Coral Beach Expands Portfolio; Focuses On Turnarounds

NAPLES, FL— A recently formed hospitality management and investment company is building its porfolio of boutique properties in south Florida and the Caribbean under the Coral Collection banner. The company, Coral Beach Hotels & Clubs, was created earlier this year from the merger of Coral Beach Hotels & Resorts and the Coral Beach Club Co., which had operated as separate companies with shared ownership. There are nine hotels in the Coral Beach portfolio and seven country clubs. “It just made sense to merge” the two companies, John Ayres, chairman/CEO of the new entity, said recently. “Both companies were basically in the hospitality business.” Ayres added that he and Club company founder Lee Weeks, who is president/COO of the new firm, felt combining the two would be more efficient and enhance opportunities for growth. Four of the hotels in the Coral Beach portfolio are third-party management situations and include Hotel Escalante in Naples and three South Beach (Miami) properties: the Blue Moon; Essex House Hotel & Suites; and WinterHaven Hotel. Coral Beach has an ownership stake in three other properties in the portfolio including the Chesapeake Resort, Islamorada, Florida Keys; Casa Ybel Resort, Sanibel Island; and the Royal West Indies, Providenciales, Turks & Caicos. Ayres and William Esping, managing general partner of EFO Holdings, a Dallas-based investment firm, purchased the remaining two hotels in the portfolio last month. These include the Vero Beach Hotel & Club and Palm Court Resort, both in Vero Beach, FL. When explaining what makes a Coral Beach property unique, Ayres pointed to the “ambience.” He noted that whenever he travels on business, he seeks out the “small, more intimate” properties. “It’s hard to feel at home in a big, convention hotel. With a small property, you feel like you’re coming home and that’s how we want our guests to feel,” he said. “With the Coral Collection, we’re assembling one-of-a-kind properties primarly in beachfront locations— although we’re working on a property in Orlando— that we feel guests will remember” because of their home-like ambience and emphasis on service, he added. Ayres indicated that the Coral properties have a high percentage of repeat customers. “The percentage is north of 50%,” he said. Coral Beach Hotels & Clubs has become known as a “turnaround specialist,” although Ayres prefers to describe the company’s niche differently. “We see opportunities where others don’t,” he said. “We might see a property that is a C- but can be an A- and wonder why it isn’t. “We bring [to a project]the capital improvement dollars and the vision of what a hotel can be,” he added. The Palm Court Resort in Vero Beach is a recent example of a successful Coral Beach turnaround. On March 1, 2001, the company signed a five-year lease agreement with an option to buy the property, which Ayres and Esping recently did. In the ensuing months, under Coral Beach’s management, net operating income grew from $500,000 to $1.2 million; average rate increased from $110 to $117; and average occupancy climbed from 45% to 54%. Additionally, revenue has increased by 22% and operating profits by 77%. Noting that the 106-room Palm Court has “an incredible location on the beach,” Ayres said the turnaround succeeded for a number of reasons. “One reason was very simple: We went out and asked for the business. We knocked on doors to ask local companies if they have salesmen coming to town to send them our way, and did the same with professionals like attorneys who might have clients coming in. “We also instituted a marketing program through the Coral Collection,” he added. The multi-faceted marketing program used at the Palm Court as well as other Coral Beach hotels includes revenue management and maximization; worldwide Internet marketing; a web-based reservation system; and dedicated sales directors in Miami, Los Angeles, New York and Europe. In addition, there are various advertising and di