|By Hannah Sampson, The Miami
HeraldMcClatchy-Tribune Regional News
Aug. 03, 2011--After selling off several of its properties this year, boutique hotel company Morgans Hotel Group said it doesn't plan to seek a buyer for the Delano in South Beach.
Earlier this year, an executive said the company would be "opportunistic" when it came to selling more hotels -- including the 194-room Art Deco hotel.
But late last week, the company announced it had found a different opportunity for the Delano: securing a new $100 million line of credit to fund growth. The hotel is also getting more than $5 million in upgrades to go toward bungalows and suites, public spaces and additional meeting areas.
"That's probably an asset that we will not be aggressively marketing," said CEO Michael Gross during an earnings call Tuesday. "But I say everything else, we will continue to be opportunistic and if it makes sense, we will pursue sales."
The publicly traded company, which is based in New York, operates hotels in New York, South Beach, Los Angeles, San Francisco, Boston, London and Mexico. It owns or has an ownership stake in several of those hotels, though it completed the sales of three in May.
Morgans reported a net loss of $11.4 million for the second quarter of 2011, compared to a loss of $21.1 million during the same stretch in 2010.
In Miami Beach, the Delano, Shore Club and Mondrian all posted gains over the previous year. Occupancy at the Delano increased by nearly 15 percent to 71.6 percent, with average daily rates up more than 6 percent to nearly $465. Per-room revenue, a key gauge, increased 22 percent to nearly $333.
The Shore club saw occupancy increase from 57.5 percent in the second quarter of 2010 to nearly 65 percent this year, with average daily rates of $289 -- a 13 percent increase. Revenue per available room was up more than 27 percent to $187.
At the Mondrian, rates were up nearly 20 percent to nearly $241 and occupancy increased more than 17 percent to 64 percent. Per-room revenue increased nearly 41 percent to $154.
Morgans plans to grow by expanding its best-known brands, such as Mondrian and Delano, through operating agreements. Already in the works are a Delano in Mexico's Cabo San Lucas and Turkey and a Mondrian in Qatar.
The company announced this week that it had entered an agreement to operate a 310-room Mondrian hotel in the Baha Mar Resort that is under development in Nassau. The Bahamas location is expected to be the fifth Mondrian-branded property.
The 310-room hotel is set to open in late 2014, part of a massive project spread across 1,000 acres that will include a total of six hotels, a golf course, casino and conference space.
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