Maryland hotelier to buy
Now WCI, which is scheduled to emerge from Chapter 11 bankruptcy reorganization on Monday, says it "has entered into a sale agreement."
Urgo Hotels of Bethesda, Md., has a deal to buy the property at 3800 N. Ocean Drive, a WCI spokeswoman said. Urgo owns a number of hotels in the U.S., Canada and the Caribbean, including properties under the Courtyard by Marriott, and Homewood Suites, Ritz-Carlton, JW Marriott, Mandarin Oriental and St. Regis brands.
The Great Recession makes for a tough time to sell a luxury hotel. Occupancy at high-end hotels nationwide plunged 28 percent from July 2008 to July 2009, said Jeff Higley of Smith Travel Research.
He blamed the combination of the recession and the "AIG effect" - the controversy surrounding failed AIG's confab at a luxury resort. Since then, Higley said, some posh hotels have removed the word "luxury" from their names.
"Those dynamics have pretty much made luxury hotels ghost towns," Higley said.
Palm Beach County hotels have struggled during the downturn. The average occupancy rate for the county's hotels in July was 53.6 percent, down from 56.2 percent a year ago, and the average room rate of $97.49 was down from $109.53 last year.
Meanwhile, the manager of the Resort at Singer Island said it will lay off 230 workers in October, although it's unclear if the property's new owner will keep the employees. Starwood Hotels and Resorts Worldwide told the Florida Agency for Workforce Innovation that it will cut employees.
The sale contract led Starwood to issue the layoff notice, WCI said.
"Until the sale closes, the resort continues to operate normally and employees continue to be paid," WCI said in a statement.
The resort includes 239 rooms and 66 condos, an infinity pool and another pool with a water slide. It earned AAA's Four Diamond award in 2008.
Room rates for Friday night started at $214, according to Starwood's Web site.
The Resort at Singer Island isn't the only property cash-strapped WCI has attempted to sell. It also had an agreement to sell 260 acres at the northwest corner of Florida's Turnpike and Indiantown Road in Jupiter to EOLA Capital of Jacksonville for $20.3 million, but the buyer withdrew its bid, according to court filings.