Barry Sternlicht, chairman and CEO of
Starwood Capital Group and a man well-known for innovation in the
hotel business, has stepped up once again with a new hotel brand
designed to stand out in its class.
Baccarat Hotels and
Resorts, announced last week, takes its name and focus on quality
from the crystal maker, in which Starwood Capital holds a majority
interest.
The chain will
launch with the Baccarat Wailea, slated to open in Hawaii in 2010.
It will consist of 193 condominium homes ranging in size from
980-square-foot one bedrooms to 3,330-square-foot four
bedrooms.
The Baccarat Wailea
will have no traditional hotel rooms. Baccarat will furnish the
units and, when condo owners are not in residence, rent them to
travelers through GDSs and other standard distribution
channels.
Plans also call for
developing Baccarat hotels in the Caribbean, Europe and Asia, with
between 80 and 250 units per property. Aside from Sternlicht's
remark that the properties would be positioned in "some of the most
breathtaking locations around the world," Starwood Capital released
no details about future locations.
It is becoming
common for operators of high-end hotels and resorts to include
residential components (see related story, "Condos, vacation rentals low on priority list with
travel agents"). Baccarat's Hawaii venture takes the
hotel/residence ratio to the far end of the spectrum, but Starwood
Capital spokesman Tom Johnson said the ratios at future Baccarat
properties would vary by location, and that some might include no
condos.
He said it was
Baccarat's preference that all properties be new-builds, as those
already on the drawing board are.
Emphasizing the
value of the brand, Sternlicht said, "Baccarat Hotels and Resorts
will personify the pride and impeccable attention to detail that
has made Baccarat one of the world's select few names that define
and shape luxury."
Baccarat Hotels and
Resorts is the third Starwood Capital brand announced in the last
18 months. In January 2006, Sternlicht purchased the Hotel de
Crillon in Paris and announced plans to create the Crillon luxury
chain. Last October, he created 1 Hotels & Resorts, which he
positioned as an "ecoluxury" brand.
With Baccarat, he
continues a trend that has seen hotel companies link up with brand
names associated with high style or luxury goods. In 2001, Marriott
formed a joint venture with Bulgari SpA to launch the luxury
Bulgari Hotels & Resorts (two have opened, in Bali and
Milan).
The Versace Group
launched Palazzo Versace in Australia. A second, set for Dubai,
United Arab Emirates, is in the works. Giorgio Armani is developing
branded hotels, with the first also set for Dubai.
These are some
high-powered brands, but can they translate successfully into hotel
businesses?
Adam Weissenberg,
vice chairman of the Tourism, Hospitality and Leisure division for
Deloitte & Touche, said the established brands had value that
could pay off for partners in a new venture.
"Customers
associate them with quality," Weissenberg said. "So right off the
bat, [a new hotel] has a perception of luxury and quality. The
brand has a built-in customer base."
Milton Pedraza, CEO
of the New York-based Luxury Institute, which conducts research on
luxury brands, said a successful crossover depended on whether the
name could evolve into a lifestyle brand.
For example, he
said, Armani already represented more than just fashion and could
"translate well" into the hotel business because "its heritage has
been expanded logically and intelligently."
He said Baccarat
also "may pull it off," noting that the business had previously
diversified with lighting and other high-end products for the home,
so its name could be understood as a lifestyle brand.
With such rich
prospects, one may wonder why there aren't very many hotels called
Bulgari, Versace or the like already open.
"The cost to build
a luxury hotel as a standalone property is harder and harder to
justify," Weissenberg said, so most future high-end properties will
include residential and/or retail components.
Luxury properties
naturally take longer to build than midscale properties, he said,
but the time lag is still longer when a mixed-use facility is in
the works because all planned components have to work.
As a result,
Weissenberg said he was not surprised there were so few properties
with the high-visibility brands.
The delays don't
mean they are unsuccessful, he said, and if each group only opened
five or 10 "at that brand level, it would not be so
odd."
To
contact the reporter who wrote this article, send e-mail to Nadine
Godwin at [email protected].