Ritz shells out $100 million to return to Aspen
How anxious was the Ritz-Carlton Hotel Co. to return to Aspen? Anxious enough to shell out nine figures, according to a company executive.
The Ritz-Carlton Development Co., a subsidiary of the world-famous hotelier, is spending about $100 million on its new luxury timeshare club and a restaurant (see story on page 19-A) at Aspen Highlands Village, according to vice president of business development Bob Phillips.
“It was clearly a loss for Ritz-Carlton not having a presence,” said Phillips. “There’s no greater address than Aspen.”
Ritz-Carlton left town two years ago last month. The company once ran what is now the St. Regis Hotel, but company executives quarreled with the Saudi billionaire that then owned it. Ritz-Carlton terminated their management contract and fled town in August 1997.
Its re-entry into Aspen was the result of a coincidence. Ritz-Carlton executives recently decided to follow the lead of some major competitors and jump into the luxury timeshare market.
At the same time, Highlands Village developer Gerald Hines was shopping for an owner-operator for what he envisioned as fractional-interest ownership tourist accommodations.
Bob Daniel, vice president of the Hines development company, said several industry giants were contacted, including Four Seasons, Hyatt and Westin, a sister company to the St. Regis. Hines also talked to several smaller independent operators before selecting Ritz-Carlton.
The Hines organization felt a luxury timeshare program would work best for the condos because it creates a constant supply of people.
“We want the village to be successful, and for that to occur, we really want people here,” said Daniel.
The village will also eventually be home for residents of 211 affordable housing units.
But the 31 free-market, single-family homes and 32 luxury townhouses being built will likely be vacant much of the year – like many other second, third or fourth homes maintained by buyers who can afford Aspen property.
Ritz-Carlton’s Phillips said the club condos will have an average annual occupancy of 75 to 80 percent, and they will be full during ski season.
He said his company will buy a completed project from Hines. Then personalized touches will be added to the condominiums, such as furniture.
Daniel wouldn’t say how much of Ritz-Carlton’s $100 million investment will go to Hines, but it’s clear that it’s almost all of it.
Phillips said Aspen is important strategically to Ritz-Carlton as the only ski resort where the company is located. The company envisions its club as appealing to people who want to spend time in the resort, but don’t want to spend the money or hassles looking after a second home.
The fractional shares in the 73 luxury condos will be sold for between $85,000 and $335,000.
Members will also be required to pay annual dues.
Assuming an average sales price of $210,000, which is probably conservative, the Ritz-Carlton will make a hefty profit on the club. That would generate sales revenues of about $184 million.
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