Pacifica Hotels to grow its partnerships
07 APRIL 2014 5:59 AM
The boutique owner and operator plans to focus on third-party management and establish partnerships to help acquire larger assets, according to President Matt Marquis.
IRVINE, California—2013 was a monumental year for Pacifica Hotels as the boutique owner and operator saw record occupancies, average daily rate and revenue per available room at its 25 managed properties, according to President Matt Marquis.
“We had top line growth of over 10% in most if not all of our regions,” Marquis said of the company’s hotel portfolio, 23 of which are located in California along the coast, along with one in Hawaii and one in Florida.
Most of the properties are in the upscale boutique segment, Marquis said, and about 60% are independent and 40% are branded.
Looking ahead, the company plans to focus on third-party management as a core business.
“We view ourselves as an investment company,” Marquis said of Pacifica, which has equity in all its assets but two. “We decided that we’ve really developed a formula and model with our management style, which includes tight expenses, ranked high on TripAdvisor, able to manage brands, etc. …
“(We) would like to share (the formula) but also come in with partnerships,” he said.
The family-owned company also hopes to leverage some of the institutional partnerships it has developed over the years, which will help the company look at larger assets and properties where there is more equity required, Marquis said.
In addition to focusing on third-party management partnerships, Pacifica is exploring the hostel product, Marquis said. The company has targeted a 30-room hostel in downtown Santa Barbara’s “Funk Zone” in California as its first foray into managing the product.
2014 has started out well, Marquis said, attributing the portfolio’s performance to several events that were held on the coast, including college football bowl games in early January, the Grammys and the Academy Awards.
Two of the company’s properties—the Courtyard by Marriott King Kamehameha’s Kona Beach Hotel in Hawaii and the Hilton Garden Inn Port St. Lucie in Florida—experienced a lag in recovery after the recession, Marquis said.
“Port St. Lucie had some supply issues,” he said. “Kona has been a little bit slow to recover, but the property has hit its stride in the last year or two.”
The rest of Pacifica’s portfolio was able to bounce back quickly, Marquis said.
“During the downturn, our coastal markets were extremely resilient if you compare us against the state flux that California had off the coast or even nationally,” he said. “During the recession, people canceled their trips to Hawaii or Tahiti and came to San Diego. The challenge with coastal assets is your biggest asset: the ocean. There is a constant maintenance of making sure your asset isn’t corroding.”
Pacifica’s Kona property underwent a massive renovation after being one of three hotels in Hawaii to be hit by the 2011 tsunami in Japan, Marquis said.
Pacifica is also in the midst of major renovations at three properties in California, Marquis said.
In August 2013, the company announced plans for a full renovation of the Marina del Rey Hotel, a historic waterfront property located in Marina del Rey, California. The hotel has been closed since the announcement and plans to reopen this summer after a $20-million renovation, according to Marquis.
“Marina del Rey dramatically impacted (our portfolio’s) performance because it’s completely shut down,” Marquis said. “It’s tough for us and our investors to have a property out of service, but it really is more cost effective. We looked into staging the renovation, but it was too disruptive.”
The Sunrise Hotel, which is located in Redondo Beach, California, closed in January to begin a $13-million renovation and is scheduled to reopen in early summer 2014 as an independent property, according to a news release. The hotel used to be a Best Western property, Marquis said.
At the end of 2013, Pacifica announced the deflagging of the Best Western Plus Blue Sea Lodge in San Diego to become the independent Blue Sea Beach Hotel. The change coincides with a $5-million renovation, which includes updates to the hotel’s guestrooms, lobby and common areas. The hotel will remain open during the renovation and is scheduled to be completed by May, Marquis said.
“(The Best Western Plus Blue Sea Lodge) has been a tremendous asset for us for years,” he said, adding the company wanted to take the hotel up to a “higher end boutique” on Pacific Beach.