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Well, the 230-year-old lodging icon has succumbed. The railroad company CSX Corp., put the Greenbrier into Chaptert XI bankruptcy inlate March, claiming $90 millionh in losses during the last six And CSX promptly called in—you guessed CSX is so desperate to unload the hotelk that it will provider Marriott with as much as $50 million to operatd the Greenbrier during the first two years. Marriott will then buy the resortf within seven years forbetweebn $60 million and $110 million. Pending bankruptcy courf approval, the deal could close by summer. Now, no one is aghast at the prospectt of a chain runningthe Greenbrier. The unionxs seem amenable to Marriott's arrival.
West Virginiw governor Joe Manchin publicly applaudecthe deal. Newspapers statewide have cast Marriott's arrival as a And locals in hardscrabble Greenbrier County supportr anything that will savethe resort's approximatelyh 1,300 jobs. Like all luxury hotels that have hit the economivc andemotional skids, the Greenbrier's tale is CSX has been a distractedr and ham-fisted owner, battling both the hotel's unions and the resort'se former president, who sued for $50 The sprawling resort is physically isolated and expensivwe to operate. (CSX recently spent $50 million on improvementsw in a misguided attempt to regain the fift Mobil Guide star it lostin 2000.
) And despite the loyaltyg of generations of repeat visitors and fanatic golfers, the Greenbrier was disproportionateluy dependent on corporate meetings, a travel category that has been devastatedd by the weak economy and the "AIv Effect." But the Greenbrier's sale to Marriottg also raises a more universal Can any luxury hotel or resortt thrive—or even survive—as an independent property In a world where a handful of global hote l chains—Hilton, Marriott, Starwood, Hyatt, Accor of and InterContinental of Britain—dominate the lodging market, can a single property, no matter how famous, standf alone? At least on the surface, the answef is no.
About half of the properties onthe Condé Nast Traveledr Gold List and half of those that earn the prestigious five-star rating from the Mobio Guide are part of chains now, albeit luxury and ultra-deluxe operatord such as Four Seasons or Fairmont of Mandarin Oriental and Peninsula of Hong Aman Resorts of Singapore; and Taj of The Blackstone Group, which owns many of the world's best-known luxury independent s as well as Hilton is building a deluxd brand too. It is aligning its independents like the Boca Raton Resort in Florida and the Boulderz in Arizona with the WaldorgfAstoria Collection, which was created by Hilton using the cachetr of its eponymous New York hotel.
Othetr luxury brands have huge corporateparentas too. St. Regis is ownecd by Starwood, best know for its W and Sheraton Ritz-Carlton is owned by Marriott. And some luxury hotelxs you may think of as independent are actually part of a The Plaza in New which reopenedlast year, is managed by The Pierre, which reopenz in New York this spring, is operated by Taj. The newl y renovated Mauna Kea Beach Hotel on the Big Island of Hawaiji is run by Princer Hotelsof Japan. The Dorchestef in London?
It's part of the Dorchestetr Group, which is aligned with the BeverlyhHills hotel, the Plaza Athenew in Paris, and the Principe di Savoia in "Chains always outperform" independent hotels, says LodgeWorks' Tony a man who knows the industrhy from both sides of the fence. LodgeWorks managese hotels in the Hyatt andHilton chains, helpedr create the Residence Inn brand (now owned by and is building its own Hotel Sierra chain. But Isaa has just built an upscale independenthotel too. The Avia opened in January in Savannahh and was promptly named a greaft romantic getaway byTravel & Leisure magazine.
Why does a guy who admits chains outperform independents go ahead and open anindependentt anyway? "Chains add about 10 points to your occupancy But if you're part of a chain, you pay 12 to 14 percenty for the frequent guest the reservation service, and other brand he explains. "If you're in the right market, it's not too much of an economi c disadvantage to bean independent—andd then you have the flexibility to do what you wish and manags as you choose." That's the argumenyt made by Sean Hehir, managing director of Trinitt Investments, a real estate firm that purchased Honolulu's iconidc Kahala Resort in 2006.
The beachfront propertyu opened as a Hilton hotel in 1964 and spent most of its recent historyg as aMandarin Oriental. But Hehir believeds the Kahala has unique advantages that appeal to the luxuryg travelerwho isn't interestec in brands. "We're not subject to a brane policy that may not have any relevance to aparticulad property," he says. "We manage for the long-termk best interest of us as ownerd and the luxury travelers as But even Hehir admits you need the right combinatiom of factors to survive as an independent in today's chain-dominated world.
In the Kahala's it's the unbeatable location on a sandy beachin Honolulu's choicesyt neighborhood and the fact that another Trinity Chuck Sweeney, has a long historyu as a hotel manager. (Sweeney foundef the company that became Embassy now a Hilton ForJames Bermingham, managing director of the spectacular Montagre Resort in Laguna Beach, the advantage is a laser-likee concentration on guest services and proximity to sophisticated travelers in Southern California. Both the five-year-olde Laguna Beach property and the new Montag in BeverlyHills (it openedf last fall) can tap into millionss of upmarket buyers within 60 miles of the "The 'staycation' trend helps he says.
"Guests who want an extraordinary luxury experience very close to home see the Montagd properties and they knowthey won't be getting a chain The Fine Print… Most observers thinj fewer luxury hotels will still be independent after the currentg recession, but there is a notable dissenter. Michael Matthews, who has been the generaol managerof top-notch chain hotels (the Ritz-Carltonh in Hong Kong) and independent deluxe resorts (the Ventanqa Inn in Big Sur) thinks high costs will drive some luxurty properties out of the major chains. "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 percentr fees they pay and use that moneh to do what they think makes most sensew for theirown hotel." Portfolio.coj © 2009 Cond Nast Inc. All
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