Room Service, Please

At a Philadelphia ceremony attended by Mayor Joseph S. Clark Jr. and other civic leaders last week, Sheraton Corp.'s President Ernest Henderson marked a notable corporation milestone. For the first time in its 16-year history, the world's second biggest hotel chain will build a hotel. The Philadelphia Sheraton, to be started this month, will be a $15 million, 900-room building faced in limestone, glass and metal ; it will be ready for occupancy by midsummer 1956. Construction will also start this month in New Haven on another new Sheraton, a 350-room hotel with a 180-car basement garage. Cost $5,000,000.

President Henderson has expanded a three-hotel combine into a $165 million string of 31 hotels, by buying such stately old structures as Boston's Copley Plaza and San Francisco's Palace, changing their names and, by more efficient chain operations, their profit picture. His latest purchase, for $5,000,000: Los Angeles' Town House, which Conrad Hilton sold to Oilman Roy Crummer in 1953. (Hilton will continue operating it under Sheraton ownership until next October.) The results of Sheraton's expansion have been so good that a share of Sheraton stock bought in 1939 is now worth more than 20 times as much after splits. Sheraton's latest six-month net: $7,000,000.

If it were not for financing help from local businessmen, plus favorable land deals in both Philadelphia and New Haven, Henderson would not even now be building a hotel. He thinks the cost per room is too high for the rates the traffic will bear. But in the next few years Henderson expects to see "a rash of new hotels" in the U.S. Says he: "With the population growth and the increasing patronage of hotels, the price per room tends to rise, and will soon reach a point at which a hotel builder can go in, do his own financing and make a profit." Henderson himself expects to build ten new hotels in the next ten years, and see Sheraton's assets grow another $100 million.

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