GEORGE TOWN, GRAND CAYMAN, CAYMAN ISLANDS—Given its base here in the Caribbean, one might envision Howard Hospitality Group (HHG) as a laid-back, “when opportunity knocks we may get up to answer” type of operation, but an observer would be as wrong as wearing a heavy wool suit to dinner in this tropical town. And while HHG’s execs—Chairman/CEO Howard Sitzer, President/COO Michael Wilkings and SVP of Operations Darren Law—do embrace the island life, their attitude toward business is far from toes—or heads—in the sand.
Having recently launched its signature Yara restaurant concept at the 285-room Margaritaville Beach Resort Grand Cayman which it redeveloped, owns and operates on Seven Mile Beach, HHG is now planning the launch of a new limited-service hotel brand geared toward millennial business travelers, as well as orchestrating the development of a $285-million, 456-key destination resort on Pageant Beach here.
The extended-stay brand concept, dubbed Locale, is expected to debut as early as this autumn on Seven Mile Beach near the area’s Camana Bay dining/retail district.
HHG is bringing the concept to life on the bones of an abandoned three-story condominium project, which it acquired below replacement cost in an off-market deal last year, and is currently revamping.
Its accommodations, including 42 guestrooms and lofts, are being designed as live/work spaces, blurring the separation for those who welcome 24-hour contact and connectivity.
Public spaces also will offer advanced technology. F&B outlets will include a proprietary urban Italian kitchen (Bonfire) and a gelato shop (Swirl). HHG is also incorporating leased retail into the Locale model—there’s 6,000 sq. ft. of space on the ground level facing the main road—as well as partnering with local businesses to foster “authentic” activities as part of the guest experience.
“There is definitely a need in Grand Cayman for a business-oriented, select-service hotel,” said Wilkings. “Grand Cayman, unlike most Caribbean islands, is very business oriented. It is the sixth largest banking center in the world. There are hundreds, possibly thousands, of companies registered in the Cayman Islands and that whole activity is supported by legions of lawyers, auditors, accountants and everything else these organizations require. So there’s a large community of non-tourist businesspeople that live and work on Grand Cayman and those companies have a constant need for cost-effective accommodations for people who are coming to the island… Most of the hotels on Grand Cayman are quite expensive. So to have a reasonably cost-effective, select-service hotel that is modern and has all the facilities these people want, there’s a great need for that and why we’re pursuing that concept. It’s a demand-led concept.”
Also underway are plans to develop a 7.1-acre site where the island’s first tourist property, the Pageant Beach Hotel, opened in 1954. According to local news website CaymanCompass.com, the site at the southern end of Seven Mile Beach has been vacant since the hotel burned down in 1975.
The proposed resort would be positioned as a five-star hotel and offer seven F&B outlets; a rooftop bar and grill, spa and infinity pool; three other pools; a movie screening room and 35,000 sq. ft. of function space.
In addition, the as-yet-unnamed/unflagged project will feature water sports, recreational activities, eco-walks and a kid’s club. Six waterfront villas, as well as condominiums, will be offered for sale.
“It’s a gorgeous project. And we were just fortunate. It kind of knocked on our door; we weren’t really looking to do that. We thought it was a great opportunity and we just moved on it,” said Wilkings.
HHG was launched in 2014 by Sitzer and Wilkings, whose backgrounds are in real estate/investment and hospitality, respectively. Friends for three decades, the duo had never done business together and felt the timing was right to invest in hotels, given the sector’s popularity.
“There’s this huge and accelerating growth in travel and tourism and it was just flowing down to the hotel and resort sector, which is accretive to the real-estate values, “ said Wilkings, who acknowledged he and Sitzer set out looking for opportunities with “no grand scheme” in place.
Opportunity did knock when a mutual friend informed the duo about a resort asset, Treasure Island, on Grand Cayman. Wilkings answered and headed to the islands.
“What we discovered was not only was it a fantastic asset to make our first acquisition, but Grand Cayman was an amazing place. The more we got to know the country and people, the business, the tourist and social climate, the more people we met, the more we liked it. It’s a unique Caribbean island with unique characteristics that make it a very attractive place to base a business,” said the COO.
Howard Hospitality Group did acquire the former Treasure Island and holds the property as Margaritaville Beach Resort Grand Cayman under a long-term trademark license agreement with Margaritaville Enterprises.
Now headquartered here with some 200 employees, the COO considers it an ideal location to expand HHG’s business, but does not see expanding to branch offices, e.g., in the United States. “Everything you need for a business is there in Grand Cayman,” said Wilkings.
However, it doesn’t mean HHG will remain cloistered here, filling the Cayman Islands with project after project.
“We’ve started there and we like it there, but we have a big ambition for international growth,” said the COO. “It’s our intention to invest and expand in a number of areas. In fact, our next project is in Playa del Carmen in Mexico. It’s a 200-room resort location on the last piece of undeveloped beachfront land in Playa del Carmen.”
HHG also is looking “very, very closely” at a hotel project in Florida. Wilkings could not comment further other than to say it is a resort hotel on the beach.
“We’re also looking at a project in Spain at the moment very seriously… Behind that, we have a number of opportunities we’re in the process of evaluating. So, it’s our intention, very much, to be internationally focused,” he said. He added HHG’s MO is to seize on cogent opportunities as the sole investor, but welcomes subsequent investment by qualified partners.
The company also plans to grow the Locale brand as well as its Yara restaurant concept.
“We definitely want to expand the [Locale] concept,” said the COO. “We think there’s great potential for this more design-led, lifestyle-led, select-service positioning. We definitely would like to take it into the States, and possibly into Europe.”
He expects the majority of Locale projects to stem from conversions. “We’re not opposed to ground-up but there are so many advantages if you can find the right conversion opportunity: speed to market, reduction of risk are big factors when you’re trying to get a hotel developed and open,” said Wilkings.
For his part, Law said he’s working on “getting Locale going, making it a market competitor within the hotel industry here on the island,” as well as ensuring the second and final phase of renovations on the Margaritaville property are progressing. He estimated four to five months to completion of that section of the property.
Wilkings said the first phase of renovations at the resort has been completed, delivering 110 guestrooms; Yara; the main lobby and its lobby bar, License to Chill; a pool bar and grill known as “It’s Five O’Clock Somewhere,” a Margaritaville brand; and the main swimming pool area.
The second phase entails completing the balance of the guestrooms (175), of which 75 are expected to open within 60 days and the remainder by year’s end; opening a Margaritaville retail outlet; debuting an all-day restaurant, Banana Wind Café; opening a second swimming pool, a gym and a European charcuterie. HB