I figure second home real estate sometimes — often, in fact — involves hotels. Many hotels have residential properties, a trend that started in the late 90′s as a way to maximize concierge and other resources and expand revenue. For example, the Ritz Carlton here in Dallas, the W, Mandarin O, which we almost had at Victory. We even may have condo hotels someday, best example of that being Donald Trumps’ real estate empire. On Monday, the management company of Dallas-based Rosewood Hotels & Resorts was sold to a Hong Kong company, New World Hospitality, for about $229 million. This is not the physical brick and mortar Mansion hotel being sold. It’s the operating company, RH&R, a 50/50 joint venture between Rosewood Corp. and Maritz, Wolff & Co. Most hotels operate this way as a way to streamline and make more efficient the tremendous job it is to run a hotel. Can you imagine what it takes to run and operate a huge hotel? I was at the Menger Hotel in San Antonio last week – ye gads, gorgeous historic property, great service, but the infrastructure needs to be brought into the 21st century. No “mixing” faucets, scalding hot water, HVAC was either warm and muggy or so cold I wore a mink to bed.
Kidding. About the mink.
Anyhow, most hotels work with management companies who bring in reservation systems, staffing, operations, protocols, all the elements that keep the business coming in the door satisfied and happy during the stay, and returning.
Rosewood Hotels & Resorts does a damn good job — the best, really, along with Ritz Carlton. It manages 19 upscale properties in eight countries, each owned by separate entities, including Dallas’ Rosewood Mansion on Turtle Creek and the Crescent, which recently celebrated a silver anniversary that I chronicled for Rosewood Magazine. The Mansion is owned by Caroline Rose Hunt and her children. RH&R has long-term contracts to manage or operate those 19 uber choice properties, which is what makes the 70 employee company so darn valueable.
According to my sources, RH&R was looking to hire a VP of development in Asia, as they just hired one for the Middle East. In the process, RH&R met New World Hospitality. Hi, how are you NWH? NWH was aiming to create a luxury brand but the company was so impressed with RH&R they decided to buy one instead. And RH&R was seriously looking to manage luxury hotels in Asia, where the revenue potential is huge, but developing those networks takes years. So the marriage was a perfect union. NWH will totally preserve the culture and philosophy that we know and love at RH&R. Wouldn’t have it any other way as all 19 of those asset owners are mighty happy with the way RH&R manages properties, so NWH will keep RH&R “just they way you they are”. If anything, it will take more than a year to get the union finalized and organized, and then there may be more than 70 employees here at RH&R!
What are your favorite hotels? Any hotel disaster stories to share?