Tag: luxury hotels

Salamander Hospitality Quickly Expands Its Luxury Portfolio

It’s been quite a busy month for Sheila C. Johnson and her hospitality company.

Yesterday Salamander Hotels & Resorts announced that it has taken over management of Reunion Wyndham Grand Resort near Orlando in Kissimmee and Hammock Beach Resort in Palm Coast, and with its recently renovated Innisbrook Resort near Tampa in Palm Harbor, has united the three properties to form Grand Golf Resorts of Florida.

The new group of resorts offers 162 holes of golf designed by Jack Nicklaus, Arnold Palmer, Tom Watson and Larry Packard. Grand Golf Resorts of Florida also features the only resort-based ANNIKA Academy, an innovative teaching facility designed and developed by Annika Sorenstam, who attended the announcement event.

Salamander also unveiled what it has dubbed the Legends of Golf Trail, which essentially is the route between the resorts and across Florida, and plans to introduce a new Grand Membership program that includes club benefits for all three properties, beginning with the 2012 season.

In early October, the Virginia-based Salamander was selected to manage Sanctuary Cap Cana in the Dominican Republic. The $110 million, 176-suite property is in the process of being converted from an all-inclusive, couples-only resort to a traditional a la carte property, with plans to begin welcoming new guests and families in December. All current reservations are being honored during the transition.

The Sanctuary joins two other resorts in Salamander’s newly formed Grand Resorts at Cap Cana collection, which includes the Fishing Lodge Cap Cana, a 298-villa property currently scheduled to open on Nov. 3, and the Ocean Club Cap Cana, a 113-room boutique hotel, due to open in 2012. Managing Director Hendrick Santos, who spent 19 years with Hyatt Hotels Corporation, is overseeing the collection.

Salamander was launched in 2005 by Johnson, who was a founding partner of BET and who currently has ownership in three professional sports teams: the WNBA’s Washington Mystics, the NBA’s Washington Wizards and the NHL’s Washington Capitals. Additional properties in the company’s portfolio include the five-star Woodlands Inn near Charleston, S.C., and the Salamander Resort & Spa, a 340-acre equestrian-themed resort that will have 168 guest rooms and suites and a cooking school. The property is currently under construction and due to open in 2013 near Washington, D.C., in Middleburg, Virginia.

Photo: Fishing Lodge at Cap Cana/Salamander

Related post:
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AIG Effect Hits EU, Impact Felt in New York

An austerity drive sweeping through Europe is putting a spotlight on the lavish lifestyles of top officials and big organizations, and New York is feeling the impact as the go-to destination for these big spenders.

EU Parliament

EU Parliament

The European Commission stands accused of spending more than €7.5 million (US$11 million) on private jet travel, luxury resorts, parties and handing out expensive Tiffany jewelry to guests.

But the one story that’s getting all the attention in the European news media is a $41,000 bill for a four-night stay at the Peninsula Hotel in New York by EU President José Manuel Barroso.

Barroso had come to New York for the General Assembly of the United Nations. The European Commission has a convenient explanation for the huge bill—it’s New York’s fault.

In response to a question raised in the European Parliament, they said that luxury hotels in New York jack up their rates when a big event like the U.N. General Assembly brings in hundreds of large international delegations.

Then there’s the hotel maid incident involving IMF chief and French politician Dominique Strauss-Kahn and another one involving an Egyptian businessman that have made luxury New York hotels like the Sofitel and Pierre infamous.

One of the side stories of the DSK incident is a spotlight on the opulent lifestyles of IMF officials. DSK was staying in a $3,000 luxury suite at the Sofitel, and questions were raised in France about who’s paying for it. Considering the IMF’s role as a global banker for distressed nations, it’s a particularly bad situation.

Coupled with the Greek bailout crisis and a £10 billion (US$14.65 billion) government waste cutting plan underway in the United Kingdom, these incidents have the makings of a full-blown AIG Effect where officials and corporate executives get taken down by the media and public for spending too much.

The BBC, for example, is taking heat for booking 200 rooms in 14 luxury hotels for the Glastonbury Festival. In London, civil servants have apparently spent £25 million (US$36.63 million) on credit cards for late-night pizzas, iPads, snowmobiles and…luxury hotels.  The total travel bill came to £3 million, of which £1.5 million (US$2.47 million) was for luxury five-star hotels all over the world.

The fear of a media take-down will curtail heavy spending by high-profile European travelers when they come to Washington, D.C., and other U.S. cities, but the biggest impact will be felt in New York. Four of the top international tourism markets into New York are European, with the United Kingdom on top, with more than one million visitors each year.

Photo – CGP Grey

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Luxury Segment Gets Up Off the Mat

The U.S. Hotel Industry is witnessing a strange phenomenon – the badly beat up luxury segment is leading the recovery with off-the-charts occupancy and RevPAR growth.

According to STR data, luxury segment occupancy for the month of March grew 12 to 14 percent, as compared to a US occupancy growth of 5 to 7 percent. Luxury RevPAR was up 8 to 10 percent, with US Revenue per available room limited to a 3 to 5 percent growth.

U.S. Hotel chain scale segment performance, March 2010

U.S. Hotel chain scale segment performance, March 2010

And the trend continues in April. While national trends nosedived for the week ending April 3, luxury segment occupancy was up 2.2 percent to 62.8 percent, ADR rose 1.7 percent to US$254.52, and RevPAR increased 4.0 percent to US$159.78.

In addition to trade-ups, the squeeze on the supply pipeline all through last year is another factor fueling the growth. According to research firm Lodging Econometrics, developers postponed or cancelled 43 luxury hotels in the first nine months of 2009, totaling about 9,300 rooms in the US and the Caribbean.

 As for the future, there’s plenty of evidence to support both caution and bullishness – short-term bullishness and long-term caution.

The Ernest & Young Global Hospitality Insight report (pdf) released last month quotes Bjorn Hanson, an associate professor of lodging at New York University, as saying that “I think we’re looking at 7 to 10 years before luxury can get back to where it used to be.”

In the same report, Edouard Ettedgui, CEO of Mandarin Oriental International Ltd. says that “We may be able to raise rates again in 2011, but it’s optimistic to think that that may happen at the beginning of that year.”

This seems to be about right, with STR data and forecasts showing a strong recovery in the 2nd and 3rd quarters in 2010, followed by a slowdown in growth in the last quarter and in early 2011. Group business won’t be back until 2012 or 2013, and even when it does come back, it won’t reach pre-recession highs in the next few years.

But this cautious view isn’t stopping new players from wading in. The parent company of Louis Vuitton just announced its entry into the hospitality sector via the ultra-luxury end of the market, with two exclusive Cheval Blanc brand hotels in Egypt and Oman.

Investors also seem to be waking up to opportunities in the luxury segment. The owners of the Fairmont chain announced the sale of a 40% stake this week in a deal valued at $847 million.

Saudi billionaire Prince Al-Waleed bin Talal, who offloaded part of the Fairmont Raffles stake held by his investing company Kingdom Holding, also announced plans for an IPO to take Fairmont back into public ownership.

The reception for new luxury properties also has improved dramatically. The  Trump SoHo opened its doors in New York on April 9, 2010 fully sold out for the opening weekend, and expects to hit rates of $500 by fall this year. Year-on-year, New York’s occupancy rate has jumped 22.3 percent, and stands at 87.0 percent as of now.

In summary, short-term sentiment regarding luxury hotels is rosy for the next few months, but don’t bet the house on it. The real – and permanent – recovery in the luxury segment won’t begin until this time next year.

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