Orange County isn’t just home to a lot of wealthy folks.
It’s also a magnet for rich visitors from all over the U.S. and world.
Few markets are as ready to receive the well-heeled.
Consider the lineup of top-shelf options along OC’s coast: the St. Regis Monarch Beach Resort, the Montage Laguna Beach, the Ritz-Carlton, Laguna Niguel, the Balboa Bay Resort, and the Resort at Pelican Hill.
“I think it’s probably the most important group of resorts in the continental United States,” said Peter Ueberroth, chairman of investment firm The Contrarian Group Inc. “It’s more exceptional than any place other than Hawaii, where it would compete with the resorts on the Big Island.”
Ueberroth should know—he’s co-chairman of Pebble Beach Co., which has three hotels to go with a lineup of Northern California golf courses that includes the famed Pebble Beach Golf Links, Spyglass Hill Golf Course and the Links at Spanish Bay. He’s also a director of the Irvine Company, which joined OC’s resort scene and planted its flag with the global elite of the business world when it opened the Resort at Pelican Hill in 2008.
The five Orange County resorts combine for nearly a thousand rooms, whose rates range from several hundred dollars to several thousand dollars a night, depending on the package and season. The properties are easily worth more than $1 billion—perhaps pushing $2 billion or more. They all line up in a row along a 10-mile jaunt along Pacific Coast Highway.
And they play into a well-marketed image of Orange County: miles of beaches, the blue Pacific Ocean and a climate to enjoy both year-round.
Two of the five feature golf courses, one of which is public. All are on the water or within a short walk or skipped stone’s throw of it. Each puts its best food forward at multiple restaurants. Spas make an appearance. Premium meeting space is available, as well.
Recent Changes
The resort scene has changed recently.
The St. Regis Monarch Beach Resort in Dana Point sold in May for an estimated $320 million.
That works out to roughly $800,000 per room for the 400-room property.
New owner KSL Capital Partners LLC snapped up the place from Washington Real Estate Holdings LLC, which took over the property in 2010 in a deal valued at about $235 million, or $588,000 per room.
The buy marked the resort’s full emergence after some rough going during the recession, when Washington went from lender to owner.
Resort amenities include a public golf course, secluded beach and 100,000 square feet of banquet space, two-thirds of it outdoors.
“We share a great location with many high-end properties,” said Ryan Adams, director of rooms at the St. Regis. “Being in that space lets us offer a lot of things to a lot of people.”
Adams said the resort hosts about 130 weddings a year.
Renovations
Balboa Bay Resort recently unveiled renovations to its lobby, casual dining, formal dining—and a more visible delineation of its relationship to sister property Balboa Bay Club.
Their entrances are less than 40 yards from each other, and it’s only a short stroll from the valet parking to either one.
That had become a challenge because the resort is public and the club is private.
“Members of the club wanted exclusivity,” said Kevin Martin. “We’re creating identities for each and a lifestyle for members and guests.”
Martin is principal of Irvine-based private equity firm Eagle Four Partners, which owns the resort and the club, as well as the private Newport Beach Country Club a few miles away. He’s also president of International Bay Clubs LLC, now part of Eagle Four Partners’ portfolio.
The renovations increased lobby space from 2,000 square feet to 3,000 square feet.
An ocean theme emerges in a color palette that tends toward coral and teal, with a water wall on textured stone.
A casual restaurant formerly called Duke’s Place is now waterfront bar and grill Anchors & Oceans. What had been the First Cabin Restaurant is now Waterline, with a menu of “water-to-table” seafood offerings.
Work on guest rooms is slated to begin this year.
The renovations are an investment of $25 million to $30 million, said Todd Pickup, a principal with Eagle Four and chief executive of International Bay Clubs.
“It’s a four to 4 ½-star waterfront resort,” said Kory Kramer, chief investment officer of Irvine-based Pacific Hospitality Group, which co-manages the property. “It’s a complex asset.”
Pelican’s Coursework
The Resort at Pelican Hill has two golf courses, both designed by Tom Fazio.
They closed in 2005, were renovated, and reopened in 2007, about a year ahead of the resort itself and the same year Giuseppe Lama joined the resort as managing director to “create the programming and design and define the experience.”
Training staff was a major focus.
“You can’t just hire,” he said. “You have to engage staff daily to be gracious, thoughtful and personal. If you go to the restaurant and you don’t like the chicken, pretty soon you don’t go to the spa anymore.”
In addition to golf, Pelican Hill amenities include its spa, 22,000 square feet of meeting space, and guest villas and bungalows.
“Our vision is to take care of the fine and discerning customer,” Lama said.
The Montage Laguna Beach dubs its approach “comfortable luxury,” said James Bermingham, vice president of operations and managing director of the resort.
Doesn’t that go without saying?
Not necessarily so.
Bermingham said that in the past, “all the grandest hotels had a formality to their service delivery. Guests felt they had to dress up and behave—it’s a stiffness in the service experience. We wanted to counter that.”
The idea is that guests don’t have to work to relax. He connects the notion with Laguna Beach’s “old artistic village environment, plus the most beautiful beaches in California.”
Montage takes a laid-back approach, from its architecture to the local artists a guest might encounter on the grounds.
“No matter how you’re dressed or the purpose of your visit, we want you to feel at home,” he said.
The St. Regis’ Adams calls its approach “bespoke service” that “gives guests the gift of time.”
Each resort also strives for a special touch or two.
Bermingham at the Montage highlights its ocean views, secluded beaches and fine dining.
Balboa Bay Resort has a strong family feel.
“The harbor’s our signature element,” Kramer said.
Pelican Hill’s Lama notes 11 restaurants and Fazio golf.
Adams cites the St. Regis butler service and the nightly champagne sabering, the practice of opening a bottle of champagne with a saber that he traces to Napoleonic-era rituals to celebrate the end of each day.
It takes work to make it all look so easy, but the resorts say if they do it right, the work becomes invisible.
Competition, Cooperation
The five OC resorts compete, to be sure.
They also cooperate to keep high-end business coming to local beaches, said Montage’s Bermingham.
Pelican Hill’s Lama noted that the resort serves more than its guests—it’s also an “economic engine” providing employment for 700 to 1,000 people depending on the season.
All are trying to capitalize now on growth in hotel stays and rates.
Regulatory filings by Strategic Hotels & Resorts Inc. in Chicago, the publicly traded owner of the Ritz-Carlton property, show occupancy rates at county resorts have increased from about 63.5% to 67% in 12 months, while average daily rates have grown nearly 6%.
The recent deal for the St. Regis means all of the local resorts are in sound shape.
“There’s solid ownership of all the properties,” Ueberroth said. “That augurs well for visitors to Orange County.”
