilla administration for failing to crack down on an estimated 25,000 adult entertainment video slots that are allegedly operating illegally, and which he said are responsible for eroding revenue generated by about 7,000 slots operating inside hotel casinos.
“Casino revenue usually totals about $315 million. This fiscal year, that number closed at $296 million. The reduction, coupled with an outdated casino regulation that needs amending and is in the hands of the Tourism Company, is forcing hotels to cut back on their services, which includes closing or reducing casino operating hours,” he said.
Last year, El Conquistador Resort in Fajardo — another Hilton property — announced the closing of its casino, which Vega attributed to both problems.
“How much less attractive is the Conquistador now to the tourist who is looking a the different amenities a hotel offers prior to making their reservation? Of course it’s less attractive,” said a frustrated Vega, noting that if casinos are not viable, more will close and soon.
“If casinos close, where is Tourism going to get the money to promote Puerto Rico as a destination? This is the result of not taking care of illegal slot machines and not working on drafting new casino regulations on time,” he said, adding the PRHTA will meet with Tourism officials this week to discuss its problems.
Dwindling casino revenue represents a blow to hotels that depend on it to expand or invest in the property.
“No hotel owner or investor is going to continue taking out money to uphold an operation, especially when you see no effort by the government to make things better,” Vega said, admitting that the Radisson Ambassador Plaza Hotel & Casino, for which he is the chief financial officer, will be scaling back its casino operating hours starting Aug. 10.
“That means eliminating 30 jobs. We’ll no longer be operating 24 hours a day, because our revenue has dropped and we blame the illegal slots for that,” he said, saddened by the necessary lay-offs.
Vega would not discuss the changes at the Hilton properties — saying those are private decisions by its owners — or if there are other hotels planning to reduce their casino operations.
However, this media outlet learned there are at least three other hotel properties in San Juan that will follow suit in coming weeks.El Conquistador Resort is the only hotel in Puerto Rico bearing the Waldorf Astoria brand. (Credit: © Mauricio Pascual)
The Condado Plaza rebranding is the most recent the hotel chain has implemented locally. In June 2011, the 382-room El San Juan Resort & Casino joined the Hilton Hotels & Resorts portfolio, after bearing the Waldorf Astoria moniker for less than two years.
The rebranding represented the same fall from luxury-to-full-service for the Isla Verde property and now leaves the El Conquistador Resort as the only hotel in Puerto Rico bearing the Waldorf Astoria brand.
“With El San Juan Resort & Casino, it was perfect timing to do this as the Hilton Hotels & Resorts brand was relaunching the resorts portfolio, and the hotel would benefit from this recognition, given they fit perfectly with the group of properties,” Visconti said. “El San Juan Resort & Casino fits well as part of this portfolio due to its features as a resort experience.”
The Condado Plaza Hilton and El San Juan Resort & Casino, A Hilton Hotel, join the Caribe Hilton and Hilton Ponce Golf & Casino Resort.
“Hilton Worldwide has had a presence in Puerto Rico since 1949, when the Caribe Hilton in Puerta de Tierra was built. That was the first Hilton property built outside the continental U.S. that is still company-owned, and has since become an iconic symbol of Puerto Rico’s tourism,” she said.