MARGARITAVILLE HOLDINGS HAS CREATED A MULTI-TIERED LIFESTYLE HOSPITALITY COMPANY THAT TRADES ON EMOTIONS . ITS CEO BELIEVES THERE IS A LONG RUNWAY AHEAD . and where it needs to but prefers to continue its current tack . It is starting to franchise , with its Compass by Margaritaville limited-service brand , and plans to franchise most of its resort concepts going forward .
Margaritaville also has a 60-unit restaurant arm and lifestyle products including apparel , footwear , blenders , home décor , a satellite radio station and more . The brand ’ s F & B lines include tequilas , rums , LandShark Lager and a cookbook . It sold the free-standing restaurant business to its South American licensee , International Meal Company , while retaining the right to develop and operate the restaurant brands independently at its lodging destinations .
Jon Bortz , Pebblebrook ’ s chairman , president and CEO , says his team was impressed with Margaritaville ’ s property-level performance and RevPAR share , the creativity of the group and brand development .
“ Their push is , and I believe it , is that they are the only natural lifestyle brand ,” Bortz says , adding that Pebblebrook is open to partnering on additional Margaritaville developments . “ They are a lifestyle brand in the eyes of their customers , which is all that matters at the end of the day . So the
Margaritaville Hollywood Beach Resort , Florida customer seems to have bought into the concept , and we find that pretty impressive for a tiny organization .”
What also impresses Bortz : the expected return on Pebblebrook ’ s US $ 35 million renovation investment in San Diego . “ We believe investment yields will be in the midteens or better at stabilization ,” he says .
DELIVERING THE BOTTOM LINE A big part of what makes Margaritavilles so attractive to owners — one of whom is developing its fifth property — is ADR and F & B volume , which Cohlan estimates at 30 % to 40 % of gross operating profits . The 349-room Hollywood property gets close to 50 % of its business through F & B . Cohlan says more typical hotels are 25 % to 30 % F & B driven , not surprisingly , by alcohol sales . “ There is a lot of added value ,” he says .
Current average rate is around US $ 250 ; in Hollywood , Florida , it runs over US $ 300 . “ People are really prepared to pay for an experience . Experience is a term that is way over-used in the industry . I think we actually really deliver it ,” Cohlan says , adding that same-store sales were up 9 % in 2019 .
Everything on the business ’ s lodging side has been driven by the game-changing Hollywood property , Cohlan adds . “ People came , developers walked through it , and they said , ‘ I want one .’”
To keep the brand current — it ’ s based on a song from 1977 , after all — the company developed a college ambassador program on close to 300 campuses . “ We passed that point where , ‘ Oh , is this something that ages out ?’” Cohlan says , adding that when consumers hear the song “ Margaritaville ,” they ’ re tapping into their own set of experiences . “ What we ’ re doing is harvesting that .”
Cohlan also leverages the company ’ s experience and ability to execute on F & B . “ We have about seven of our own food and beverage brands , so we can say to our hotel owners / partners , ‘ What type
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