The hotel management company behind the Montage Laguna Beach is readying a Beverly Hills hotel with plans for others in the works.
Laguna Beach-based Montage Hotels & Resorts is set to open a 201-room hotel in Beverly Hills this fall. The project includes 25 condominiums.
The Montage Beverly Hills will be the company’s second hotel after Montage Laguna Beach, a 250-room Craftsman-style hotel overlooking the beach that opened in 2003.
Montage, which formed to run the Laguna Beach hotel, is a hotel management company that works with developers and investors, the biggest of whom is Pierre Omidyar, founder and chairman of eBay Inc.
Athens Group of Phoenix is developing the Beverly Hills hotel, which Montage will run.
The Beverly Hills hotel has been a long time coming. City officials approved the project in 2004. Montage and its partners then faced a citywide vote, which they won in 2005.
“It took more years to plan than we would have liked,” Montage founder and Chief Executive Alan Fuerstman said.
The hotel is part of an expansion by Montage, a small player in luxury hotels. By 2010, the company expects to run hotels in Utah, Mexico and the Bahamas.
Montage and its partners also have plans for a hotel in Laguna Beach’s Aliso Canyon and recently bought land in Hawaii.
The Montage Laguna Beach is the company’s model. The hotel sits on a former trailer park where redevelopment spanned several years and was subject to a pair of local referendums.
Most of that burden was shouldered by Marriott International Inc., which started the project and sold to Omidyar and other Montage investors during construction.
Hotel watchers give Montage high marks for its running of the hotel, which has a four-star rating from Mobil Travel Guide and a AAA five-diamond rating.
“They hit the ground running and opened strong,” said Bruce Baltin, senior vice president of the Los Angeles office of PKF Consulting, which tracks hotels.
Five years is a short window for a luxury hotel to make its mark, said Don Wise, managing partner of global hospitality for Irvine-based Johnson Capital.
“These are complicated projects,” he said.
Montage’s investors paid about $190 million to buy the hotel during construction. Some estimate it would sell for $260 million, or a record $1.2 million per room.
“I think it would yield record pricing,” Fuerstman said. “But I’m not anxious to find out.”
According to Fuerstman, Montage Laguna Beach leads the market in revenue per available room, a measure of profitability that takes room rates and occupancy into consideration. He declined to offer details.
That would put Montage at yearly revenue per room of about $400. The highest revenue per room in Orange County for the 12 months ended April was $398 per room, according to Hendersonville, Tenn.-based Smith Travel Research.
Beverly Hills Hotel
Montage’s investors and developer Athens are looking at spending an estimated $200 million to build their Beverly Hills hotel.
The development “plays into the glamour and luxury of Beverly Hills,” said Kathy Smits, executive director of the Beverly Hills Conference & Visitors Bureau.
Montage’s other projects:
n Aliso Creek Inn, Laguna Beach. Plans call for replacing a 1960s-era hotel off Pacific Coast Highway in Aliso Canyon with 72 guest rooms at an inn and cottages. Montage partner Athens Groups plans to move part of a nine-hole golf course and add a couple dozen homes to the canyon. The project, which has seen its share of controversy and public concerns, could start construction in two or three years.
n Deer Valley, Utah. Montage Deer Valley is set to include 173 rooms and 90 homes, along with 15,000 square feet of conference space and a 35,000-square-foot spa. Deer Valley is scheduled to open in 2010.
n Cabo San Lucas. Plans for a 150-room hotel call for 75 suites, a beach club, an 18-hole golf course and homes. Grading is under way with the hotel set to open in 2010.
n Bahamas. The oceanfront Royal Island Bahamas is under way on an island owned by Staubach Co.’s Cypress Equities. Set to open in 2010, plans call for 60 rooms, 23 suites, 76 oceanfront and marina villas, a spa, restaurants, a beach club and a golf course.
Last year, Montage bought 122 acres at the Princeville Resort on Kauai. There are no plans yet for development, said Fuerstman, who’s held executive posts at Bellagio Las Vegas and The Phoenician in Scottsdale.
“We probably won’t have 100 hotels, but we could get larger than (what’s) in planning now,” he said.
