Global Update: World Watch, May 2007

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, 8/1/2007

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 August be around US$999 million for a 50%

stake.