Grand Champions Resort Latest in String of Luxury Projects in Area : New Hotel Hopes to Woo Elite to Desert

The bulldozers have temporarily ceased in the desert east of Palm Springs. The servants’ quarters are painted. The butlers are learning their cues, and guests are arriving for English tea at the spanking new Grand Champions resort.

But the tractors and graders will roar again, having paved the way for just the latest in a string of ultra-luxury hotels rising out of the sagebrush in the resort-saturated Coachella Valley.

Executives of the $120-million Grand Champions at Indian Wells, which opened this month, are undaunted by the swelling pool of resorts aiming for the seasonal influx of tan-seeking tourists. They claim to have something no one else in Palm Springs does--European-style service.

But quick on their servants’ coattails are half a dozen other luxury resorts--marbled destination hotels with golf, tennis, spas and $200-a-night prices--each with its own innovative service. A new Marriott will have gondolas. The year-old, financially ailing Marquis has villas with kitchens. And more European-style service is on the way from a new Ritz-Carlton scheduled to be built across the desert floor from Grand Champions in Rancho Mirage.

“Like Tucson and Scottsdale, Palm Springs is already overbuilt,” said Melinda Bush, publisher of the Hotel & Travel Index, a trade publication. “As one of the fastest-growing resort areas in the country, every hotel has to fight hard for its market share by going after a different type of customer.”

More than 1,600 hotel rooms have been constructed in Palm Springs and the surrounding seven communities in the past two years. Competition is particularly fierce in the desert during the summer, when the average temperature is 108 degrees and hotel occupancy is below 50%. Yet, 2,500 more rooms will be added by the end of next year, according to the Desert Resort Communities Convention & Visitors Bureau.

With all of the new ultra-luxury hotels in the Palm Springs market catering to the same Bally-loafer and Gucci-perfume set, those that offer the attentive service found at small European inns are expected to be popular in the oasis.

“The European, or world-class, tradition is an answer to a market need for a lot of luxury travelers out there,” Bush said. “They don’t hold conventions with thousands of people. The servants know your name. Your shoes are shined when you leave them outside the door. People who want to surround themselves with such niceties are willing to pay for it.”

And those who are willing to pay are not always getting that world-class service, according to Albert DeVaul, chief executive of Century City-based Grand Champions Resort Development Corp. “In the United States, the whole notion of first class has been lost. People just tell themselves the service they get is the best.”

DeVaul, 39, and Grand Champions President Charles Pasarell, 42, both new to the hotel business, thought to build a European-style resort in Palm Springs three years ago and spent two years gathering ideas from luxury hotels around the world. The result is an amalgamation of amenities ranging from a cozy English piano bar serving cognac and cigars to jazzy Californian restaurants with menus by Los Angeles chef Wolfgang Puck.

To DeVaul, European service is defined in the lobby. Champagne is served at the check-in desk, tea is served at four and the sounds of a piano fill the room. The cashier’s office is located in a little room down the hallway. “You never seeing money changing hands,” DeVaul said. “You can’t hear them scream when they get the bill.”

The new hostelries differ from the standard American hotel in that they generally have fewer than 300 rooms, a high ratio of staff to guests, an emphasis on food and dining and a homey atmosphere--all relative novelties in the American resort market, although they have been present in luxurious big-city hotels and small country inns for decades.

Some industry experts, however, question whether true European ambiance can be achieved in the United States, and especially in Palm Springs. “They make the scale too big. They go opulent instead of being understated,” said Madeline Schneider, editor of Hotel and Restaurants International magazine. “All I’ve seen in Palm Springs is glitz. I don’t think anyone there can get away from being large and contemporary.”

Despite the skepticism, hotel industry insiders say that the European-style hotels have an eager market in young millionaires, Fortune 500 executives and corporations scheduling small meetings. Resort occupancy is soaring in the United States, with an average occupancy so far this year of 79%, 10% higher than any other category in the $46-billion hotel industry, according to the American Hotel and Motel Assn.

To the surprise of some hotel consultants, Grand Champions reported that one week before the first guests arrived, it already had 70,000 room nights reserved, with some corporations booking dates into 1991. As the first hotel for Grand Champions, the Indian Wells resort was not expected to have enough name recognition to fare well in the crowded Palm Springs market.

Among Grand Champion’s competition is Marriott’s Rancho Las Palmas Resort, a Rancho Mirage oasis recently given the only Mobil five-star rating in California. The $250-million Desert Springs Hotel, a second Marriott project, is scheduled to open in February in Palm Desert. The 850-room resort, the largest in the desert, will focus on a water theme, with guests transported by gondolas through a series of lakes and canals to the lobby and restaurants.

Bankruptcy Filing

“There’ll be some crossover in all the hotels in the prime season. We see them all as competition,” said Warren Ruello, director of sales and marketing for Marriott. “We’ll all just have to come up with a new enough product.”

Despite its new amenities, the Palm Springs Marquis Hotel felt the pressure from the growing crowd. It has been under Chapter 11 bankruptcy protection since it opened for business in September, 1985. “We’ve been having trouble paying our construction costs,” said Larry Slaten, general partner in the hotel’s management. The $53-million, 264-room hotel was one of the first in the desert to offer suites--villas with a living room, two bedrooms and kitchen.

Ritz-Carlton is being quiet about its 250-room European-style resort, tentatively named the Mirada and scheduled to open in Rancho Mirage sometime next year. But the local convention bureau is already touting it as a rival to anything in the desert.

In Indian Wells, a community of 1,800 with an average household income of $85,000, the number of hotel rooms will soon far outnumber the population. A 550-room Stouffer’s is being constructed a few date groves away from Grand Champions. Two more hotels, a Crowne Plaza and a Westin, are in the planning stages.

Grand Champions has attempted to beat the competition with its service--there are nearly 500 employees for the 350 rooms--and with its orientation toward tennis. Under the direction of Pasarell, a former professional tennis player and founder of the Grand Champions tournament from which the hotel is named, a 12,000-seat tennis stadium has been carved into the desert floor.

Surrounded by a 36-hole golf course it shares with the city of Indian Wells, the 35-acre resort also features the recreational facilities visitors to Palm Springs have come to expect: swimming pools, a health spa and salon and tennis courts of grass, clay and cement.

The building, designed by Newport Beach architect Robert Yamafugi, is a mixture of styles--Spanish arches and Greek columns--commonly described as Moorish. The interior is largely marble, with carpeting and furniture in pink hues.

Like the architecture, everything about the 350-room, all-suite hotel has been borrowed from elsewhere. The villas--clusters of rooms with their own London-trained butlers, alarm systems, courtyards and parking--were patterned after a sultan’s palace in Marrakech. The spa includes Turkish baths. Wooden hangers fill the closets, as they do in Germany.

Standard suites cost $197 a night in the high season, a price that includes a fully stocked bar, bathrobes and shampoo. A penthouse, each with a fireplace and a view, costs about $287 a night. The villas run from about $300 to $1,500, depending on the number of bedrooms.

Long Search for Financing

Pasarell and DeVaul admit that they “pounded the pavement” from financier to financier until they were able to sell their idea to Brad Blackman, the 34-year-old president of Blackman, Garlock Flynn & Co., a San Francisco-based real estate investment firm that had previous investments in the Palm Springs area. Blackman is now chairman of Grand Champions and, provided the company meets with success in Palm Springs, is overseeing plans for expansion.

Grand Champions at Aspen, a private health club, opened last January, and it will eventually become a hotel. The company is developing a resort property at Wailea on Maui, and it has also purchased property in the U.S. Virgin Islands. There is already a line of Grand Champions resort clothing--polo shirts, shorts and sun visors.

“We’re really looking at the Grand Champions as a life style,” said DeVaul. “Nero should have lived this well.”