Sunday, February 25, 2007
I've been wondering when the backlash against overstyled, underserviced boutique hotels would hit -- looks like it's happening now. You'd think companies like Starwood and Westin would've figured out decades ago that service is key, but I guess that's not a lesson even billion-dollar hospitality conglomerates can easily internalize.
I'm curious to see how this new lower-priced boutique hotel trend pans out, particularly given that that's one of the models I'm considering launching myself. My problem with ideas like NYLO's "exposed brick and polished concrete" aesthetic, however, is their lack of authenticity. Are consumers really going to buy the "industrial chic" concept at a newly built hotel out in the suburbs?
I'm curious to see how this new lower-priced boutique hotel trend pans out, particularly given that that's one of the models I'm considering launching myself. My problem with ideas like NYLO's "exposed brick and polished concrete" aesthetic, however, is their lack of authenticity. Are consumers really going to buy the "industrial chic" concept at a newly built hotel out in the suburbs?
Friday, February 23, 2007
There's a great article on Liz Lambert (founder of the Hotel San Jose) in the new Austin Business Journal magazine supplement, which unfortunately doesn't appear to be online. Three tidbits gleaned: they're adding 15 rooms to the San Jose (it currently has 40); it has an average 93% occupancy rate (which is about what I had guessed, but I didn't have confirmation); and Liz is rechristening her newly purchased Miller-Crockett House as the Saint Cecilia, a tribute to the patron-saint of music.
You know how some young couples start dreaming up baby names long before they're ready to procreate? I've been doing that lately with hotel names. A little silly, perhaps, but it takes quite a bit of contemplation for me to come up with something along these lines that I really like. It took a good six months for me to settle on the name "Urban Passport" for my online travel guide company, but I haven't had any second doubts about it in the six years since.
I haven't made any final decisions on hotel monikers, and my ultimate choice will depend somewhat on the building's location and history, but at the moment I'm leaning towards "The [insert color name] Door." I like the idea of having an external "signature" readily identified with the place, and while uniquely colored front doors have worked well for a variety of ventures, no one's really tried it in the hotel sphere. There's one name I'm leaning toward that I won't reveal just yet, but I'll mention a few colors I've decided against and explain why:
I haven't made any final decisions on hotel monikers, and my ultimate choice will depend somewhat on the building's location and history, but at the moment I'm leaning towards "The [insert color name] Door." I like the idea of having an external "signature" readily identified with the place, and while uniquely colored front doors have worked well for a variety of ventures, no one's really tried it in the hotel sphere. There's one name I'm leaning toward that I won't reveal just yet, but I'll mention a few colors I've decided against and explain why:
- Indigo - My first choice, but then I remembered that Hotel Indigo is the name of InterContinental's new boutique chain, so it's definitely out. Can't have someone confusing us with a key competitor, particularly given the strong likelihood of the chain launching an Austin location at some point.
- Turquoise - Already have a well-known one here.
- Red -Too associated with Elizabeth Arden.
- Green - Too associated with a rather notorious film from the '70s.
Thursday, February 22, 2007
And while on the subject of hotel revamps in other cities, I'll briefly comment on Kimpton's new Hotel Palomar in Dallas, which has quickly become the city's #1-ranked hotel on TripAdvisor. The building (on Mockingbird near its intersection with Central) originally housed a Hilton -- I remember it from my childhood, having lived in Dallas until I was 13 -- but it closed at some point in the late '80s or early '90s after the Texas real estate market collapsed. It reopened a while later, clumsily rechristened the Hiltop Inn -- yes, with one "L," and no, without any association to the Hilton chain from which the name was presumably derived -- and stayed open (undergoing at least one more name change in the process) until being acquired by a private equity group in 2004, which then sold Kimpton the hotel license. Clearly, they've done an amazing job, and clearly, Kimpton will be providing some formidable competition once their Hotel Van Zandt opens in Austin in a couple of years.
Oh, and Kimpton is relaunching the Trader Vic's restaurant & bar originally housed in the Hilton back in the '60s. I love those places (I've been to the ones in L.A. and London, though I think the former has since closed), and I think the tiki bar concept (both in Dallas and elsewhere) is ripe for a comeback.
Oh, and Kimpton is relaunching the Trader Vic's restaurant & bar originally housed in the Hilton back in the '60s. I love those places (I've been to the ones in L.A. and London, though I think the former has since closed), and I think the tiki bar concept (both in Dallas and elsewhere) is ripe for a comeback.
Numbers! My favorite thing in the world. Well, no, not really, but I've had to reacquaint myself with the concept of number-crunching in order to develop a hotel-investment business case. Regardless of my financing source -- debt, individual investors and/or small private equity funds -- I'll need spreadsheets and revenue projections based on tangible, quantifiable data (historical and projected occupancy rates & RevPAR (annual revenue per room), market value for comps in similarly sized markets, etc.) to justify the investment.
To comment briefly on a new property in my old 'hood: The Bowery Hotel, located a few blocks south of my old NYC loft, finally opened after six years of delays and revamps; VanityFair.com has an interesting feature on the place, if you're curious. That project represents several of my worst nightmares as an aspiring hotelier, including a city-mandated stop-work order after they figured out that the property wasn't correctly zoned for a 16-story hotel (in its original incarnation, the building was supposed to be a NYU dorm). I'm glad to see it's finally launched, even though it's arguably the final nail in the pregentrification-Bowery coffin, and the developers (Eric Goode and Sean MacPherson, owners of the Maritime Hotel in Chelsea - also, strangely enough, about a block from an apartment I lived in) did a great job of transforming a seriously ugly duckling into something much more in character with the area, a testament to the fact that any building can be transmogrified with enough vision and patience. Looks like introductory rates start at $245/night, which is pretty damn good for a four-star Manhattan boutique property.
To comment briefly on a new property in my old 'hood: The Bowery Hotel, located a few blocks south of my old NYC loft, finally opened after six years of delays and revamps; VanityFair.com has an interesting feature on the place, if you're curious. That project represents several of my worst nightmares as an aspiring hotelier, including a city-mandated stop-work order after they figured out that the property wasn't correctly zoned for a 16-story hotel (in its original incarnation, the building was supposed to be a NYU dorm). I'm glad to see it's finally launched, even though it's arguably the final nail in the pregentrification-Bowery coffin, and the developers (Eric Goode and Sean MacPherson, owners of the Maritime Hotel in Chelsea - also, strangely enough, about a block from an apartment I lived in) did a great job of transforming a seriously ugly duckling into something much more in character with the area, a testament to the fact that any building can be transmogrified with enough vision and patience. Looks like introductory rates start at $245/night, which is pretty damn good for a four-star Manhattan boutique property.
Monday, February 12, 2007
I've been a remarkably lackluster blogger as of late. My apologies.
Had an extremely fruitful trip to California, and it helped me crystallize exactly what kind of hotel project I want to focus on. I was particularly enamored with a place I stayed in Palm Springs called the Desert Star Bungalows, launched two years ago by a very nice gay couple (although it's not a gay hotel per se) who patiently answered all of my probing questions about the experience of opening and running a small hotel. To my amazement, they managed to renovate the place (which hadn't been updated in decades) in less than 30 days! They're slowly doing more extensive renovations now, including updates of all the bathrooms and kitchens; here are some before and after shots, to give you an idea. I think I actually like the older kitchens better -- they're a little more kitschy and unique, albeit less functional given the lack of dishwasher and full-size fridge and stove -- but the bathrooms are definitely an improvement.
I've decided I'd like to do something similar here: buy a small apartment complex, preferably comprised of efficiency apartments, and convert it into a hotel. It's been pointed out to me that Austin has nothing in the way of interesting accommodations for longer stays, e.g. a week to a couple of months; eating every meal out at restaurants, necessary if you lack a kitchen, can get tiresome (not to mention pricey) after a while. The city has corporate apartments and Extended Stay America-style chains, mostly up in North Austin, but those aren't the types of places you'd want to stay if, say, you were in town recording an album or shooting scenes for Robert Rodriguez's latest flick (he's filmed most of his movies here, including "Sin City" and its upcoming sequel).
The biggest rub would be finding a complex in an appropriate location. It would be essentially impossible to get something in a purely residential area rezoned for commercial use, which eliminates most of the possibilities in places like my mom's neighborhood, Clarksville (it has one of the larger supplies of cute '50s-era efficiency buildings in town). I'm also skeptical about buying a complex anywhere near UT, particularly since so much property there is being snatched up, torn down and replaced with luxury condos, purchased mostly by well-to-do parents for their college-age kids; the condo boomlet has driven prices up considerably there.
From a financial perspective, I think an apartment-to-hotel conversion makes sense. Depending on location and condition, a small apartment complex often costs under $100K per unit, sometimes much less than that. Hotels in the U.S. sell for a median price of $270K per "key," as it's put in industry lingo. Even if I paid $100K/unit and spent a moderately steep $30K renovating each one, I'd basically double my money (or my investors' money) if I needed to sell the place. (Or I could always do what a lot of apartment complex owners are doing these days and convert the place to condos; the newer ones in Central Austin go for a minimum of $250/sq ft these days, and in some cases double that much.) Point being, I'd have multiple exit strategies.
On another note, I recently found out that I'll soon have a significant new competitor. Remember my idea about buying a B&B and converting it? Seems that Liz Lambert, the owner of the San Jose, beat me to the punch: she bought the Miller-Crockett House B&B a few months ago and plans to relaunch it as a San Jose "sister hotel." I'd enviously eyed that place myself at one point; it sat on the market for quite some time, given that its $2 million price tag -- it was being marketed as a single-family home -- was by far the highest in South Austin, where houses rarely go for more than $1M. I'm really curious to see what Liz does with the place.
Had an extremely fruitful trip to California, and it helped me crystallize exactly what kind of hotel project I want to focus on. I was particularly enamored with a place I stayed in Palm Springs called the Desert Star Bungalows, launched two years ago by a very nice gay couple (although it's not a gay hotel per se) who patiently answered all of my probing questions about the experience of opening and running a small hotel. To my amazement, they managed to renovate the place (which hadn't been updated in decades) in less than 30 days! They're slowly doing more extensive renovations now, including updates of all the bathrooms and kitchens; here are some before and after shots, to give you an idea. I think I actually like the older kitchens better -- they're a little more kitschy and unique, albeit less functional given the lack of dishwasher and full-size fridge and stove -- but the bathrooms are definitely an improvement.
I've decided I'd like to do something similar here: buy a small apartment complex, preferably comprised of efficiency apartments, and convert it into a hotel. It's been pointed out to me that Austin has nothing in the way of interesting accommodations for longer stays, e.g. a week to a couple of months; eating every meal out at restaurants, necessary if you lack a kitchen, can get tiresome (not to mention pricey) after a while. The city has corporate apartments and Extended Stay America-style chains, mostly up in North Austin, but those aren't the types of places you'd want to stay if, say, you were in town recording an album or shooting scenes for Robert Rodriguez's latest flick (he's filmed most of his movies here, including "Sin City" and its upcoming sequel).
The biggest rub would be finding a complex in an appropriate location. It would be essentially impossible to get something in a purely residential area rezoned for commercial use, which eliminates most of the possibilities in places like my mom's neighborhood, Clarksville (it has one of the larger supplies of cute '50s-era efficiency buildings in town). I'm also skeptical about buying a complex anywhere near UT, particularly since so much property there is being snatched up, torn down and replaced with luxury condos, purchased mostly by well-to-do parents for their college-age kids; the condo boomlet has driven prices up considerably there.
From a financial perspective, I think an apartment-to-hotel conversion makes sense. Depending on location and condition, a small apartment complex often costs under $100K per unit, sometimes much less than that. Hotels in the U.S. sell for a median price of $270K per "key," as it's put in industry lingo. Even if I paid $100K/unit and spent a moderately steep $30K renovating each one, I'd basically double my money (or my investors' money) if I needed to sell the place. (Or I could always do what a lot of apartment complex owners are doing these days and convert the place to condos; the newer ones in Central Austin go for a minimum of $250/sq ft these days, and in some cases double that much.) Point being, I'd have multiple exit strategies.
On another note, I recently found out that I'll soon have a significant new competitor. Remember my idea about buying a B&B and converting it? Seems that Liz Lambert, the owner of the San Jose, beat me to the punch: she bought the Miller-Crockett House B&B a few months ago and plans to relaunch it as a San Jose "sister hotel." I'd enviously eyed that place myself at one point; it sat on the market for quite some time, given that its $2 million price tag -- it was being marketed as a single-family home -- was by far the highest in South Austin, where houses rarely go for more than $1M. I'm really curious to see what Liz does with the place.