St. Regis: Spa, timeshares will rejuvenate business | AspenTimes.com
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St. Regis: Spa, timeshares will rejuvenate business

Janet Urquhart
Aspen Times Staff Writer

The St. Regis-Aspen failed to lure about $3.4 million worth of business last year largely because it can’t offer what luxury hotels in other ski resorts do – a world-class spa, according to Richard McLennan, the hotel’s general manager.

Citing a downward trend in revenue at Aspen’s largest hotel, McLennan and other St. Regis representatives outlined the need for a proposed $30 million renovation to the Aspen City Council on Tuesday.

The hotel’s owner, Starwood Hotels and Resorts Worldwide, has proposed a new 15,300-square-foot spa in the hotel and the conversion of 98 existing rooms into 24 fractional-ownership suites that will be sold in one-11th shares. In addition, 20 new hotel rooms will be constructed inside unfinished space within the St. Regis.

Although all of the changes will take place internally, with no alterations to the exterior of the Dean Street hotel, the change in use from standard hotel rooms to fractional units requires city approval.

Council members offered no objections to the project Tuesday, but put off any decision until at least June 9, when the financial implications to the city’s coffers will be discussed.

The city’s timeshare regulations require the applicant to show the conversion won’t negatively affect city tax revenues. St. Regis officials contend there will be a shortfall in 2003 and 2004, during construction, and have proposed a $195,000 payment to the city.

The city had calculated a $313,000 fee.

That issue aside, it’s not the government’s role to dictate how the St. Regis should do business, said Councilman Tony Hershey, expressing willingness to approve the proposal.

“I’d like you to have the flexibility to succeed,” agreed Councilman Tom McCabe.

Since the Aspen hotel, originally a Ritz-Carlton, was completed in late 1992, competition from other luxury resort properties has intensified, according to McLennan. He noted the St. Regis’ competitors in the fractional/timeshare market and offered a list of luxury hotels in other ski resorts that have spas that are many times the size of the existing 4,800-square-foot spa at the St. Regis.

Other Starwood fractional properties experience higher occupancy rates than conventional hotels in the same market, added Matt Avril, senior vice president and managing director of operations for Starwood Vacation Ownership.

The higher occupancy means more people dining and shopping in Aspen, and generally spending more money because their accommodations have already been paid for with their purchase of a fractional share, he said.

But for groups looking to hold conferences at ski resorts, top-notch spa facilities are a key factor in their decision to go somewhere else, according to McLennan.

“We track, like maniacs, the business that we lose, and every group we bid on … if we lose that piece of business, we find out where it’s gone and why we lost it,” he said.

Last year, $3.4 million in potential business went elsewhere.

“In 2003, so far this year, we have lost 6-and-a-half million dollars. One million dollars alone was lost during the month of March to the Ritz-Carlton in Bachelor Gulch,” McLennan said.

Councilman Terry Paulson questioned whether it was the cost of staying in Aspen, rather than the hotel’s minimal spa amenities, that drove potential business elsewhere.

“No, absolutely not,” McLennan said.

“Specifically, these groups are going to these other facilities because they have a spa component,” he said. “All of these spas are world-class spas. We’re not talking about a couple of rooms for massage. We’re talking about the works.

“We have to build one. We feel very strongly about it.”

The new St. Regis spa will be constructed in the basement of the hotel’s main building, usurping some existing meeting space.

The hotel, Aspen’s largest conference facility, would see a drop from 25,763 square feet of total meeting space to 20,813 square feet, but the St. Regis would still be able to accommodate all of the conference groups it currently hosts, noted attorney Gideon Kaufman, representing the applicants.

The hotel also plans to install accordian-style walls in its 4,500-square-foot ballroom so it can be divided into three smaller spaces when they’re needed.

Dale Paas, manager of Aspen’s Limelite Lodge, voiced support for the St. Regis’ plans, but Roger Haneman, manager of the St. Moritz Lodge, voiced objections to both the fractional-ownership component – and resulting loss of standard hotel rooms – as well as the loss of conference space. He is also a Planning and Zoning Commission member.

“Conversion of conference space, which cannot be replaced any place else in town, I think is a bad idea,” Haneman said. “What we don’t have is anyone offering additional conference space.”

The spa will help draw additional conference business during the shoulder seasons, countered McLennan. And instead of closing down in the fall, the renovated St. Regis will remain open year-round, he said.

[Janet Urquhart’s e-mail address is janet@aspentimes.com]


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