Amy Cortese

 

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July 9 2008

Caribbean Dreams

Sandals, a resort chain that's synonymous with mass luxury, is targeting an upscale market just as the economy is going downhill.

By AMY CORTESE

The genesis of the Royal Plantation collection—like many things the Stewart family does—was a bit impulsive. In 2000, the Plantation Inn in Ocho Rios, on Jamaica's north coast, came up for sale. Built in the waning days of British colonialism, the inn had hosted luminaries from Winston Churchill to Eartha Kitt. As a young boy growing up nearby, before he created the Caribbean's largest private chain of resorts, Gordon "Butch" Stewart used to take hotel guests out in his fishing boat for extra money—including, once, a topless Joan Collins. The inn had recently languished, but the Stewarts couldn't resist.

"I think it was always one of his dreams to own it," says Butch's daughter, Jaime. After a $12.5 million renovation, it reopened in 2004 as the Royal Plantation Ocho Rios, with suites ranging from $545 to $2,370 a night, and has since been accepted as a member of the Leading Hotels of the World.

The Ocho Rios resort marked a milestone for Sandals Resorts International, the company that Stewart grew from a single, couples-only resort in 1981 to a billion-dollar empire. The company's success was built on middle-market luxury, and now includes 22 properties that draw honeymooners (Sandals) and families (Beaches) to five Caribbean islands. But recognizing that the all-inclusive concept had developed a downscale image (buffet line, anyone?), Sandals five years ago switched its tagline to "luxury included" and embarked on a four-year, $300 million upgrade to distinguish its resorts from more pedestrian competitors. It is the Royal Plantation collection that the Stewarts hope will elevate the company into the realm of "six-star" hospitality, competing with the likes of the Ritz-Carlton. 

"Luxury seems to be the future," notes Butch's son Adam. 

That's a lot of change in the best of situations, not to mention when the market's down, the dollar's a drag, skyrocketing fuel costs are causing more Americans to stay home, and the luxury market is already crowded. And the mission will fall largely to two impossibly young managers. Stewart (a.k.a. "the Chairman") recently turned the business over to two of his children: 27-year-old Adam is president, while daughter Jaime Stewart-McConnell, 29, is managing director of the new Royal Plantation Collection. 

The collection is the antithesis of a chain, says Jaime, who, after graduating from Boston University in 2000 spent a year in a hard hat and construction boots overseeing the development of Ocho Rios, then flew to New York to market the property to travel agents. Each resort in the collection starts with a phenomenal piece of real estate, she says, imbued with a "Jamaican je ne sais quoi."

Over the past several years, the Stewarts have assembled three Royal Plantation properties, including the Chairman's former estate in Jamaica and Royal Plantation Island, in the Exuma chain of the Bahamas. They purchased that in 2007, when they couldn't find rooms at a favorite vacation spot and ended up on a 50-acre private island called Fowl Cay. The family fell for its rugged beauty and 360-degree views. And, as fate would have it, the owners—Libby and Stewart Brown, the founders of the This End Up furniture chain—were looking to sell.

"Half the time we just stumble upon something and fall in love with it," says Adam. The Stewarts are upgrading the island's six villas and clubhouse, and plan to add a spa. A villa that sleeps six rents for $20,000 a week. Another three resorts—in Turks and Caicos, and Negril and Port Antonio in Jamaica—are expected to be completed by 2012.

Royal Plantation resorts are smaller, and have twice the staff-to-guest ratios of Sandals and Beaches. The company has partnered with the Guild of Professional English Butlers Association to ensure top-notch service. At the Royal Plantation Ocho Rios, beach butlers serve up fresh mango drinks, chilled towels, and rosewater face and body mists to lounging guests. 

But the Stewarts must break into a slice of the Caribbean market dominated by brands including the Ritz-Carlton and Marriott, as well as one-off boutique hotels, such as The Caves resort in Negril. It's difficult to stand out in luxury when Mercedes-Benz transfers, oversized bathrooms, and personalized service, all of which Royal Plantation offers, are the norm. Then there is the nagging issue of the economy.

"There is often a collision course when a downturn in the economy crosses paths with a high-end hotel launch," says Diane Clarkson, a travel analyst with JupiterResearch. "This is a tricky time for a launch." A recent survey by the New York-based research firm found that 30 percent of leisure travelers said they would travel less frequently, and those that continue to travel said they would be more economical.

The luxury segment is typically more resilient. An April survey of well-to-do households by American Express Publishing and the Harrison Group found that, while many were insulated from recent economic shocks, they were nonetheless saving more and scrutinizing spending. Still, the wealthiest—with annual discretionary household incomes of $500,000 or more—planned to spend more on vacations and getaways.

The Stewarts say they haven't seen any downturn in their business. Occupancy rates have hovered between 92 and 97 percent so far this year, and the company expects to welcome a million guests through its doors in 2008. "We've built up a reputation, and that carries you through the hard times," says Jaime. After a pause, she adds, "It would be naïve to think it won't eventually catch up with us, so that's why we keep our ear to the ground."

If it does, the Stewarts are ready. In June, they launched their latest venture: Grand Pineapple Beach Resorts, a new line of resorts for the economy segment.

 

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