Four Seasons Hotels
is getting closer to extricating itself from a hotel that has been a drag on its business.
The Toronto-based hotel company said Friday it expects to shed the lease and operating responsibilities at The Pierre hotel, a luxury Manhattan landmark, as soon as the end of this month.
Four Seasons said shareholders of 795 Fifth Avenue Corp., which owns the hotel, have approved Taj Hotels Resorts & Palaces to take over the lease and operation of the hotel.
Definitive agreements must still be signed. Based in India, Taj operates 60 hotels in Asia, Africa, the Middle East and the United Kingdom. Taj is a unit of the
Four Seasons has been trying to restructure or escape its lease on The Pierre. Company executives have said the lease and union labor agreements at the property are too costly.
The bulk of Four Seasons' revenue comes from managing hotels with its high-end brand, but it also leases and operates The Pierre and a Four Seasons hotel in Vancouver, Canada. Analysts blamed the leased properties for offsetting strength in Four Seasons' management business.
The company is also looking to get out of the Vancouver lease. Shares of Four Seasons were up $1.43, or 2%, at $74.64.