Bermuda is undergoing one of the most
dramatic changes to its lodging product in history, with $1.6
billion already committed to hotel investments and possibly a lot
more to come.
Some of the
best-known names in hospitality are either committed to or looking
at, Bermuda. These include Ritz-Carlton, Hilton and Jumeirah, and
investors are seeking to lure other well-known brands to the
island.
Cherie Whitter,
director of the Bermuda Dept. of Tourism, said that most resort
investment is on the high end because it happens to be a good time
to invest.
"We have ...
arrested what we believed was a decline; we had lost inventory as
well as air arrivals," she said. "But now we are seeing a
reinvestment in existing product and ... interest from
investors."
Bermuda's hotel
inventory has slipped to 6,000 rooms, but current projects might
build that number to 10,000 in a few years, according to
Whitter.
She noted that
existing properties that had not previously invested or reinvested
are now doing so. One reason, she said, is that the island's
recently amended Hotels Concession Act provides tax advantages to
properties spending $1 million or more on upgrades.
In the most
recent news, a group of investors has taken over the Wyndham
Bermuda Resort & Spa. It will close Oct. 31 for a massive
renovation, to reopen as the five-star Southampton Beach
Resort.
Like other new
properties, it will offer a combination of luxury hotel,
condo-hotel and fractional ownership accommodations.
Another luxury
resort, Tucker's Point Hotel and Spa, will be a $100 million,
103-unit "hybrid hotel" involving unit ownership. Built around the
former Castle Harbour Hotel, it is slated to open early in 2008.
Whitter said Tucker's Point will be Bermuda's first new luxury
hotel in more than 35 years.
The resort will
set rates of $600 to $2,000 a night for guest units, 40% of which
will be suites.
Hilton Grand
Vacation Club is building a $170 million vacation ownership resort
at the Ariel Sands resort, owned by the family of actor Michael
Douglas. The development will include 10 buildings, with 60 two-
and three-bedroom suites.
Fractional
ownership development Newstead Belmont Hills is undergoing
renovation, with 100 rooms operational by next year.
According to
Whitter, Ritz-Carlton is in the "early stages" of developing a
business hotel in Hamilton. And in a recent speech, Ewart Brown,
who resigned last week as minister of tourism to run for premier of
Bermuda, said other luxury brands, including Four Seasons, St.
Regis and Regent, are in various stages of talks and
deals.
Whitter also said
representatives of Dubai luxury developer Jumeirah met with her
recently to discuss acquiring an existing property.
While most new
development will be on the luxury end, travelers who prefer to pay
less will have many options at more affordable cottage colonies and
small hotels.
"We have and will
maintain substantial inventory in the mid-range," Whitter
said.
The challenge is
to maintain or even grow arrivals while inventory goes offline for
redevelopment.
The Wyndham
closing will temporarily remove 400 rooms from the island's count.
"We hope some of those go to the smaller properties as we add
rooms," said Whitter. "It will be a balancing act."
To contact reporter Harvey Chipkin, send e-mail to [email protected].