group purchasing, inter-city reservation system,
and other features, it is expected that the Jefferson's
well established record of earnings will be improved.
Beverly Hills Property Purchased
Negotiations were carried on over a considerable
period of time looking toward the leasing of a
modern, luxury-type hotel to be constructed by
other interests in Beverly Hills, California. The
transaction failed of consummation, but because of
the outstanding potentialities of the property it
was recommended to the board of directors that
it be purchased for future development.
A contract to purchase all the capital stock of the
corporation owning the property has been entered
into, at a price of $3,070,000. Of this amount,
$520,000 was paid when the transaction was closed,
with the balance due over a period of twenty years.
Minimum payments are at the rate of $100,000 a
year, commencing six years after the date of closing,
with interest on the unpaid balance ranging from
one per cent to four per cent per annum.
The property consists of approximately nine
acres, situated at the intersection of Wilshire and
Santa Monica Boulevards, in Beverly Hills. It is
considered the outstanding piece of undeveloped
property in that area, ideally situated for the construction of a luxury hotel at some time in the
Operations of the wholly owned subsidiary, Hilton
Hotels International, Incorporated, were broadened during the year. The executives of Hilton
Hotels International traveled extensively through
Europe and made thorough studies of the possibilities of developing new outstanding hotels in
major cities. Mr. Conrad N. Hilton, President of
Hilton Hotels Corporation, reviewed their findings
in a short European trip.
The first major project of Hilton Hotels International since it was formed in April 1948, was
the opening in December 1949 of the Caribe
Hilton, a 300 room hotel in San Juan, Puerto Rico.
This hotel, built and owned by the Puerto Rico
Industrial Development Company, a government
corporation, is leased for twenty years to our International subsidiary. Its operation in 1950 resulted
in revenue totaling $2,294,342 and net profits to
Hilton Hotels International of $128,877.
The success of the Caribe Hilton encouraged
your management to develop similar projects
abroad. A plan for our participation was developed
generally following the financial arrangement in
Puerto Rico under which land, building, furnishings and equipment would be owned by a particular country or its nationals, with Hilton Hotels
International taking a lease on the completed
hotel, assisting in the planning, furnishing and
equipping of the buildings, but with its chief role
that of operating and promoting the hotels. Our
financial participation is to be limited to the providing of operating capital.
In August 1950, a contract was signed to lease
and operate for twenty years a 400 room hotel to
be built on a 17 acre park in Mexico City at a cost
of approximately $6,000,000. It will be owned by
Manuel Suarez of Mexico City. In November
1950, a contract was signed to lease and operate
for twenty years a hotel to be built in Rome, Italy.
The 400 room hotel, to be named Albergo Dei
Cavalieri Hilton, is to be built on Monte Mario
overlooking the city of Rome at an estimated cost
of $6,000,000. It will be owned by Societa' Gene-
rale Immobiliare, an Italian company. In December, another contract was signed to lease and operate for twenty years, a 300 room hotel to be built
in Istanbul, Turkey. The hotel, which is estimated
to cost approximately $5,000,000, will be owned
by the Government of Turkey. Our financial participation in these agreements follows the basic
plan and is limited to operating capital.
Few hotels have been built in the United States in
the past twenty years, although the nation's population has increased by more than 30,000,000 in
PAID OUT IN EMPLOYEE BENEFITS
(Including payroll of personnel offices but excluding employees' meals)