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The new VEA Newport Beach will be a win for both travelers and for the city

By GARY SHERWIN

Last week, I wrote in this space about the new VEA Newport Beach, currently the Newport Beach Marriott Hotel & Spa, and the investment being made by local owners Eagle Four Partners and Lyon Living to transform that nearly 50-year-old property into a modern luxury oasis.

And while the multi-million-dollar construction project is the largest of its kind in the city’s history and the finished project will be gorgeous, if you are a Newport Beach resident, that’s not only the reason you should care about it.

The Marriott has a long history of being one of the largest transient occupancy tax (TOT) generators in the city since it has the greatest number of hotel rooms and has been a significant meetings and conference player. These tax funds generated more than $30 million a year citywide pre-pandemic, supporting essential local services such as police and fire that contribute to our overall quality of life.

The hotel’s new design will include new family and spa suites as well as an overall reconfiguration of the property. But given the enhanced product, these rooms will all be sold at a higher rate. This means fewer people in the hotel paying more per room.

Gary Sherwin

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Courtesy of Visit Newport Beach

Gary Sherwin

In fact, this new rate structure will mean that the property will deliver more TOT than before the project began. This is already happening with meeting groups who are booking now for later in the year at a higher nightly rate than pre-construction.

These are also the types of guests who tend to spend more freely on spa services and food and beverage, which are other profit centers at the hotel. Again, more tax revenue.

This is the benefit of what I am calling our luxury renaissance. VEA will attract well heeded visitors from around the world who like to spend and enjoy themselves on vacation. To this market, a quality experience is always worth the price, if delivered well.

If you’ve traveled anywhere over the last year, you know what I mean. We’ve all gone on vacation to somewhere and stayed someplace, perhaps even a well-known hotel, but the stay was perhaps uninspired. The rooms were tired, the staff apathetic, and the food and beverage mediocre. That’s because the property likely wanted to extract your cash without putting in the investment to make it memorable. You often check out, not necessarily upset, but your expectations haven’t been met. It was a big meh.

Often rooms are sold at a rate that will entice you to book just to get you there. But once you arrive, sometimes it seems the hotel doesn’t care. They want you to check in and then get you out. Wash, spin, repeat.

That is the exact opposite of the VEA business model. Although the Marriott has always prioritized quality service, it is repositioning itself to pursue an even more discerning crowd that places great emphasis on a unique, service-oriented experience. And visitors, many of them global, will be willing to pay because it’ll be worth it.

You can see this approach already in other parts of the city such as Pelican Hill. It was the city’s first true Five Star hotel when it opened in 2008 and gave us our first property with international appeal. It quickly gained a following from the Middle East since the resort made a sizable investment to pursue business there.

If you’ve ever been in that region, you know that what constitutes service there is far elevated over what we see in the U.S. Even a three-star property has more attentive service than many luxury properties here. Pelican, recognizing this, has always emphasized personalized and discreet service to the high-profile guest.

The Balboa Bay Resort, also owned by Eagle Four, also has created a more modern upscale experience after its renovation a few years ago.

In other words, you need to build a great product and then create and deliver exceptional experiences for a crowd that has already seen it all. Pelican, in fact, is working to further enhance their efforts in this area that is ever changing in tastes and styles.

People now want something personal, unique, engaging, inspiring and tailored to their interests. This is the new luxury, one that is approachable but elevated. And worth having bragging rights to take home with them. Bag the stuffy. Bring me something cool and exclusive. 

If you want to understand the vision behind VEA, this is it. The hotel will be built for plenty of Instagrammable moments, but it will also be designed to give you something to talk about with your friends once you get home. And you’ll see the benefit of that approach with more TOT taxes to the city.

Expect this strategy to also play out when the new version of what has been Fashion Island Hotel is announced in the coming weeks. And this business model will be extended to other areas as well such as retail. 

The new 80,000-square-foot Restoration Hardware [RH] store that will be built at Fashion Island starting later this year, employs the same strategy which is why they are building a gourmet restaurant on its rooftop overlooking the water. If all you want is a cheap couch, go visit IKEA.

While there are lots of hotels in cities who want to grind through guests and focus on high volume, VEA and our other luxury hotels are going to up the game in bringing us a new way forward in the tourism industry. It’s a smart way to play that will not only be more profitable for the city but will also elevate the entire destination.

Gary Sherwin is President & CEO of Visit Newport Beach and Newport Beach & Company.