InterContinental tests luxury waters in Boston

BOSTON— While it had its soft opening earlier this month, the InterContinental Boston is expected to have anything but a soft impact on both the local luxury hotel market here as well as the city’s waterfront skyline. With its unique blue reflective-glass exterior as well as its prime location overlooking the harbor, the mixed-use building brings with it a great deal of promise for the luxury chain. “When you looked at [the site]five, 10 years ago and now you look at this fantastic building, it turned out even better than I expected. We couldn’t be more pleased,” said Lew Fader, vp of operations for InterContinental Hotels & Resorts, North America, who added that the 424-room property has the ingredients to serve as a flagship hotel for the brand. “It’s got a lot of legs to it.” Elkus/Manfredi, based here, worked on the design of the two-tower building, which houses hotel rooms on the first 12 floors and some 130 residential units on floors 14 to 23. The sail-like structure features concave and convex construction and is a modern interpretation of the landing of a schooner, according to the property’s general manager, Timothy Kirwan, who joined the hotel in December of 2005. He said that the hotel, which is owned by Extell Boston Harbor LLC, will be catering primarily to business guests with the city’s financial district and convention center within walking distance. Located on the waterfront, it is also the closest downtown luxury hotel to Logan International Airport. Kirwan said that the initial reaction to the hotel prior to the recent soft opening has been quite positive. The grand opening of the hotel is scheduled to take place in March, at which time InterContinental Hotels Group will begin actively marketing the property. “It’s been off the charts. The city is excited and the Convention & Visitors Bureau is excited. For InterContinental, it is a new style in a dramatic setting,” Kirwan said. He added that the timing for the opening of a five-star hotel could not be much better with demand soaring and rates rising both nationally and locally. Kirwan said that citywide occupancy rates have been running at about 74% to 75%. “[The opening] is timed pretty well. The issue for us [as a city]is not overbuilding. Everything is moving toward the water. We have to be careful to not get too deep a pipeline,” said Kirwan. Filling the void Fader cited the competitive set in the market for the InterContinental Boston as a Four Seasons and two Ritz-Carlton properties. The $310-million project brings InterContinental, which operates just under 50 hotels in the Americas and slightly less than 150 worldwide, into Boston for the first time. “It’s a tough market. There’s been a void in our portfolio for a long time,” Fader said, adding that he likes its reputation as an academic city. “All that fits nicely into what our product is going to be there.” A hotel with a mixed-use residential component represents a new challenge for InterContinental, although Fader noted that there are a number of mixed-use properties in its current pipeline. He noted that such deals are primarily a byproduct of financing in today’s difficult new-build climate. “A lot of deals, probably 80% to 90%, have some sort of residential, mixed-use component. When developers are building, the financing is a lot easier with balanced portfolios,” he said. Kirwan, for his part, does have experience with residential projects and he considers that vital to the ultimate success of the property. “Part of the sell [for potential residents]is the shared services of a luxury hotel, such as in-room dining. Residents are kind of an addendum to new guests, but they don’t leave. They are our 24/7 friends. You get to see their children grow up. They are vertically integrated, but they are all part of the same sense of arrival,” he said. Different dining and entertainment options become even more important, according to Fader, to create a meeting point for re