Hotel Room Deficit Spurs Interest In Timeshare Option
With the New York and Boston hotel markets as tight as the corners on a well-made bed, you know there's a wrinkle under the covers somewhere when two new properties offer fully appointed luxury suites in the center of the city at an average daily rate of about $125--on a guaranteed volume of only seven nights a year.
In fact, the New York location is even throwing in a year-round corporate membership in its private club, complete with concierge service, drinks priced at cost and two meeting rooms.
The Manhattan Club and Marriott's Custom House are not your typical hotels, but the first two manifestations of a new hybrid species in the hospitality industry: corporate-oriented timeshare properties offering "flextime pricing," allowing customers to break up their one-week ownerships into as many as seven separate one-night stays.
With flextime, corporate travel buyers can offer the use of their suites to one transient traveler for two nights in March, to another for a single night in May, and to a top salesperson as a four-day weekend for his or her family in August.
"We didn't intend the Custom House as a corporate product, but it immediately attracted a corporate audience by its very nature," said Ed Kinney, director of brand advertising and communications for Marriott Vacation Club International.
"A couple of prominent banks in Boston purchased extended amounts of time, and that started a trend in the corporate market that's kind of snowballed," he said. "I wouldn't say their interest was a total surprise, but it was larger than we had expected."
Both the Manhattan Club and the Custom House claim to be the originators of the flextime concept, although Kinney noted that "this is a very incestuous industry--and it's a very good idea." Both are in historic buildings that are being totally refurbished, and both are scheduled to open in August. Even the pricing is similar--$16,990 for a one-bedroom suite for seven non-holiday nights a year into perpetuity at the Manhattan Club, or for the next 60 years at the Custom House. Marriott also offers off-season rates of $12,990; the Manhattan Club will have studios and two-bedroom suites as well.
If a company uses all seven nights a year for the next 60 years, the standard suite will work out to a daily rate of about $40, plus $85 a night to cover the $595 annual maintenance fee.
With 700 "weeks" already sold, Manhattan Club corporate sales manager Bonnie Heller already is considering a price increase; she expects a price rise to $17,990 this month. Both she and Kinney said corporate discounts are available for volume purchasers.
Under construction since July on West 56th Street, diagonally across from Carnegie Hall, the Manhattan Club resides in a 70-year-old building that has been totally gutted, its exterior restored and its interior rebuilt.
The property's 170 units will include studios as well as one- and two-bedroom suites with queen-sized sofas and two full baths.
While the Manhattan Club shares the building with the not-quite-upscale Park Central Hotel, it is a totally separate operation, featuring its own concierge desk, daily maid service, 24-hour restaurant delivery, sauna and health club, daily maid service and private Penthouse Club on the 26th floor.
"We are going to offer everything you'd expect from a five-star hotel, down to chocolates on your pillow--and we're going to bend over backwards to accommodate corporate clients," Heller said.
The Custom House is located in the original 1849 building through which goods coming into Boston Harbor were taxed and cleared for sale. The property will house 80 villas as well as a museum, historical rooms and an owners' lounge and observation deck overlooking the harbor.
Kinney acknowledged that the time-share industry was perceived as relying on "questionable" business practices in its earliest years. However, the entry of major hotel companies like Marriott, Disney, Hilton and Sheraton into what Kinney called the "vacation ownership" segment over the past five years has transformed it into the "single fastest-growing sector of the hospitality industry," he said.
Marriott's portfolio, meanwhile, includes 30 properties, with four new ones--in Boston, Ft. Lauderdale, Orlando and Marbella, Spain--scheduled to open in 1997 alone.
The Manhattan Club, built by well-known Manhattan condo developer Bruce Eichner, is a Resort Condominiums International Gold Crown Resort.
At Electronic Data Systems, where travel manager Jack Witherspoon rents more than 1,000 apartments in major cities (BTN, Jan. 27), the time-share concept has a definite appeal.
"Sure, we'd be interested in looking at this," Witherspoon said. "The question that comes immediately to mind is what kind of guarantees there are that we'd get the rooms we need as we need them. But $125 sounds like a decent rate, and I'd like to have some more information on this.