Founded in 1987 with a Key West restaurant, Margaritaville Holdings is in the midst of a lodging-expansion push. Named after Jimmy Buffett's 1977 hit song, the company opened Florida's Margaritaville Hollywood Beach in September and will have more than doubled its number of resorts between then and next year, when it opens the first phase of the $750 million Margaritaville Orlando resort project. The company also added its first Margaritaville Sea Experience on Norwegian Cruise Line's Norwegian Escape last November. CEO John Cohlan spoke with senior editor Danny King.
Q: How has the Hollywood Beach resort performed?
John Cohlan
A: Hollywood is a game-changer for us to a large extent because it's directly on the sand, and it's in South Florida. It's performed well ahead of budget, and the (average room rate) is significantly above what it was projected to be. Occupancy is running in the 90s. And what's really exciting from a business standpoint is it's almost unprecedented in the percentage of direct bookings.
Q: Is it challenging to market Margaritaville as a resorts operator because of all the other business ventures?
A: We're in the hospitality business as well as the restaurant business. We're in the beverage business with LandShark Lager, and we're in the lifestyle business with clothing and footwear. I think there's an enormous advantage because it's so consistent. Everything we do is based on the DNA of our brand, and our brand is basically a state of mind, and that state of mind is paradise. So if you like the feeling you get from Margaritaville when you experience it in all of its other applications, the "on steroids" experience is coming to the resort. The challenge is delivering on those expectations. When people walk into a typical hotel brand, a Marriott, you expect a clean room and nice service. Here, you're expecting something more.
Q: How do you broaden your appeal to a younger demographic when the song "Margaritaville" came out in 1977?
A: We have somewhere between 10 million and 15 million people a year who go through our physical establishments, and a lot of those people aren't baby boomers. You have to think of Margaritaville as a cultural synonym for paradise, so it's not about, "Oh, I'm 25, I don't know this song." It's transcended generations.
Q: Why the onboard Sea Experience with Norwegian?
A: We've already been at many of the ports for many years with the Margaritaville restaurants, and the cruise ship passenger has demonstrated loud and clear that when he gets off that ship, he wants to go to Margaritaville. So we've taken it one step further with Norwegian, and it's been a great relationship.
Q: Are you concerned with overexpansion, especially as overall room supply rises?
A: Our proposition is very unique. When you want to go on vacation, you might not really want to go to a Hilton or Hyatt or Marriott. There's something generic about that. So for us, we do a few properties a year. The macroworld is relevant, but it's a little less relevant because ours is such a unique proposition, and from a market-share standpoint, we're relatively small.
Q: How involved is Jimmy Buffett?
A: He's got a day job, but he loves everything we do. He loves the resorts. Hollywood's in the neighborhood, so he certainly is there often, and he likes to do it unannounced.