CONFERENCE REWIND
Turtle Bay Resort transitioned to The Ritz Carlton O ’ ahu , Turtle Bay in July 2024 .
Marriott International . “ Luxury has proved so successful and that ’ s what is getting financed .” Branded residences attached to a luxury project assist further in that ; in fact , few luxury developments lack a residential element . Sixteen Marriott brands have branded residences . There is even a Marriott recognition program exclusively for branded residence owners and separate of Bonvoy called Onvia .
Residences attached to a hotel brand have become so popular that IHG is doing a standalone Regent residence in Dubai . Regent Residences Dubai - Sankari Place in the Marasi Marina neighborhood will include 63 units as well as 10 floating homes . “ There is insatiable demand from consumers for branded residences ,” Green said .
It ’ s not only gateway markets where luxury development is happening , Poulos said . " Secondary markets and emerging markets are also working for luxury ," she said , citing Six Senses La Sagesse Grenada as one example .
Marriott struck gold of late in the luxury space on the conversion side , which has been another post-pandemic theme for lodging company expansion due to the
relative dearth of new construction starts . Three notable recent deals include Pelican Hill in Newport Beach , Calif ., which will become a St . Regis at a later date ; the former Conrad Midtown in New York now The Luxury Collection Hotel Manhattan Midtown ; and Turtle Bay Resort in Hawaii , now rebranded as The Ritz-Carlton O ’ ahu , Turtle Bay and owned by Host Hotels & Resorts .
“ With rates and construction costs where they are at lower loan-to-cost [ values ], conversions are an attractive opportunity ,” Jacobson said .
Host Hotels & Resorts , a real estate investment trust that owns hotels , has 80 total hotels and Bryan Thrush , 1st VP of development , design and construction , said luxury properties in its portfolio are the top performers . Thrush said that Host ’ s strategy when it comes to acquiring hotels is to look for markets that have high barriers to supply growth and newer properties that entail less CapEx spend .
REITs , Green said , used to have an aversion to building out portfolios heavy with luxury assets due to their risk profile and challenges through downturns because of their expense composition : operating luxury hotels and resorts is expensive . Now , he said , there is more institutional money investing in the space and the risk profile has changed . “[ The composition ] of invested capital has changed ,” he said .
RUNNING WILD Operating luxury hotels takes a village — quite literally — where the hundreds of employees who clean the rooms , wait tables , tend bars , check guests in and out , maintain the grounds , work the retail stores and operate the spas and golf courses oftentimes live on or close to the property in living quarters provided by the hotel . It ’ s a lot of people and the cost to pay them continues to grow , particularly as many municipalities seek to enact laws to increase minimum wages .
Host Hotels provides workforce housing at the Four Seasons Jackson Hole in Wyoming , for example . “ Labor rates and overall costs are increasing ,” Thrush said .
The bright side is that higher revenue can give cover to growing costs . “ Luxury has always been challenging ,” Green said , noting the operating risk . “ It ’ s gotten better in the past five years because the revenue side has gotten better .”
12 hotelsmag . com Oct / Nov 2024