NEW YORK— Luxury may be more a state of mind than a price point nowadays, but it’s a money-driven concept that connotes top-of-the-line experiences and serves, nonetheless, as a lure for both hoteliers and consumers who want not only to be part of the luxe life, but to benefit from it as well. A simple perusal of any condo-hotel prospectus, for example, basically proves the point: no one’s building a mixed-use project with fabulous midscale residences; everything— from the carpeting to the FF&E to garage space— is touted as being at the luxury level. And it’s easy to see why: A room with luxury carpeting is perceived as better than a room with carpeting, even if there’s no difference in the carpet product itself. The liberal use of the luxury concept has broadened the field in hospitality as well, with certain properties, such as upper-echelon boutiques, now in the mix where once only hotels such as Four Seasons, Ritz-Carlton, Peninsula, Regent and Mandarin Oriental played. According to Smith Travel Research (STR), as of April there were 4,186 luxury hotel rooms under construction in the U.S., a 49% increase over April 2005. For first-time hotel developer David Pisor, the luxury segment seemed the right fit. As part of a joint venture with global investment group Arcapita, Inc., Pisor, the CEO of Elysian Development Group, is poised to break ground in Chicago on the 60-story Elysian, which is held by First Elysian Properties. The estimated $245 million project, which includes 188 hotel suites and 51 pure condominium residences, at press time was largely sold. The project is slated to be finished by year-end 2008. When Pisor did research on the market and looked at the condo-hotel model, he deduced that one of the key elements was that the sale— what would make a consumer buy— was a lifestyle decision. “This is a second, a third, a fourth home for them; it was not something they needed, but it was something they wanted…I think a buyer that’s buying at a three-star level or below doesn’t have the flexibility to miss payments or to have this be something that’s not an investment. I really think that the long-term success of this will be determined by the ultra-luxury nature of the project,” he said. Pisor— who has a background in luxury food and beverage operations as well as 15 years in real estate developing residential condominiums in the Windy City— noted among the segment’s disadvantages is “that you set yourself up for great expectations and you need to deliver on it.” To keep things close in, Pisor, intent on having his own hotel company— Elysian Hotels and Resorts— will create an operating arm staffed with former Rosewood Hotels and Resorts and Four Seasons Hotels and Resorts employees. The CEO felt there’s room in the industry for more luxury players, a trend he believes will be further supported as the baby boomer generation continues to look for unique, high-end experiences on which to spend its disposable income. “Demographic trends tend to help the segment,” said Bobby Bowers, vp at Smith Travel Research, agreeing the older population is a key driver. “Additionally, many younger travelers are increasingly affluent and seek a luxury hotel experience.” Case in point is Pisor himself. “I travel a lot and I like to go to places that take care of me personally, and it doesn’t have to be a Ritz-Carlton or a Four Seasons any longer; what it has to be is something really special. And I think there’s a great opportunity in that ultra-luxury space to build not one, but maybe two or three brands.” He expects to compete in Chicago against Four Seasons, The Peninsula and the upcoming Mandarin Oriental and intends to expand his brand sooner rather than later. Timing for adding more luxury product may be ripe. According to consultant Bjorn Hanson of PricewaterhouseCoopers (PwC), demand this year will grow at about 4.1%. While it’s not the 7.4% growth spurt seen in 2004— largely a recovery reaction to demand loss betw
