|By Dale Quinn, The Arizona Daily Star,
TucsonMcClatchy-Tribune Regional News
Jul. 4, 2009 - It may be one of the toughest years to open a full-service luxury resort and spa, but the Ritz-Carlton, Dove Mountain, is pushing full-steam ahead.
The hotel bustled with construction activity Thursday, and resort officials said the work will be done in October.
The 250-room resort should open in late fall, said General Manager Michael McMahon, but he wouldn't get specific about an exact date.
Fully staffed, the resort will employ between 350 and 450 people, with most coming from the Tucson area rather than transfers from other Ritz-Carlton hotels, McMahon said.
But by any measure, it's not an ideal time to be opening a resort.
Occupancy rates are at historic lows. Luxury digs in Tucson and across the country have slashed prices to attract customers. And that means resort owners are pulling in less money from each room.
Resort officials likely would prefer to open under better circumstances, said Brian Baltin, a senior vice president with PKF Consulting, which tracks the hotel and resort industry.
"They are going to have challenges, many more than they would have if they opened in 2005 or even 2006," Baltin said. "But assuming they're financed adequately and they've got the financial staying power, in the long term, they won't be affected."
McMahon is optimistic that the Ritz-Carlton, which sits in the Tortolita Mountains northwest of Tucson, will open as the hotel industry rebounds.
He said Ritz-Carlton is growing despite these tough times. The brand has plans to open four hotels in the United States.
"You have to focus on delivering value and I think in difficult economic times, people migrate to brands they can trust and brands that can deliver extraordinary resort experiences," McMahon said.
The resort at 15000 N. Secret Springs Drive in Marana will offer Ritz's level of luxury -- the linens will have a 400-thread count, the pool will feature a slide four stories tall, and the spa will offer tanning areas where water bubbles up from under rocks. Added to this will be a distinctly "Old West" flavor, McMahon said -- the woodwork is hewn of mesquite and Arizona juniper, for instance.
He said Ritz-Carlton aims to have the resort become the first in the Tucson area to achieve AAA's highest rating of five diamonds.
Under normal circumstances, the emergence of a luxury brand like Ritz-Carlton and the prestige it carries would benefit all Tucson resorts, said Brian Johnson, the managing director of Loews Ventana Canyon Resort.
But these aren't normal times, he said.
"When you add new inventory to an already depressed market, we start seeing pricing coming down," Johnson said. "And I'm sure Ritz is not going in with their normal plan in opening a hotel."
In fact, it's probably the worst time to open a luxury property since World War II, said David Brudney of David Brudney & Associates, a hospitality marketing consultant based in Carlsbad, Calif.
"They're going to be hard-pressed to do well," Brudney said. He based that assessment on occupancy rates and revenue per available room for Arizona resorts. Luxury resorts have felt pressure from both the bad economy and the "AIG effect," Brudney said.
The "AIG effect" has led many companies to reconsider spending cash on luxurious retreats at posh getaways since the notorious retreats taken by executives from the insurance company American International Group, or AIG, which got billions in taxpayer bailout dollars.
The resort could succeed and eventually thrive, though, if it does three things, Brudney said:
--Ensures it has proper funding to cover the first six to nine months of operation if occupancy rates are lower than expected.
--Does proper sales and marketing connected with its target audience of both leisure and group business travelers.
--Secures bookings from the group market in advance of the opening date.
McMahon said the main draw for the Ritz-Carlton is that it provides an ultimate package of golf, spa and outdoor activities.
"If we're not dealing an extraordinary experience with the perception of value, we're failing," McMahon said.
And when it comes to business travelers, the Ritz-Carlton, Dove Mountain, has 10,000 confirmed group room bookings for meetings and special events starting in January, he said.
But while McMahon stressed value in the Ritz's packages, he acknowledged it's a brand associated with luxury and that comes with a cost.
"They will pay a premium for a premium experience," he said.
Contact reporter Dale Quinn at 573-4197 or email@example.com.
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