Romantic Getaway Is Getting Practical

These rooms have pampered presidents, princes and prime ministers. Marlon Brando stayed here and ate nothing but liverwurst sandwiches. Madonna slept here too, on her honeymoon with actor hubby Sean Penn.

The lore and the lure of the place have maintained the Highlands Inn’s reputation as a pricey romantic getaway for nearly 80 years. But that’s about to change.

To the dismay of loyal guests, the Highlands Inn is going time-share.

Jumping into an exploding industry, a partnership led by Hyatt plans to sell time-share stakes in the venerable hotel.

The woodsy look that has appealed to visitors as diverse as Julia Child and Billy Idol won’t change. The rooms will still open onto the crashing splendor of the beach at Point Lobos; crisp-smelling pines will still stand guard on the winding paths.

But over the next seven to nine years, Hyatt will sell off the 142 rooms, marketing them to couples willing to shell out $14,000 to $35,000 to own a particular one on a particular week each year.

The inn already attracts many visitors who return year after year to toast bygone honeymoons, celebrate birthdays or sink into a tub for two by candlelight. Hyatt executives are betting that many of these Highlands aficionados will want to buy into the time-share.

It seems, though, that the sales staff will have some winning over to do.

“Horrors,” said Sydney Hanks, a Marina del Rey resident who has visited the Highlands for several years running. “I don’t care for that idea.”

Economics, of course, is driving the inn’s transformation. A $40-million renovation in the 1980s burdened the Highlands with crushing debt. So even with solid occupancy rates and prices of $225 to $650 a night, the hotel slipped slowly into insolvency. A partnership dominated by the Pritzker family of Chicago, which owns Hyatt Hotels & Resorts, bought it out of bankruptcy last year.

“To support the mortgage, we would have to charge rates twice as high as they are now,” Hyatt executive John M. Burlingame said.

Instead, Hyatt opted for time-share.

Once viewed as a sleazy sideline of the travel industry--the domain of high-pressure salespeople pushing shoddy secondhand condos--time-shares are now very, very hot. Sales of time-share units have increased every year for the past decade, and the industry boasts of nearly doubling annual sales volume since 1988.

“Most, if not all, of the major hotels have gotten into it, and just because of that, time-shares got legitimized,” said Bruce Baltin, a hotel industry analyst with PKF Consulting. “It’s really had a rebirth in the last four or five years.”

There are now more than 4,000 time-share resorts worldwide, and sales look likely to top $5 billion this year, according to Chris Larsen, a spokesman for the industry’s trade group, the American Resort Development Assn. Though many of the resorts emphasize family activities, a growing number appeal mainly to couples, Larsen said.

Hyatt’s prices, while high, are in line with other luxury resorts targeting the so-called empty-nesters, whose children have grown and moved out of the house, said Carl Berry, a time-share developer at California Resorts of San Francisco.

Berry predicted that the draw of nearby golf courses will make the Highlands appealing even at top-drawer prices. “Golf addicts,” he said. “If they’ll buy those strange red pants, I suppose they’ll buy anything.”

But Berry warned that Hyatt might have to sell the units for shorter chunks of time, since so many people see Carmel as a two- to three-day escape rather than a full-blown vacation destination.

Like other hotel chains, Hyatt plans to develop a network of time-share resorts worldwide so owners can swap with one another. A couple with ownership rights to the July Fourth week at the Highlands Inn, for example, might trade for an autumn vacation in Puerto Rico or a Christmas ski trip to Lake Tahoe.

So far, Hyatt has only one time-share up and running: the Sunset Harbor development in Key West, Fla., which is 80% full. But by the time the Highlands Inn units go on sale in 1999--after a lengthy permit and review process--couples will be able to swap with resorts in California, Nevada, Florida and Puerto Rico, according to Burlingame, vice president of Hyatt Vacation Ownership Inc.

During the marketing campaign, which could take up to seven years, Hyatt will keep the Highlands’ unsold rooms open for hotel guests. Even when fully converted to time-share, the inn will continue to rent vacant rooms for short stays. The Highlands’ two restaurants will also remain open to the public.

And couples will still be able to rent the sea-sprayed outdoor deck that has been the site of more than 25,000 weddings over the years.

“We’re not going to make one stitch of change,” said development manager Mark Solit.

And of course, converting the inn will not strip it of its history. Old-timers will still talk of the Japanese crown prince who dumped catsup on every delicacy he was served, or of the waitress who plotted to filch the martini glasses that touched the lips of Elizabeth Taylor. More recent guests will still swap tales of celebrity sightings, from Sheena Easton to Yoko Ono to Joe Montana.

But that’s small consolation to guests like Anita Chisholm of Merced, who counts on the Highlands for short rejuvenation trips. “I’m so sick that they’re going to do it,” Chisholm said.

Phoenix resident Ewell Butler agreed. “We would hate to see this become a time-share, because we like to come here for just two or three days,” he said as he strolled into dinner at the inn’s Pacific’s Edge restaurant. “We were just thinking how nice it would be to come back here,” his wife, Betsy, added.

Up the hill from the Highlands, Bernard and Marianne Egerter expressed dismay for a very different reason. They worry that their neighborhood will become clogged with cars from time-share owners inviting guests to visit. And they fear that once the time-shares sell out, Hyatt will let the property slip into shabbiness.

Though the Egerters own a time-share in North Carolina--and happily trade it for vacations around the world--they plan to circulate petitions in an effort to block the Highlands from converting.

“We just don’t think this is the kind of place that should be a time-share,” Marianne Egerter said. “What you have here is a great honeymoon hotel.”