|by Douglas Hanks, The Miami
HeraldMcClatchy-Tribune Regional News
Sep. 15, 2007 - South Beach's newest luxury hotel, the Regent, lost its operator Friday after a year of disappointing occupancy levels and room rates, developer Gene Grabarnick said.
Regent Hotels & Resorts officially left Thursday at midnight, nine months after opening the condo-hotel. Vincci Hotels, a chain based in Spain with properties in New York and Palo Alto, Calif., took over Friday. Table 8, the celebrated restaurant in the hotel's first floor, will remain, a spokeswoman said.
The abrupt switch ends Regent's plan to take on the Delano, the Ritz-Carlton and South Beach's other top hotels. A hotel brand with roots in Asia, South Beach was Regent's first U.S. location, with a second opening in Bal Harbour later this year.
Grabarnick, owner of the renamed Vincci South Beach with partner Ronald Molko, said Regent was not adept at running the relatively small hotel. The company, which owns a cruise line, runs seven other hotels around the world that are larger than the 80-room property on South Beach, Grabarnick said. .
"We needed to have a hotel operator that was more attuned to the boutique hotel operation," Grabarnick said. He said Regent brought a "cruise-ship type of thinking" to the property, with strategies more appropriate for a resort with 300 rooms or more.
Calling the decision "mutual," Regent said in a statement it was "driven by the intent to integrate the property into the South Beach market with its predominance of boutique hotels. . ."
Room rates have risen 9 percent this year in Miami-Dade, even as occupancy remained flat, reports Smith Travel Research. With fewer rooms available than last year, the market saw a 4 percent drop in overnight stays at hotels -- which lodging consultant Scott Brush said meant trouble for a new hotel.
"You've got a market that's been pretty tough over the past year. There hasn't been a big growth in demand," he said. Brush said it's extremely unusual for an operator to leave a hotel in its first year, in part because even small hotels need at least 12 months to establish themselves in a market.
"I'm in shock," he said of Regent's departure.
Regent operated the hotel for a share of revenues, and Grabarnick said he and Molko were forced to cover budget overruns amid a financial performance "substantially below" projections.
He said Vincci signed a lease to operate the hotel and will absorb losses.
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