COVER STORY
The Peak View Suite at Montage Deer Valley in Utah .
The lobby inside Montage Los Cabos in Mexico .
early mover in that we could be ultra luxury but with a different approach ,” Fuerstman said .
This was shortly after 9 / 11 and Fuerstman believed there was an opportunity to pick up luxury assets at a discount . This was one of very few faulty calculations by Fuerstman . Though the hotel industry was reeling in the wake of 9 / 11 , banks were not taking assets back . Fuerstman quickly and assiduously pivoted to newbuild opportunities , finding developers for which ultimately became Montage Laguna Beach and Beverly Hills . It was a fortuitous move : starting a new brand with a new asset is far better than beginning a brand with what ultimately is a retread of something else . ( The Montage name , in fact , pays homage to the artist colonies in and around the Laguna Beach area .)
Ohana Real Estate , which Omidyar founded , currently owns two Montage hotels , Deer Valley and Los Cabos . In November 2022 ,
Chinese insurance company Dajia Insurance Group sold the 259- room Montage Laguna Beach for a record $ 641 million , or about $ 2.47 million per key , to Houston Rockets owner Tilman Fertitta . For comparison , Ohana sold the asset to Strategic Hotels & Resorts for $ 360 million back in 2015 .
As Fuerstman put it : “ Our asset owners have done very well .” The current Montage roster includes seven hotels with one on the way : Montage Laguna Beach , Montage Deer Valley , Montage Kapalua Bay in Hawaii , Montage Big Sky in Montana , Montage Healdsburg in California wine country , Montage Los Cabos in Mexico , Montage Palmetto Bluff in South Carolina and the upcoming Montage Cay in the Bahamas , opening next year . ( In 2020 , Montage Beverly Hills was sold and the new owners folded it into the Maybourne Hotel Group as the Maybourne Beverly Hills .)
All Montage properties include a residential component , something that is an economic necessity .
“ Branded residences are a critical component . There would have been no Montage Laguna Beach without it ,” Fuerstman said . Development costs of luxury hotels are astronomically high ; the sale of residential units makes the economics work . “ It ’ s part of our DNA ,” Fuerstman said .
Operating ultra-luxury hotels takes a village . And when you charge premium rates , which can reach well over four figures per night , you better have a very high value proposition . Unlike select-service hotels , where , especially during the lean days during the pandemic , you can cut back on some items or services to reduce expenses , at the high-end of the market , it ’ s not an option . Guests expect the moon for the money they are shelling out . “ As you increase rates , and we ’ ve seen with inflation that hotel rates have gone up , we have to remember the value proposition , so , for instance , we don ’ t cut live entertainment because we think that ’ s an important component of the luxury offering ,” Fuerstman said . “ It ’ s expensive , but we think that ’ s driving more business . We don ’ t spend for the sake of spending . We do it because it ’ s something that our guests appreciate and effectively pay for .”
As expected in an ultra-luxury branded experience , food and beverage and other ancillary offerings , like a spa , play a huge dayto-day role . They are typically lower-margin businesses , but at the ultra-luxury level , they are table stakes . “ We can ’ t look at it just as a margin ,” Fuerstman said . “ We aren ’ t taking the margin to the bank . We look at it as how much much profit are we generating per room and that ’ s a better marker of success .”
A SIBLING IS BORN Still , it ’ s a hard , expensive business . In 2014 , Fuerstman put forth a new brand called Pendry Hotels & Resorts , which he considers to be “ contemporary luxury ” that contrasts and doesn ’ t cannibalize from Montage . Styles of service are similar between the two brands ,
74 hotelsmag . com June 2023