As 2020 came to a close, many hotels faced ledgers that were remarkably in the red.
That year, hotels nationwide lost nearly $84 billion in room revenue alone, halving projected revenue based on 2019 figures according to data in the American Hotel & Lodging Association’s 2023 State of the Hotel Industry report.
Amidst this industrywide turbulence, California-based Palisociety was finalizing a deal to acquire four new boutique hotels in a move that immediately boosted its portfolio of properties by nearly 40%. Downtown Wilmington’s ARRIVE was one of the hotels absorbed under the Palisociety banner, and within the first month of the new year, the hotel closed for renovations.
At a time when hoteliers across the country were unsure of what the future would hold, a consideration of age-old hospitality traditions emboldened Palisociety’s move forward. The pandemic led the company to double down on its mission to provide what Jorgan von Stiening, Palisociety’s president, described as the “elements of classic, timeless hospitality” that customers desire.
“Above all else, they want a warm welcome. They want a beautifully designed room. They want a great minibar. They want a great cocktail at the bar. They want great room service,” von Stiening said. “These are not trends. This is what hospitality’s been for about 100 years, 1,000 years.”
Palisociety was not the only hotelier willing to forge a path into the post-pandemic future. Around the same time, South Carolina-based OTO Development purchased Lumina on Wrightsville Beach, a Holiday Inn Resort, then known as Holiday Inn Resort Wilmington East-Wrightsville Beach.
Lumina on Wrightsville Beach underwent its own renovation beginning in October 2021, with the facility’s new look revealed last summer.
The most recent to embark on this process is the Blockade Runner Beach Resort, which was sold to New York-based Castle Peak Holdings by longtime owners Mary Baggett Martin and Bill Baggett in December. In announcing the acquisition, Castle Peak Holdings revealed its intent to revamp the historical resort, which has operated at that site for decades.
For hoteliers with the means to do so, a refreshed look yields an edge to properties able to make the investment, a point emphasized by OTO Development CEO Todd Turner.
“A fresh look and improved amenities help hotels compete with every property in the hospitality space,” Turner said.
Many big hotel brands require periodic renovations of their property, he added, although some companies temporarily loosened those requirements for hard-hit markets during the pandemic.
The redesign of the resort on Wrightsville Beach’s northern end channeled the iconic Lumina Pavilion, which opened in the early 20th century as a paean to the burgeoning development of electricity. Imbued with abundant natural light, the property’s new look is airy and light in a nod to its namesake. Borrowing from the ocean’s color palette, blue accents enliven a generally neutral motif throughout the hotel, as do textural elements including rattan, rope and beadboard.
Lumina on Wrightsville Beach appears to have reaped the benefits of its renovation. In its 2023 report, the American Hotel & Lodging Association noted that business travel – particularly convention and group travel – has not fully rebounded to pre-pandemic levels.
Lumina general manager Brian Elliott said the resort’s current numbers indicate growth over pre-pandemic figures, and while a slight majority of stays at Lumina on Wrightsville Beach are booked for leisure, convention and group travel at the resort contribute to that trend. For example, the hotel was sold out on a February weekday earlier this year due to a convention utilizing the property’s roughly 8,000 square feet of meeting space.
“We do have a lot of group rooms in the off-season that carry us through,” Elliott said.
Like Palisociety’s von Stiening, Turner said the company sees guest expectations as relatively consistent across time.
“Specifics may evolve but overall guest expectations don’t really change,” Turner said. “Travelers want a clean, comfortable room; authentic hospitality; and an experience that is worth the expense.”
In an echo of what Elliott observed, von Stiening said Palisociety’s design-driven properties in cities across the country enjoyed a comparatively quick rebound from the pandemic-induced downturn in 2020.
“We saw our recovery be much faster than other hotel markets overall in pretty much every market where we have properties,” von Stiening said. “That’s because our properties are smaller than your typical hotel. It’s a much more leisure-focused traveler that is our guest, and we don’t necessarily rely on big corporate contracts or big conventions to fill our hotels.”
All hotels within the Palisociety brand are bound together by a cohesive aesthetic identity, the product of a CEO who leads an internal design team. Across the portfolio, the look is playful with layers of patterns, texture and colors, often incorporating original architectural elements to inject a sense of place into each property. New furniture and artwork intermingle with locally sourced vintage finds, something the company calls “a classic Palisociety touch.”
All ARRIVE properties acquired by Palisociety in the 2020 deal were refreshed to align with company standards, but von Steining said ARRIVE Wilmington required more attention than others to fully bring it into the fold. The hotel was closed for a little more than a year for its renovation, reopening in February to reveal its fresh new look.
Palisociety’s focus on refining the guest experience puts the company in one of two camps that von Stiening described as emerging in the industry in the wake of the pandemic. The first is comprised of those like Palisociety who have prioritized an enhanced guest experience, while others have “commodotiz(ed) the product” to offer the lowest price point to customers. Those in the first camp, he suggested, have seen stronger rebounds from the effects of the pandemic.
Blockade Runner Beach Resort’s experience seems to back up von Stiening’s claim. The resort has traditionally attracted guests within driving distance of Wrightsville Beach, mostly from the Triangle. General manager Nicolas Montoya confirmed the resort has surpassed pre-pandemic levels, a benchmark that stretches further back in time for the Blockade Runner compared to other hotels due to the damage dealt by Hurricane Florence in 2018. The business moved quickly to address the damages, and Montoya said the property was “just getting back on our feet in the second half of 2019” before the pandemic struck the next spring.
Because the work in 2019 was a “forced renovation,” Montoya said it didn’t substantially alter the aesthetics of the 1960s-era Art Deco building.
“There was not a lot of time for design and inspiration,” he said.
When Castle Peak Holdings bought the property in December, they indicated an interest in undertaking a more intentional renovation of the space, including both common areas and the resort’s 151 guest rooms, all of which feature views of either the ocean or the sound.
While the new owners take inventory of the property and determine “the best idea on how to improve upon their investment,” Montoya stressed that any changes to the hotel will be loyal to the storied history of the property. The Blockade Runner marked 59 years of operation in March, and throughout the years, the location has consistently housed a hotel or other hospitality property from its prime position with access to both the Atlantic Ocean and Banks Channel.
“We have an important responsibility to carry that legacy,” Montoya said. “But the idea’s not to be the same old, same old. The idea is to innovate and adapt to incoming demands without losing our character and the things that have made us successful to generations of North Carolinians and beyond for many, many years.”