HREC Vice President Paul Sexton told GrowthSpotter the Ritz Carlton and JW Marriott hotels helped place Orlando on the maps of institutional investors around the globe, as one of the first few independent (not owned by Walt Disney World Resort or Universal Studios) luxury hotels built in Orlando.
“Thirty years ago, you never would have seen luxury hotels outside of Disney or Universal...Nobody dared get into that space,” he said. “But when the Ritz and JW Marriot did extremely well, it showed wealthy people take their kids to Disney.”
Sexton said institutional investors starting paying attention to Orlando around 2013 when the overall Orlando market hit $100 RevPAR, or revenue per available room.
“As part of that, both the Lake Buena Vista submarket and International Drive submarket reached $100 RevPAR,” he said. “People got more confidence in the upper luxury market here. The Four Seasons was a part of that trend.”
Toronto-based luxury hotel brand Four Seasons Hotels and Resorts acquired the land from Disney in August 2008, and retained a 30% ownership interest in the development, in addition to operating the resort, when it teamed up with New York-based Silverstein Properties and Dune Real Estate Partners around 2011 to build the project.
In August 2014, the joint venture opened the Four Seasons Resort Orlando, and later invested $18 million from 2017 to 2020 to renovate and expand the resort’s amenities.
The resort was built with help of financing from Mexico City-based Grupo Financiero Inbursa, which provided a $190 million construction loan. At the time, the mortgage was the bank’s second-largest construction loan issued in the United States.
The Four Seasons Resort Orlando is Central Florida’s only AAA 5 Diamond rated luxury resort.
It sits on 289 acres at and around 10100 Dream Tree Blvd. and provides complimentary transport to four Disney theme parks and Disney Springs. In addition to its 18-hole golf course and golf club, the resort features five pools, three tennis courts, a 13,000-square-foot spa, and a 5-acre water park and entertainment area called Explorer Island.
The price for the real estate pencils down to $550 million, according to two deeds recorded in Orange County. The true total transaction amount was about $640 million, according to Real Estate Alert.
That price includes additional costs to cover furniture, fixtures and equipment, intangible property (such as franchise brand or flag), as well as an additional development parcel adjacent to the hotel.
An investor presentation by Host Hotels states the company expects demand at Walt Disney World Resort to boost up earnings, or what they call EBITDA (earnings before interest, taxes, depreciation, and amortization), at the Four Seasons Resort Orlando.
According to the presentation, the resort saw $36 million in earnings in 2019, up from $19 million in 2016.
The American Hotel & Lodging Association State of the Industry Report, issued in January, does project a modest recovery in 2021 largely due to pent-up demand and availability of the COVID-19 vaccine.
The report found that 56% of consumers are planning to travel this year, compared with 28% who traveled and stayed in a hotel in 2020. The AHLA estimates the hospitality industry won’t reach pre-pandemic occupancy levels until 2023, at the earliest.
Since reopening in July, the Four Seasons Resort Orlando has limited its capacity level.
This past weekend the resort was operating at its capacity level of about 65%, Dana Berry, director of public relations for Four Seasons Resort Orlando at Walt Disney World Resort, told GrowthSpotter.
General guest room rates start at $745 per night for a standard room and go up to $17,000 per night for the 3,300 square-foot Royal Suite.
Thomas Steinhauer, its regional vice president and general manager, said Four Seasons Hotels and Resorts will continue to manage the resort.
The deal “is a true testament to the caliber of our resort and the incredible guest service our team has delivered over the past six years,” he said in an email. “We look forward to a successful partnership with Host Hotels & Resorts for many years to come.”
Host Hotels owns 77 properties in the U.S. and five properties internationally totaling about 47,200 rooms. Billionaire Richard Marriott and his brother Bill Marriott spun the company off from Marriott International in 1993 after facing pressure from bondholders.
In Orlando, the company also owns the 2,004-room Orlando World Center Marriott, which is undergoing an expansion that will add more meeting space and a new water park component.
Other luxury hotel developers active in Metro Orlando include Summa Development Group, which has pledged to bring the first 5-star convention center hotel to Orlando’s Central Business District.
The proposed 33-story mixed-use tower at 319 E. Church St. will include a 228-key luxury convention hotel with more than 60,000 square feet of indoor and outdoor meeting space on three floors and a Sky Club on the 33rd floor with a pool and outdoor dining.
In March, Dart Interests broke ground on the 433-room Conrad Orlando Hilton Resort hotel, part of the $1 billion Evermore Orlando resort.
Conrad Orlando at Evermore will be managed by Hilton Management Services and will feature 40,000 square feet of indoor meeting space, a spa and numerous dining options, including one on its rooftop.
When complete, the resort community will consist of a 20-acre beach complex, an 8-acre crystalline water amenity by Crystal Lagoons called Evermore Bay, food hall and gourmet market, and a two-story Boathouse that will serve weddings and private events.
Source: https://www.growthspotter.com/news/hotels/gs-news-host-hotels-four-seasons-resort-orlando-walt-disney-world-20210505-ovgi2uryzndpfhbxuiyumcjw7q-story.html