Capitalizing on Bulgari's reputation as a provider of luxury jewels and perfumes, the joint venture partnership expects to invest $800 million over the next five years under a brand known as Bulgari Hotels & Resorts in tourist-rich markets such as Miami, New York, London, Paris, Rome, Southern California and some island destinations.
To ensure the venture operates with the highest quality, Marriott has created a new luxury division based in Atlanta. The company's Ritz-Carlton Group subsidiary will operate as a sister company to Bulgari under the new corporate structure, according to William R. Tiefel, Marriott International's vice chairman. Tiefel and Bulgari CEO Francesco Trapani worked out the deal at a meeting in London.
"Miami is one of the cities we would consider ideal for a Bulgari property," Leeny Oberg, Marriott International senior director of investor relations, tells GlobeSt.com. "Miami attracts many of the kinds of customers who would be interested in this type of traveling experience. The Bulgari properties are expected to be very high-end, trendy and possess the global flair that matches the Miami area well."
The partnership between Washington, DC-based Marriott and Italy-based Bulgari proposes the development of intimate, secure properties with 80 to 300 rooms each. Published trade reports speculate the venture, which already has pooled $114 million in initial financing, could end up spending as much as $500,000 per room in construction costs. A more realistic figure could be $380,000 per room--just by dividing seven properties at 300 rooms into the $800 million targeted portfolio value.
Room construction costs at existing luxury hotels in Miami probably average $300,000 per room, Sheldon Greene, a South Florida hospitality industry expert, tells GlobeSt.com. "If this become reality, it would certainly be a very premier hotel," Greene says.
Such figures are too speculative, says Oberg, who would not even guess whether Miami is the proposed site of an 80-room or a 300-room hotel. She would not even speculate on which submarket the venture is considering. "There would be a huge difference in costs in each city," Oberg says. "Land costs would vary whether you're doing a resort or an urban hotel. I would be very presumptuous to give you numbers."
The new brand expects to use a contemporary style that Bulgari has become known for as an upscale retailer, with each hotel site offering the finest in Italian-style architecture and design, amenities, furnishings and even cuisine.
"It's still pretty fluid," Oberg says. "Hopefully over the next five years, we'll develop five to seven properties, but that all depends on a host of factors. There is not pecking order at the moment, but that will change in the future."
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