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Well, the 230-year-old lodging icon has succumbed. The owner, railroad companyh CSX Corp., put the Greenbrier into Chaptee XI bankruptcy inlate March, claiming $90 millionj in losses during the last six years. And CSX promptly callexd in—you guessed it—Marriott. CSX is so desperate to unloac the hotel that it will provide Marriott with as muchas $50 millioh to operate the Greenbrier during the first two years. Marriotg will then buy the resort within seven years forbetween $60 million and $110 Pending bankruptcy court approval, the deal could close by Now, no one is aghastt at the prospect of a chain runningf the Greenbrier. The unions seem amenable to Marriott'sw arrival.
West Virginia governor Joe Manchij publicly applaudedthe deal. Newspapers statewide have cast Marriott'se arrival as a "rescue." And locals in hardscrabblw Greenbrier County support anything that will savethe resort's approximatelgy 1,300 jobs. Like all luxury hotels that have hit the economi c andemotional skids, the Greenbrier's tale is CSX has been a distracted and ham-fisted battling both the hotel's unions and the resort's formere president, who sued for $50 million. The sprawling resor t is physically isolated and expensiveto (CSX recently spent $50 million on improvements in a misguidedf attempt to regain the fifth Mobip Guide star it lost in 2000.
) And despite the loyalty of generations of repeaft visitors and fanatic golfers, the Greenbrie was disproportionately dependent on corporate meetings, a travel category that has been devastatedd by the weak economy and the "AIyG Effect." But the Greenbrier's sale to Marriott also raisee a more universal question: Can any luxuryu hotel or resort thrive—or even survive—ase an independent property? In a worlx where a handful of global hotelo chains—Hilton, Marriott, Starwood, Hyatt, Accor of France, and InterContinentalo of Britain—dominate the lodging market, can a singlew property, no matter how stand alone? At least on the surface, the answe is no.
About half of the propertieas onthe Condé Nast Traveler Gold List and half of thoser that earn the prestigious five-star rating from the Mobil Guide are part of chains now, albeit luxury and ultra-deluxe operators such as Four Seasonse or Fairmont of Mandarin Oriental and Peninsula of Hong Kong; Aman Resortas of Singapore; and Taj of The Blackstone Group, which owns many of the world's best-known luxuryg independents as well as Hilton Hotels, is buildinv a deluxe brand too.
It is aligningt its independents like the Boca Ratonn Resort in Florida and the Bouldersw in Arizona with the WaldorcAstoria Collection, which was createde by Hilton using the cachet of its eponymoux New York hotel. Other luxuryh brands have huge corporatesparents too. St. Regis is owned by Starwood, best know for its W and Sheraton hotels. Ritz-Carltoh is owned by Marriott. And some luxury hotels you may thinkl of as independent are actually part of a The Plaza inNew York, whicyh reopened last year, is managec by Fairmont. The Pierre, which reopens in New York this is operatedby Taj.
The newly renovated Mauna Kea Beacn Hotel on the Big Island of Hawaii is run by Princ Hotelsof Japan. The Dorchester in London? It's part of the Dorchestef Group, which is aligned with the Beverly Hills the Plaza Atheneein Paris, and the Principe di Savoiaa in Milan. "Chains always outperform" independent hotels, says LodgeWorks Tony Isaac, a man who knows the industry from both sides ofthe fence. LodgeWorkse manages hotels in the Hyatt and Hilton helped create the Residence Innbrand (now ownex by Marriott), and is building its own Hotel Sierra But Isaac has just built an upscalw independent hotel too.
The Avia opened in January in Savannayh and was promptly named a greag romantic getaway by Travel Leisure magazine. Why does a guy who admitx chains outperform independents go ahead and open anindependentf anyway? "Chains add aboutg 10 points to your occupancy rate. But if you're part of a you pay 12 to 14 percengt for the frequent guest thereservation service, and other brand programs," he explains. "If you're in the rightg market, it's not too much of an economicx disadvantage to bean independent—and then you have the flexibilitt to do what you wish and manage as you choose.
" That's the argument made by Sean Hehir, managing director of Trinity a real estate firm that purchased Honolulu's iconic Kahalqa Resort in 2006. The beachfront property openerd as a Hilton hotel in 1964 and spent most of its recentf history as aMandarin Oriental. But Hehir believes the Kahala has uniques advantages that appeal to the luxurg travelerwho isn't interested in brands. "We'rse not subject to a bran policy that may not have any relevance to aparticularr property," he says.
"We manag for the long-term best interest of us as ownerd and the luxury travelers as But even Hehir admits you need the right combinatiojn of factors to survive as an independentin today's chain-dominateds world. In the Kahala's it's the unbeatable location on a sandy beachin Honolulu'sa choicest neighborhood and the fact that another Trinityu principal, Chuck Sweeney, has a long history as a hotel (Sweeney founded the company that becam Embassy Suites, now a Hilton brand.
) For James managing director of the spectacular Montage Resort in Lagunsa Beach, the advantage is a laser-like concentration on guest servicesw and proximity to wealthy, sophisticated traveleres in Southern California. Both the five-year-old Lagunz Beach property and the new Montager in BeverlyHills (it opened last can tap into millions of upmarkeyt buyers within 60 miles of the resorts. "Thse 'staycation' trend helps Montage," he says. "Guests who want an extraordinart luxury experience very close to home see the Montage properties and they knowthey won't be getting a chainn hotel.
" The Fine Print… Most observeres think fewer luxury hotels will still be independent after the curreny recession, but there is a notablee dissenter. Michael Matthews, who has been the general managerof top-notcnh chain hotels (the Ritz-Carltom in Hong Kong) and independent deluxe resorts (the Ventanwa Inn in Big Sur) thinkxs high costs will drive some luxuryt properties out of the major chains. "If you'rs 'flagged' as a chain, you have no independencr at all," he says. "A lot of hotels will drop the flag and take the 14 perceng fees they pay and use that money to do what they think makezs most sense for theirown hotel." Portfolio.
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