World Watch: Ritz-Carlton Launches Reserve

The Ritz-Carlton Hotel Co. is launching a leisure-driven brand extension called The Reserve to compete with nonchains like Aman and private retreats like Parrot Cay. The Reserve will debut next year with the 125-room Molasses Reef, a Ritz-Carlton Reserve, on 600 acres (243 ha) of what has been an uninhabited island of The Turks and Caicos Islands.

By Staff -- HOTELS Magazine, 5/1/2007

NORTH AMERICA: Ritz-Carlton Launches Reserve Brand

CHEVY CHASE, MARYLAND The Ritz-Carlton Hotel Co. is launching a leisure-driven brand extension called The Reserve to compete with nonchains like Aman and private retreats like Parrot Cay. The Reserve will debut next year with the 125-room Molasses Reef, a Ritz-Carlton Reserve, on 600 acres (243 ha) of what has been an uninhabited island of The Turks and Caicos Islands. The property will feature low-density, intimate oceanfront cottages, spread over a half-mile of beach, and try to cater to small retreats as well as destination weddings. By 2009, Ritz-Carlton Senior Vice President Ezzat Coutry hopes the hotel generates an average rate of US$650.

“We have similar destinations we hope to develop,” says Coutry, who wants to develop one or two more properties in the Caribbean and a few in Asia with characteristics similar to islands like Tahiti and Mauritius. “This is not something I am going to put in Florida or the Carolinas,” he says.

The Molasses Reef property will include a large marina, 136 estate homes and some 70, 3- and 4-bedroom condo-hotels to be built by a local developer and put into a rental pool. Real estate prices begin at US$2.7 million. The hotel will open fi rst with rooms that should cost an estimated US$750,000 per key, complete with at least 650 sq. ft. (60 sq. m) of space, outdoor showers and other outdoor amenities.

The Reserve brand will be distinguished from other Ritz- Carltons by offering guests a more relaxed, casually elegant atmosphere; and an even greater level of individualized service through a higher staff to guest ratio. “It is also being designed in a way that allows for extreme privacy or to be part of group,” says Coutry.

The idea for The Reserve germinated three or four years ago, according to Coutry, when he saw destinations where typical Ritz-Carltons wouldn’t work. “As we saw competitive products, we knew we were not in that group,” he says. “About 125 rooms are adequate because we can still do food and beverage, as well as spa.”

AUSTRALASIA: Stella Group Moves On Protea, Readies For Spinoff

BRISBANE MFS Ltd.’s travel services and hospitality group, Stella Hospitality Group, in March took a giant step toward international expansion with its US$211 million buyup of Protea Hotels, Cape Town. The deal puts Protea’s 126 hotels in 13 countries into Stella’s fast-growing portfolio. It also gives Stella a substantial platform in Europe.

“When the transaction is complete, Stella Group will be an integrated travel services provider across Australia, New Zealand and Africa. We also will have broad exposure to Europe through a signifi cant holding in Golden Tulip Hospitality,” says Rolf Krecklenberg, managing director, Stella Group.

David Gibson, CEO, Asia Pacifi c, Jones Lang LaSalle Hotels, Brisbane, analyzes the deal: “Protea will benefi t from being part of a larger group due to economies of scale as well as global exposure. Stella will benefi t from what is reported to be a very good development pipeline for Protea.” Nine hotels will open in the next 12 months; several other projects are rumored to be “on the table.”

The deal comes hard on the heels of a series of portfoliobroadening acquisitions. Three weeks earlier, MFS Ltd. settled the US$99 million purchase of the 14-property Australian and New Zealand operations of Hawaii-based Outrigger Accommodation Group.

Working toward expanding its lead as a vertically integrated travel company, MFS merged with S8, Australia’s largest travel products distribution business. In addition to its travel businesses, the deal includes a joint venture with UK-based Virgin Travel that manages the letting of more than 5,000 apartments in 48 resorts—a major complement for Stella Resort Group’s pool of holiday and apartment accommodations in Australia and New Zealand. That builds on the buy-up of the Saville Hotel Group, with its 11 apartment-style hotels.

MFS plans to leverage this aggressive pace with a spin-off for the Stella Group as early as this summer. In early April the group announced that it appointed UBS Investment Bank and Grant Samuel ‘to assist in seeking a partner” to support the group’s growth. Sources say the price tag may be around US$999 million for a 50% stake.

ASIA

UOL Gobbles Up Pan Pacific Brand

SINGAPORE Real estate investor UOL Group has acquired Pan Pacific Hotels and Resorts and its 12 branded properties from Tokyu Corp. for SG$6.5 million (US$4.3 million).

The deal, which nearly doubles the size of the Singapore-based owner-operator’s portfolio, brings Pan Pacific into the fold as a subsidiary of UOL. The deal gives UOL (United Overseas Land) another premium brand name to complement its slate of 13 upscale properties, including five Parkroyal hotels. “Strategically, the acquisition provides us with a distinct two-tier structure that will enhance both the Pan Pacific brand and the Parkroyal brand,” UOL President Gwee Lian Kheng told the Business Times of Singapore.

The acquisition gives UOL its first hotels outside of Asia Pacific, with four North American properties. But it is Pan Pacific’s prestige properties in Asian gateways that likely made the package attractive. Besides Kuala Lumpur and Singapore, where UOL already owns properties, the acquisition includes hotels in Bangkok, Chiang Mai, Manila, Yokohama, Jakarta and Dhaka.

The deal adds some 3,800 rooms to the UOL portfolio, giving the company about 8,900. In addition to Parkroyal, other flags on UOL properties include Sheraton, Sofitel, Novotel and Crowne Plaza.