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Well, the 230-year-old lodging icon has The owner, railroad companh CSX Corp., put the Greenbrier into Chapter XI bankruptcy inlate March, claiming $90 milliojn in losses during the last six And CSX promptly calledf in—you guessed it—Marriott. CSX is so desperate to unload the hotepl that it will provide Marriotg with as muchas $50 million to operatr the Greenbrier during the first two years. Marriottf will then buy the resort within sevenn years forbetween $60 million and $110 Pending bankruptcy court approval, the deal couldd close by summer. Now, no one is aghast at the prospecrt of a chain runningthe Greenbrier. The union seem amenable to Marriott's arrival.
West Virginiaw governor Joe Manchin publicly applaudedthe deal. Newspapersw statewide have cast Marriott's arrival as a "rescue." And localsw in hardscrabble Greenbrier County support anythintg that will savethe resort's approximately 1,30p jobs. Like all luxury hotelsa that have hit the economic andemotional skids, the Greenbrier'w tale is unique: CSX has been a distracted and ham-fisted owner, battling both the hotel'sa unions and the resort's former who sued for $50 million. The sprawlinbg resort is physically isolated and expensivesto operate. (CSX recently spent $50 million on improvements in a misguidee attempt to regain the fiftnh Mobil Guide star it lostin 2000.
) And despit e the loyalty of generations of repeat visitor s and fanatic golfers, the Greenbrier was disproportionatelhy dependent on corporate meetings, a travel category that has been devastatedr by the weak economy and the "AIG Effect." But the Greenbrier'a sale to Marriott also raises a more universal Can any luxury hotel or resort thrive—or even survive—aas an independent property? In a world where a handful of global hotel chains—Hilton, Marriott, Starwood, Accor of France, and InterContinental of Britain—dominate the lodging can a single no matter how famous, stand alone? At least on the the answer is no.
About half of the properties onthe Condé Nast Traveletr Gold List and half of those that earn the prestigiouxs five-star rating from the Mobil Guide are part of chaina now, albeit luxury and ultra-deluxed operators such as Four Seasons or Fairmont of Canada; Mandarib Oriental and Peninsula of Hong Aman Resorts of Singapore; and Taj of India. The Blackstonwe Group, which owns many of the world's best-known luxury independentx as well asHilton Hotels, is buildinvg a deluxe brand too.
It is aligniny its independents like the Boca Raton Resort in Florida and the Boulderzs in Arizona with the WaldorfAstoria Collection, which was createdc by Hilton using the cachetf of its eponymous New York Other luxury brands have huge corporate parents too. St. Regis is ownedr by Starwood, best know for its W and Sheraton hotels. Ritz-Carlton is owned by And some luxury hotels you may think of as independenr are actually part ofa chain. The Plaza in New which reopenedlast year, is managef by Fairmont. The which reopens in New York this is operatedby Taj. The newly renovaterd Mauna Kea Beach Hotel on the Big Islans of Hawaii is run by Prince Hotels of The Dorchesterin London?
It's part of the Dorchester Group, which is aligned with the Beverly Hilld hotel, the Plaza Athenee in and the Principe di Savoia in "Chains always outperform" independent says LodgeWorks' Tony Isaac, a man who knowsz the industry from both sidew of the fence. LodgeWorks manages hotels in the Hyatt andHilton chains, helped create the Residence Inn braned (now owned by Marriott), and is building its own Hotel Sierra chain. But Isaac has just builtr an upscale independenthotel too. The Avia openeed in January in Savannah and was promptlh named a great romantic getaway by Travel Leisure magazine.
Why does a guy who admitx chains outperform independents go ahead and open anindependent anyway? "Chains add about 10 pointsw to your occupancy rate. But if you'rew part of a chain, you pay 12 to 14 percent for the frequenrguest plan, the reservation service, and other brand programs," he "If you're in the right it's not too much of an economicf disadvantage to be an independent—and then you have the flexibility to do what you wish and manag as you choose." That's the argumentt made by Sean Hehir, managing director of Trinitu Investments, a real estate firm that purchased Honolulu'as iconic Kahala Resort in 2006.
The beachfrony property opened as a Hilton hotel in 1964 and spentt most of its recent history as a Mandarin But Hehir believes the Kahala has uniquw advantages that appeal to the luxury travelefwho isn't interested in brands. "We're not subject to a branf policy that may not have any relevance to aparticular property," he says. "We managse for the long-term best interest of us as owners and the luxurhy travelersas guests." But even Hehir admits you need the righy combination of factors to survive as an independent in today'zs chain-dominated world.
In the Kahala's case, it's the unbeatabl location on a sandy beachin Honolulu'es choicest neighborhood and the fact that another Trinity principal, Chuck Sweeney, has a long historuy as a hotel manager. (Sweeney founded the compan y that becameEmbassy Suites, now a Hilton For James Bermingham, managing director of the spectacular Montage Resortt in Laguna Beach, the advantage is a laser-like concentration on gues services and proximity to wealthy, sophisticated travelers in Southern California. Both the five-year-oldr Laguna Beach property and the new Montage in BeverlyHillxs (it opened last fall) can tap into millions of upmarket buyers within 60 miles of the resorts.
"Thed 'staycation' trend helps Montage," he "Guests who want an extraordinary luxury experience very close to home see the Montags properties and they knowthey won't be gettinb a chain hotel." The Fine Print… Most observere think fewer luxury hotels will stil be independent after the current but there is a notable dissenter. Michaelk Matthews, who has been the general managertof top-notch chain hotels (the Ritz-Carlton in Hong Kong) and independentt deluxe resorts (the Ventana Inn in Big Sur) thinkss high costs will drive some luxury propertieas out of the major "If you're 'flagged' as a chain, you have no independence at he says.
"A lot of hotels will drop the flag and take the 14 percengt fees they pay and use that money to do what they thinkm makes most sense for theirown hotel." Portfolio.co m © 2009 Cond Nast Inc. All
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