You are currently in the 2015 Real Estate Impact Conference archive. If you wish to return to the current Real Estate Impact Conference site, please click here.
|Panelists, from left to right: Ian Schrager, Founder and Chairman, Ian Schrager Company; Steven Witkoff, CEO, The Witkoff Group (Moderator).|
South Florida has always been a popular tourist destination, but the number of tourists — and therefore hotel occupancy and revenues — are rising in the region.
Indeed, South Florida’s status as an international tourist destination is fueling extraordinary investment and offers a fertile ground for the launch of new hospitality concepts.
Steven Witkoff, CEO of The Witkoff Group, a New York-based real estate developer, interviewed Ian Schrager in the “New Concepts in Lifestyle Hotels” panel at the University of Miami 2015 Real Estate Impact Conference. They explored Schrager’s latest concepts in lifestyle hotels and his perspectives on the continuing evolution of the South Florida hospitality industry.
Founder and Chairman of the Ian Schrager Company, Schrager developed the South Beach’s iconic Delano Hotel and transformed the fabled Gramercy Park Hotel in New York City. Schrager’s modern lifestyle concepts have revolutionized the entertainment, residential and hospitality industries since the 1970s.
Witkoff started out by asking Schrager why he brought his Edition brand, in partnership with Marriott International, to Miami Beach.
“We’re an opportunistic business. There was an opportunity in Miami Beach and we seized the opportunity,” Schrager said. “It happened to be the first Edition on the continent. I’ve watched Miami grow into an international world-class city right before my eyes and I thought it would be a great opportunity to come and reinvent the resort experience again because I think Miami is undergoing another paradigm shift.”
Schrager is also bullish on the partnership with Marriott. He told Witkoff one of the reasons he inked the deal with the international hotel brand was because there is so much money to be made in the lifestyle segment — and everybody was rushing in.
“I wanted to work with Marriott because I thought a company with that kind of reach, with those resources, was necessary to push the concept forward,” Schrager said. “I thought there was an opportunity to offer something special in a luxury setting. I think there’s also an opportunity below the luxury lifestyle boutique space where you can come in at $100 or $75 or less with the same level of service and sophistication with good value.”
Schrager said Edition is operating at two times projected pro forma on an annualized basis, with 40 to 45 percent of the revenue coming from food and beverage. That’s a smashing success by any measure.
As Schrager sees it, travelers want value. They appreciate the sophistication, the glamor and the amenities but they don’t necessarily want or need a doorman, he said, because they now have suitcases on wheels. From his perspective, succeeding in the lifestyle hotel segment means rethinking what’s most important to travelers today and giving them the attentiveness and luxury service for a new generation. In other words, it’s not your grandparents’ hotel experience any more.
Schrager recently launched his Public Hotel brand in several cities with those perspectives in mind. Public is a new genre of hotel promising “great value, great service, and great style” that aims to set a new industry standard. Miami is his next stop.
“I like the Biscayne Boulevard corridor and I like downtown Miami,” Schrager said. “They could have a sophisticated hotel at a good rate and attract people with food and beverage. We have been talking about a couple locations in Miami, one near the ocean.”
Although there’s been plenty of focus on trendy Wynwood, Schrager isn’t convinced the emerging neighborhood is ready for high-end projects. Wynwood, he said, reminds him of Brooklyn’s Williamsburg. “I think it’s not safe at night there yet, but it’s cool,” he said. “I’m keeping my eye on it.”
Schrager is still in love with Miami Beach. He recalls his first projects there, when Miami Beach was a “tropical resort, a playground with no industry.” Schrager said the same factors that made Miami Beach attractive to tourists in the Golden Age of the 1940s and 1950s make Miami Beach attractive to tourists today.
“When you go to the Caribbean you’re on the beach and you’re in the ocean but there’s really nothing to do,” Schrager said. “Miami has a dimension where you can vacation and be relaxed and mindless during the day but at night go out and have fun.”