DEVELOPMENT
SELLING A SLICE OF
PARADISE
By JEFF WEINSTEIN , EDITOR IN CHIEF
John Cohlan figured out some 25 years ago that emotions are easier to sell against than hard assets , and that a hospitality brand can thrive because it stands for a way of living that tugs on those emotions . That is the essence of Margaritaville Holdings , born out of a popular 1977 Jimmy Buffett song .
Today , it garners US $ 1.5 billion in annual sales , about one-third of that hotel-related , and 21 million guests from an ecosystem of consumer touchpoints ranging from restaurants and blenders to resorts , vacation homes and over-55 adult communities .
“ The reason we ’ ve been able to be in so many of these different businesses is that an emotion travels much more naturally than a product ,” says Cohlan , a former brand company executive who 22 years ago became co-founder and CEO of the Palm Beach , Florida-based business .
It is easy to compare Margaritaville , where flip-flops are stylish , to other hackneyed hospitality brands and believe that it will fade . But that belief is belied by companies like Pebblebrook Hotel Trust of Bethesda , Maryland , which recently acquired a 462-room independent resort in San Diego and is rebranding it as a Margaritaville property .
What started as a Key West , Florida , restaurant in 1987 now has 22 hotel-related projects including hotels , vacation clubs and homes and condos adding up to more than 11,000 rooms open . There are another 18 under construction ( almost 10,000 rooms ); nine in pre-construction ( 2,400-plus rooms ); and 20 under LOIs ( another 4,258 rooms ). Cohlan projects about 54 properties will be open within three or four years , including an urban resort in New York City , as well as projects in Nashville , Tennessee ; Nassau , Bahamas ; and Belize .
While Buffett and Cohlan own a controlling interest in the firm , it sold 30 % almost six years ago to private equity firm The Raine Group .
Of the more than US $ 5 billion in assets open or under construction , asset-light Margaritaville Holdings ’ investment is about US $ 3 million in key money and equity . Most deals are done via license agreements with services similar to a franchise such as central reservation ( 65 % of its business is direct ) and customer relations . Cohlan says the company can invest when
28 hotelsmag . com January / February 2020