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Puttin’ On The Ritz (And Four Seasons, Langham And Raffles): Inside Boston’s 5-Star Hotel Rush

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Boston’s ongoing economic fortune and boosted international profile have led to a rush of luxury hotel expansion. But catering to the glitterati is a delicate development dance.

Four Seasons Hotel and Private Residences One Dalton Street, Boston
The Four Seasons Hotel One Dalton Street

When Boston’s first Ritz-Carlton at the end of Newbury Street became the Taj in 2007, local anger resembled the feelings Wednesday night after the Bruins lost Game 7 of the Stanley Cup Finals 4-1 to the St. Louis Blues.

Millennium Partners, which sold the original Ritz-Carlton, gave up the grand dame and kept the Ritz-Carlton flag for its glassy, new, high-rise, mixed-use complex across Boston Common and the Public Garden. 

A Boston Globe columnist wrote that it was galling that such a “soulless place” got to keep Boston’s Ritz-Carlton crown. Boston magazine described a city letting out a “collective groan of mortification” when the old Ritz-Carlton’s lion head flags were lowered to make way for the Taj logos.

Modern celebrities were more likely to be found around the corner on Boylston Street at the Four Seasons or Mandarin Oriental, but the Ritz-Carlton was still a city landmark locals liked to have around without visiting every day — a hotel version of the Freedom Trail.  

The Ritz-Carlton was built in 1927 and survived the Great Depression, when a hotel manager would keep all the lights on in the near-empty hotel to make passersby think it was booked in even the darkest of economic times. It had been half of Boston’s original luxury hotel scene (along with the Fairmont Copley Plaza) — and the city would not accept its name change. 

But Boston has since embraced its new guard of luxury, with the power dining scene keeping reservation books filled at five-star venues like the Boston Harbor Hotel and the original Four Seasons. Cranes in the sky and a backlog of plans at the Boston Planning & Development Agency show Boston is ready for more. 

The city is expected to double its number of luxury hotel rooms in the next three years.  

“Boston for the last 10 years has been making up for a lack of development in the last 20 or 30,” Twelve Points Wealth Management co-founder and principal Manny Frangiadakis said. “All of that has created a domino effect in attracting luxury hotel product.”

Puttin’ On The Ritz (And Four Seasons, Langham And Raffles): Inside Boston’s 5-Star Hotel Rush
The Taj Boston overlooks the Boston Public Garden.

The 215-room Four Seasons One Dalton opened at the end of May, putting Boston on an exclusive list of 10 cities around the world to have more than one Four Seasons. Wynn Resorts’ Encore Boston Harbor will add 624 five-star hotel rooms to the market when it opens June 23. 

Raffles Hotels & Resorts, part of AccorHotels, is partnering with The Noannet Group and Saunders Hotel Group to develop a Back Bay outpost of the five-star Singaporean hotel brand. It will be the luxury hotel flag's North American debut.

The old guard is also getting a facelift. 

The Langham, Boston, in Post Office Square is closed for a yearlong renovation that Managing Director Richard Bussiere says will make it “the very best hotel in Boston.” Even the Taj is getting an extreme makeover, expected to complete by 2020. 

About 10% of the more than 9,000 hotel rooms in the Boston and Cambridge development pipeline are in the luxury sector, according to Pinnacle Advisory Group Vice President Sebastian Colella. The luxury sector’s average daily rate increased by nearly 6% to $501 in 2018, the highest ADR increase of any hotel segment in Greater Boston in 2018. 

It doesn’t hurt that Boston’s revenue per available room, a key hotel metric for success, is the fifth-highest in the U.S.

“Most brands would want to be represented in metro Boston, up and down the scale, because the market is so healthy,” CBRE Senior Vice President Dave McElroy said.

Puttin’ On The Ritz (And Four Seasons, Langham And Raffles): Inside Boston’s 5-Star Hotel Rush
The planned Raffles Hotel & Residences is expected to rise nearly 400 feet behind the Fairmont Copley Plaza, one of Boston's original luxury hotels.

But beyond rate and occupancy statistics, luxury hoteliers are taking note of Boston’s rapidly growing international profile and tech- and life science-driven economy.

Boston’s Logan International Airport has grown to 56 international destinations, up from 30 in 2010. Life science and technology companies are attracting talent from other states and countries, and both industries are filled with high-paying jobs.

The combination has spurred a new generation of hotel guests (and local patrons) who want more than the classic Boston luxury hotel. 

“The new Four Seasons is a big shift,” said Spot On Ventures principal Robin Brown, a co-developer of the Mandarin Oriental and Omni Boston Hotel at the Seaport. “It’s going against the original as well as the Boston Harbor and Mandarin. That indicated to the Taj it was time for this massive repositioning.”

Many of Boston’s luxury hotels are mid-rise, historic buildings cloistered in the Back Bay. Even the Boston Harbor Hotel and the original Four Seasons, both products of the 1980s, were built in keeping with the historic nature of the surrounding city. 

The new era of luxury is about making an imprint on the skyline. 

The 61-story Four Seasons tower is now Boston’s third-tallest, the glittering Encore Boston Harbor logo is impossible to miss when landing at Logan, and the development plan for Raffles Back Bay Hotel & Residences has it rising nearly 400 feet over Back Bay. 

They also help locals land business.

“There absolutely is a dog and pony show that goes on,” Frangiadakis said. “When you wine and dine clients, there are some people who are just in the next stratosphere, and they like the finer things.”

But the height and haute décor has less to do with glamorous guest experiences and more to do with how to have a five-star property make financial sense. The permitting and approval process in Boston is tough, but construction costs are even tougher. 

Rising hard costs have reached the point where it runs north of $1M per room to develop a high-end hotel, according to Brown. That means room rates would have to run $1K each night at a stand-alone hotel to justify the cost. 

Most customers, even the uber-wealthy, would find that hard to stomach, so developers have increasingly looked to a condo component and accompanying front-end sales to help make a project pencil out. In turn, residents get to tap into the hotel's luxury amenities.

Both of Boston’s Four Seasons hotels, the Ritz-Carlton and the Mandarin Oriental have a residential component, and the planned Raffles hotel will also come with condos.

“Boston has very difficult barriers to entry for real estate, very difficult barriers to entry for hotels and enormous barriers to entry for luxury hotels,” Brown said. “It’s impossible to build a high-end hotel here without some mixed-use component.”

The Luxury Runway Has No Limit

Puttin’ On The Ritz (And Four Seasons, Langham And Raffles): Inside Boston’s 5-Star Hotel Rush
The main entrance to the renovated Taj Boston Hotel will be on Newbury Street.

Doubling Boston’s luxury room count in three years may seem like a recipe for oversupply, but the high cost of doing business here and approval headwinds have developers optimistic the market will be able to accommodate both the new entrants as well as ones not yet announced.

The limited luxury supply is also giving developers a sense there is unmet demand in the market. Only 5%, or about 1,200 rooms, of Boston’s entire hotel inventory is classified as luxury.

“There’s no question other luxury brands are interested in Boston. We talked to several others who we ultimately didn’t go with,” Noannet Group President Jordan Warshaw said. “If they’re interested in our site, they’ll be interested in others.” 

The development partnership announced the Raffles news more than a year ago. In a Wednesday interview with Bisnow, Warshaw said the relative quiet ever since isn’t a sign of a stalled deal or that Boston is hitting its luxury limit. Plans have been revised since Raffles came onto the project, and the development partnership is wrapping up financing. The hotel is on schedule to open in late 2021 or early 2022, Warshaw said. 

Boston remains a vibrant gateway city, and Marriott Senior Vice President Tom Papelian said its appeal to domestic and international travelers keeps the company busy evaluating the market for which brands to add next. 

“There’s a lot of demand for our brands in Boston and in most major metro markets, but Boston in particular,” he added. “We see opportunities to expand our footprint for luxury hotels in the market but look at it on a case-by-case basis.”

Brown, also a former general manager at the original Boston Four Seasons, isn’t concerned by a glut of luxury hotel rooms in Boston and said the slow approval process keeps development at a measured pace. 

While the new Four Seasons tower may signal a new five-star style, it will also likely appeal to a new contemporary traveler rather than eat into the original Four Seasons’ lunch and client base.

Four Seasons One Dalton hotel spokesperson Robert Chinman said the hotel is more an extension of Boston’s growing market of business and leisure travelers. 

“Boston is doing so many great things that it can support two properties,” he said. “It’s a great signal.”