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The pluses of carving out a chunk of a hotel to create a separately branded, smaller hotel include higher room rates, a wider spectrum of guests and the chance for a hotelier to try out a new concept without remodeling hundreds of rooms.
After listing the perks, Dave Kaplan also noted a downside to a “hotel within a hotel”: “It’s a complicated partnership,” said Kaplan, whose company operates the Rooms at the Walker Inn, which occupies a floor of the Hotel Normandie in Los Angeles.
While the concept of a hotel within a hotel was inaugurated more than a decade ago at MGM Resorts International’s Mandalay Bay, September marked the first time the idea had made its way beyond Sin City. At the beginning of the month, the 10-room Rooms at the Walker Inn opened, featuring vintage decor and a secret hallway to the Walker Inn, a downstairs bar that targets craft-cocktail aficionados.
More telling was the Miami debut in September of Nobu Hospitality’s latest hotel headed by celebrity chef Nobu Matsuhisa, which opened its first hotel within a hotel at Las Vegas’ Caesars Palace in 2013. With Nobu Hospitality overseeing everything from the hotel’s design, furnishings and in-room menu, right down to its scent, the 181-room Vegas hotel offers its guests additional amenities such as preferential seating at the property’s Nobu restaurant as well as VIP access to Caesars Palace’s Omnia Nightclub.
The Nobu Hotel Miami Beach is a 206-room hotel fully contained within the 61-year-old Eden Roc Miami Beach. The Nobu hotel is built inside a tower designed by noted Miami architect Morris Lapidus and features a Japanese motif as well as a 24-hour, in-room dining menu specially created for its guests. It eventually is slated to have a private pool.
While room rates for the Eden Roc range from $279 to $579 a night for late-October stays, Nobu Hotel’s rates start at $429 a night and work up to $829 for the Nobu Zen Suite. Nobu Hospitality’s investors include actor Robert DeNiro and Australian developer James Packer.
“It’s about trying to maximize the real estate value and bringing a higher [average daily room rate] to a floor or two,” said Jan Freitag, senior vice president at hotel-industry research firm STR. “You’re taking a large property and carving it up.”
The concept was originated in 1999, when Las Vegas’s 3,015-room Mandalay Bay Resort and Casino opened. That property dedicated its top five floors to a 424-room luxury hotel that is branded and managed by Four Seasons. Four years later, Mandalay Bay added a 1,122-room tower that housed what was called TheHotel at Mandalay Bay.
Then, two years ago, owner MGM Resorts renovated the tower and reached a licensing agreement with lifestyle hotelier Morgans Hotel Group to re-flag the property under Morgans’ Delano brand, bringing what MGM Resorts vice president of sales Stephanie Glanzer calls “a South Beach feel to the desert.”
“Because it’s an all-suites property, we’re obviously going after a different audience” than the rest of Mandalay Bay, Glanzer said. “We’re looking for guests who don’t want all of the bells and whistles of Las Vegas but want more of a private hideaway.”
Further evidence that the concept might slowly be gaining popularity is that the two most recent examples of hotels within hotels aren’t being carved out of behemoth properties. While Caesars Palace and Mandalay Bay each offer more than 3,000 rooms, Miami’s Eden Roc has 631 rooms, and Hotel Normandie has just 94.
Both the smaller hotels are looking to replicate the success that hotels within hotels have achieved in Las Vegas. While Caesars Entertainment does not disclose occupancy or room-rate figures for the Nobu Hotel at Caesars Palace, rates for late-October stays start at $419 a night, or about $10 more than rooms in the larger hotel.
“Nobu Hotel Caesars Palace has consistently been recognized as one of the best luxury hotels in Las Vegas, with some of the highest room rates and occupancy levels within the city,” said Nobu Hospitality CEO Trevor Horwell.
Meanwhile, down the Strip, Glanzer estimated that MGM Resorts charges $20 to $50 a night more for the Delano than it does for rooms in Mandalay Bay proper. And while Four Seasons representatives declined to respond to a request for comment, Glanzer described the hotel as “a very high performer, financially.”
Sоurсe: travelweekly.com
