State of Independence - Mpls./St. Paul Business Travel Guide

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Well, the 230-year-old lodging icon has succumbed. The owner, railroad compant CSX Corp., put the Greenbriere into Chapter XI bankruptcy in late claiming $90 million in lossee during the last six And CSX promptly called in—you guessed CSX is so desperate to unload the hotel that it will provide Marriotr with as much as $50 million to operatew the Greenbrier during the first two years. Marriott will then buy the resortr within seven years forbetween $60 milliob and $110 million. Pending bankruptcy court approval, the deal couls close by summer. Now, no one is aghast at the prospecty of a chain runningthe Greenbrier. The unionz seem amenable to Marriott's arrival.
West Virginiaw governor Joe Manchin publicly applaudecthe deal. Newspapers statewide have cast Marriott'ds arrival as a "rescue." And locals in hardscrabble Greenbrier County support anything that will savethe resort's approximatelyh 1,300 jobs. Like all luxury hotels that have hit the economicf andemotional skids, the Greenbrier's tale is CSX has been a distracted and ham-fistec owner, battling both the hotel's unions and the resort's formedr president, who sued for $50 million. The sprawling resort is physically isolates and expensiveto operate. (CSX recently spent $50 million on improvements in a misguidede attempt to regain the fiftbh Mobil Guide star it lostin 2000.
) And despite the loyaltyt of generations of repeat visitors and fanatic the Greenbrier was disproportionately dependeny on corporate meetings, a travel category that has been devastatefd by the weak economy and the "AIG But the Greenbrier's sale to Marrioty also raises a more universal question: Can any luxurgy hotel or resort thrive—or even survive—as an independent property? In a world where a handfulk of global hotel chains—Hilton, Marriott, Starwood, Accor of France, and InterContinental of Britain—dominate the lodging can a single property, no matter how stand alone? At leasf on the surface, the answer is no.
Abourt half of the properties onthe Condé Nast Traveled Gold List and half of those that earn the prestigiousz five-star rating from the Mobil Guide are part of chain s now, albeit luxury and ultra-deluxe operators such as Four Seasonss or Fairmont of Canada; Mandarinb Oriental and Peninsula of Hong Aman Resorts of Singapore; and Taj of India. The Blackstone Group, which owns many of the world'x best-known luxury independents as well asHilton Hotels, is building a deluxe brand too. It is aligning its independents like the Boca Ratob Resort in Florida and the Boulders in Arizons with the Waldorf Astoria which was created by Hilton using the cachet of its eponymous NewYork hotel.
 Othet luxury brands have huge corporateparentx too. St. Regis is owned by Starwood, best know for its W and Sheraton hotels. Ritz-Carlton is owned by Marriott. And some luxury hotels you may think of as independen t are actually part ofa chain. The Plazza in New York, which reopened last is managedby Fairmont. The Pierre, which reopens in New York this is operatedby Taj. The newlg renovated Mauna Kea Beach Hotel on the Big Island of Hawaij is run by Prince Hotels of The Dorchesterin London?
It's part of the Dorchester which is aligned with the Beverly Hills hotel, the Plaza Athenee in and the Principe di Savoia in "Chains always outperform" independeny hotels, says LodgeWorks' Tony Isaac, a man who knowx the industry from both sides of the LodgeWorks manages hotels in the Hyatt and Hiltonb chains, helped create the Residence Inn brand (now owned by Marriott), and is buildinhg its own Hotel Sierra chain. But Isaax has just built an upscale independenfhotel too. The Avia opened in Januar y in Savannah and was promptly namedr a great romantic getawag byTravel & Leisurer magazine.
Why does a guy who admita chains outperform independents go ahead and open an independentanyway ? "Chains add about 10 points to your occupancy But if you're part of a you pay 12 to 14 percen t for the frequent guest plan, the reservation and other brand programs," he "If you're in the right market, it's not too much of an economicv disadvantage to be an independent—and then you have the flexibilitgy to do what you wish and manage as you That's the argument made by Sean managing director of Trinity Investments, a real estatew firm that purchased Honolulu' s iconic Kahala Resort in 2006.
The beachfronyt property opened as a Hilton hotel in 1964 and spent most of its recen history as aMandarin Oriental. But Hehier believes the Kahala has unique advantage s that appeal to the luxury travelerwho isn't interestexd in brands. "We're not subjecg to a brand policy that may not have any relevancd to aparticular property," he "We manage for the long-term best interestg of us as owners and the luxury travelers as But even Hehir admits you need the righrt combination of factors to survivw as an independent in today's chain-dominaterd world.
In the Kahala's case, it's the unbeatable location on a sandy beacyin Honolulu's choicest neighborhood and the fact that anothef Trinity principal, Chuck Sweeney, has a long history as a hotelp manager. (Sweeney founded the company that became Embassy now aHilton brand.) For James Bermingham, managingh director of the spectacular Montage Resort in Laguna the advantage is a laser-like concentration on guest services and proximityh to wealthy, sophisticated travelers in Southern Both the five-year-old Laguna Beacb property and the new Montagre in Beverly Hills (it opened last fall) can tap into millionws of upmarket buyers within 60 milee of the resorts.
"The 'staycation' trend helpd Montage," he says. "Guests who want an extraordinary luxury experiencw very close to home see the Montage properties and they knowthey won'tg be getting a chain The Fine Print… Most observers think fewer luxuryt hotels will still be independent after the current recession, but thers is a notable dissenter. Michaelp Matthews, who has been the general managerrof top-notch chain hotels (the Ritz-Carlton in Hong and independent deluxe resort (the Ventana Inn in Big Sur) thinks high costs will drive some luxury properties out of the majot chains. "If you're 'flagged' as a you have no independenceat all," he says.
"A lot of hotelse will drop the flag and take the 14 percenf fees they pay and use that money to do what they thinkk makes most sense for theirown hotel." Portfolio.coj © 2009 Cond Nast Inc. All rightsreserved.