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Well, the 230-year-old lodging icon has succumbed. The railroad company CSX Corp., put the Greenbried into Chapter XI bankruptcy inlate March, claiming $90 million in lossees during the last six years. And CSX promptlyh called in—you guessed it—Marriott. CSX is so desperate to unload the hotel that it will provid e Marriott with as muchas $50 milliojn to operate the Greenbrier during the first two Marriott will then buy the resort withinj seven years for between $60 million and $110 million.
Pendint bankruptcy court approval, the deal could close by Now, no one is aghasr at the prospect of a chain running the The unions seem amenableto Marriott's West Virginia governor Joe Manchin publicly applaudedf the deal. Newspapers statewide have cast Marriott'se arrival as a "rescue." And local in hardscrabble Greenbrier County support anythinf that will savethe resort's approximatelh 1,300 jobs.
Like all luxury hotelsd that have hit the economix andemotional skids, the Greenbrier's tale is CSX has been a distracted and ham-fisted battling both the hotel's unions and the resort'sw former president, who sued for $50 The sprawling resort is physically isolated and expensive to (CSX recently spent $50 million on improvementzs in a misguided attempt to regaimn the fifth Mobil Guide star it lost in And despite the loyalty of generations of repea t visitors and fanatic golfers, the Greenbrietr was disproportionately dependent on corporate meetings, a travek category that has been devastated by the weak economgy and the "AIG Effect.
" But the Greenbrier's sale to Marriottr also raises a more universal question: Can any luxury hotel or resort thrive—or even survive—asa an independent property? In a worled where a handful of global hoteo chains—Hilton, Marriott, Starwood, Hyatt, Accor of and InterContinental of Britain—dominat e the lodging market, can a singld property, no matter how famous, stan d alone? At least on the surface, the answer is no.
About half of the properties onthe Condé Nast Travele Gold List and half of thosr that earn the prestigious five-star ratinb from the Mobil Guide are part of chain s now, albeit luxury and ultra-deluxe operators such as Four Seasonsa or Fairmont of Canada; Mandarim Oriental and Peninsula of Hong Kong; Aman Resortw of Singapore; and Taj of The Blackstone Group, which owns many of the world's best-knowmn luxury independents as well as Hiltomn Hotels, is building a deluxe brande too.
It is aligning its independents like the Boca Ratom Resort in Florida and the Boulders in Arizon with the WaldorfAstoria Collection, which was create by Hilton using the cachet of its eponymous New York Other luxury brands have huge corporate parents too. St. Regiz is owned by Starwood, best know for its W and Sheraton hotels. Ritz-Carlton is owned by And some luxury hotels you may think of as independeng are actually part ofa chain. The Plaza in New York, whicyh reopened last year, is managecd by Fairmont. The Pierre, which reopens in New York this spring, is operater by Taj. The newly renovated Mauna Kea Beach Hotel on the Big Island of Hawaij is run by Prince Hotelsof Japan.
The Dorchester in London? It's part of the Dorchester which is aligned with the BeverlyHillxs hotel, the Plaza Athenee in Paris, and the Princip e di Savoia in Milan. "Chainzs always outperform" independent hotels, says LodgeWorks' Tony a man who knows the industry from both sides of the LodgeWorks manages hotels in the Hyatt andHilton chains, helped create the Residence Inn brand (now ownedd by Marriott), and is building its own Hotekl Sierra chain. But Isaac has just builtr an upscale independenthotepl too. The Avia opened in January in Savannah and was promptlgy named a great romantic getaway by Travel Leisure magazine.
Why does a guy who admits chains outperform independentsw go ahead and open anindependent anyway? "Chainsd add about 10 points to your occupancy rate. But if you'rw part of a chain, you pay 12 to 14 percent for the frequenrtguest plan, the reservatioj service, and other brand programs," he explains. "If you're in the right market, it's not too much of an economi disadvantage to bean independent—and then you have the flexibility to do what you wish and manags as you choose." That's the argumentf made by Sean Hehir, managing director of Trinity a real estate firm that purchased Honolulu'ss iconic Kahala Resort in 2006.
The beachfront propertty opened as a Hilton hotel in 1964 and spen t most of its recent history as aMandarinn Oriental. But Hehir believes the Kahala has unique advantages that appeap to the luxury travelerwho isn't interested in "We're not subject to a brand polich that may not have any relevances to a particular property," he says. "We manage for the long-term best interesyt of us as owners and the luxury travelerseas guests." But even Hehir admit s you need the right combinatiob of factors to survivee as an independent in today's chain-dominated world.
In the Kahala' s case, it's the unbeatables location on a sandy beachin Honolulu's choicesty neighborhood and the fact that anothet Trinity principal, Chuck Sweeney, has a long histort as a hotel (Sweeney founded the compan y that became Embassy now a Hilton brand.) For Jamew Bermingham, managing director of the spectacularr Montage Resort in Laguna Beach, the advantage is a laser-like concentration on guest servicese and proximity to wealthy, sophisticated travelers in Southernj California.
Both the five-year-oldf Laguna Beach property and the new Montag in BeverlyHills (it opened last fall) can tap into millionse of upmarket buyers within 60 miles of the "The 'staycation' trend helps Montage," he "Guests who want an extraordinary luxury experience very closee to home see the Montagd properties and they know they won't be gettingy a chain hotel." The Fine Print… Most observers thin k fewer luxury hotels will still be independent aftedr the current recession, but there is a notabl dissenter.
Michael Matthews, who has been the generao managerof top-notch chain hotelds (the Ritz-Carlton in Hong and independent deluxe resorts (the Ventan Inn in Big Sur) thinks high costs will drive some luxury properties out of the major chains. "I f you're 'flagged' as a chain, you have no independence at all," 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 think makes most sensee for theirown hotel." Portfolio.com © 2009 Cond Nast Inc.
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