A Golden (Door) Opportunity
One of the country’s most exclusive resorts, the Golden Door Spa in Escondido, will be sold in coming months to the country’s second-largest hotel real estate investment trust.
Dallas-based Patriot American Hospitality has agreed to purchase the 400-acre hillside resort for $28 million in cash, operating partnership units and a short-term loan, according to Alex Szekely, president of Golden Door.
The resort, which hosts just 39 guests a week, is owned by the Szekely family, including Deborah Szekely, who opened the spa in 1959 and serves as chairwoman.
Hotel analysts say the deal reflects the growing number of hotel operators seeking to cater to wealthy baby boomers by adding spas to their facilities.
“The Marriotts, Ritz-Carltons--all of these companies are trying to incorporate larger spas into their hotels,” said Don Wise, a vice president with CB Commercial Real Estate Group in Newport Beach.
Indeed, Patriot American plans to open stand-alone Golden Door spas at many of the other resorts within its Luxury Division of Grand Bay and Carefree Resorts, including the Boulders near Scottsdale, Ariz., and Carmel Valley Ranch in California.
“The value of this acquisition is found not only in the actual Escondido resort, which by all means is one of the most elite spas in the world; the greater value is our acquisition of the trademarked Golden Door concept,” said Paul Nussbaum, Patriot American chairman and chief executive in a prepared statement.
Alex Szekely and his mother Deborah Szekely will serve as consultants to Patriot while it launches the new business.
Hotel operators are increasingly recognizing the profit potential of spas and most are looking for a well-known name to diversify their portfolio, said Michael Mahoney, a director of Coopers & Lybrand’s hospitality practice.
The Japanese-style Golden Door resort--with its gardens, reflective pools and recently added meditation labyrinth--has been voted “the No. 1 Spa in America” by Zagat’s U.S. Hotel Resort and Spa Guide every year since the survey began in 1988. A minimum one-week stay costs $5,000 and includes accommodations, meals, attire, classes and a personal “esthetician.”
Alex Szekely said his family began thinking of selling the spa after Fort Worth-based REIT Crescent Real Estate Equities purchased Canyon Ranch-Tucson for $57 million in 1996. The family failed to reach a deal with Crescent and shot down an offer by the country’s largest hotel REIT, Starwood Lodging, before accepting Patriot’s bid, which will allow them to continue to work at Golden Door for three more years and give the 130 full-time employees some security. No layoffs are planned.
“We wanted to make sure our staff family and guests would be well taken care of,” Szekely said. He and his mother will continue to operate Golden Door’s sister resort, Rancho La Puerta in Tecate, Mexico, which has been in operation since 1940.
The deal is scheduled to close in April.
