Irvine Co. Picks Marriott to Build 1,100-Room Hotel : O.C. Resort Would Be 2nd in Size on California Coast
The Irvine Co. has signed an agreement with the Marriott hotel chain to build and operate the second-largest resort hotel on the California coast.
The 1,100-room hotel would be the first of as many as three resorts to be built on a hilly, three-mile stretch of Orange County’s Irvine Coast, between Newport Beach and Laguna Beach.
The hotel is one of several luxury resorts on the drawing boards or already opened along the Southern California coast, which some developers hope will become an international playground like the French Riviera.
Marriott Corp., based in Bethesda, Md., outbid every major resort hotel chain in the nation to build the hotel, according to Irvine Co. insiders who requested anonymity.
The deal has been in negotiation for seven years between billionaire Donald L. Bren, chairman of the Irvine Co., and Marriott Chairman J.W. Marriott Jr., Irvine Co. officials said.
But the agreement is subject to the Irvine Co.’s approval of Marriott’s design for the hotel, which is expected to cost around $220 million.
It’s also contingent on Marriott winning approval for its designs from Orange County government officials.
If the hotel is built by Marriott, it would be among the chain’s largest resorts. The largest is a 1,500-room hotel in Orlando, Fla. Under the agreement, the Irvine Co. will own the hotel while Marriott builds and operates it.
The largest resort hotel on the California coast is also a Marriott property: the San Diego Marriott Hotel and Marina, which has nearly 1,400 rooms, according to Laventhol & Horwath, a consultant to the hotel industry.
Marriott has hired the Los Angeles office of RTKL Associates Inc., a Baltimore architect, to design the new hotel.
There are no firm designs yet for the new building, which the Irvine Co. hopes to complete by 1993. The hotel is described only as a luxury resort big enough to accommodate business groups and conferences.
The Irvine Coast is the largest piece of undeveloped coastline in Orange County, and was the subject of a long battle between the company and conservationists over its use.
The two sides eventually compromised, and the company scaled back its plans for the area and won approval from state and local government.
The company has government approval to build 2,100 hotel rooms, two golf courses and 2,600 houses on the bare hills, which loom above the Pacific Ocean.
The proposed Marriott is only the latest hotel in Southern California’s seaside resort boom. Since 1985, eight new hotels have been built along the coast, bringing the total to 21.
Occupancy Rate at 72%
The number of rooms has leaped from 4,500 to 7,500 in the same time.
Yet the resorts manage to keep 72% of their rooms occupied, a rate higher than for Southern California hotels in general.
As workweeks get shorter, incomes increase and more families have two wage earners, demand for resort hotels is expected to continue to rise, said Jim Burba, a hotel consultant for accountants Pannell Kerr Forster.
“That’s why all the big hotel chains are looking to expand their resort business,” Burba said.
The new hotels don’t just draw business away from inland hotels, said Sandra Louvier, a hotel consultant at accountants Laventhol & Horwath.
Orange County already has two such resorts, the Ritz-Carlton in Dana Point and the Dana Point Resort, which “are bringing a lot of people into the county and creating a lot of new business,” Louvier said.
Two other big resorts are also under development in the county: the Monarch Beach Resort in Dana Point and the Waterfront in Huntington Beach.
The developers are trying to turn the Orange County coastline into a resort of worldwide renown, although hotel operators acknowledge that, so far, most of their guests hail from California.
Marriott Corp., the world’s largest hotel operator, entered the resort business in 1967 by buying a resort in Arizona. It now operates 18 resorts, including two big ones in the California desert.
Three more are under development in Mexico, the company said.
Marriott has been a strong performer in the hotel industry, posting earnings of $232 million last year on sales of $7.4 billion.
“They’re very highly regarded, and known for operating some very upscale resorts,” said consultant Burba.
