With More On The Way, Mandarin Oriental Focuses On U.S. Properties

NEW YORK— With two of three new development projects coming out of the ground in the United States, Hong Kong-based Mandarin Oriental Hotel Group is set on creating greater presence in the North American market, something it hopes to leverage among its 18 owned and operated luxury properties worldwide. Toward that, its domestic properties have been scoping ways to meet consumer demands and bring in key elements to drive revenue in the tightening luxury market, even as the hotels look ahead to greater economic recovery. For example, the Turnberry Isle Resort & Club, Aventura, FL, recently added a 25,000-square-foot spa that incorporates a fitness facility. General manager Jens Grafe told HOTEL BUSINESS® while the 395-room property always had a spa, after 28 years of operations “it was totally dated and not up to the expectations of our clientele. It was also in a remote location and you had to use a shuttle to get there. Not very convenient. Now everything is together in the country club and very state of the art. It’s added another dimension to an otherwise complete resort.” Next up the property is looking to joint venture on a luxury condominium hotel with developer Michael Dezer who owns property adjacent to the hotel’s private Ocean Club on the Atlantic Ocean. “We’re working on a concept right now,” said Grafe, “and we’ll probably hire an architect within a month or two and have a feasibility study done.” He noted the initial investment “is rather low since we already own the land. We’re looking at a project with 200 hotel units and the rest condominiums.” Grafe was unsure how many residential units would be allowed pending studies and municipal review. With the season over in Miami, Grafe said the property “didn’t set any records” in terms of occupancy and ADR, “but we’re happy with the outcome.” Occupancy dropped about six to seven percentage points, with rates down “about 7% to 8%,” he noted, citing a slowdown of European business travel to the market post-9/11. “We also have a lot of new supply— Ritz Carlton Key Biscayne, our own hotel [Mandarin Oriental Miami] downtown, The Diplomat— they all opened last year. There’s a little bit of a price war going on. Everybody’s going for the same market share and the market obviously has not grown,” he said. As to the summer, Grafe echoed the sentiment of many at the recent NYU Hospitality Investment Conference in New York: the booking windows are very short. “Sixty percent of our business is groups, and some are booking as little as a week in advance,” he said. “Individuals are booking even shorter term. We hope the summer will bring what we expect.” He said the fall looks better, with “a very strong October, November, December.” Two years after opening, general manager Jorge Gonzalez told HOTEL BUSINESS® the Mandarin Oriental Miami on Brickell Key “has been very well received by U.S. corporate clientele,” adding the property is on the rebound from 9/11. “We’re not there yet, although the individual corporate market has improved to how we were doing last year. Leisure is a little light, but the corporate group market is good”— still with short booking— “but that’s coming along too.” He projected the summer would be good in terms of rebound. “We’re waiting for September. It looks fairly good But it’s a little scary as to what’s going to happen. It can go either way.” To offset any slope in business at that time, Gonzalez said he’s looking harder at what groups and business have been booked. Last year he offered discounted rates to get business going again. With the Hawaii market also rebounding— notably from the U.S. market— general manager Jan Goessing of the 371-room Kahala Mandarin Oriental Hawaii said in July the property will open “spa suites,” which are being carved from five guestrooms that face the golf course. The suites incorporate spa facilities in each room, including individual bathrooms, treatment room, even a private garden, reminiscent of The Orie