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Luxury Vacation Destination Transforming a Vision into a Premier
by Marge Lennon
Owner
Lennon Communications Group
Since they first became involved in timesharing over 25 years ago as the Shell Group, the company currently known as Shell Vacations LLC has never been one to follow the crowd. Innovation has almost always been their middle name. They were one of the first to offer a true points-based vacation club. They were the first to franchise their resort systems. And now, they have achieved another first by collaborating with a private hotel company to create what is certain to become the premier luxury travel destination in Napa Valley, California … the 116-key Vino Bello Resort and 158-room Meritage Resort at Napa.
Although there is no formal partnership, Shell Vacations and the Pacific Hospitality Group (PHG) are connected in spirit and vision with their futures entwined much like the leaves of the grape vineyards that surround their property. For the last three years, the companies and their staffs have worked side by side to design compatible resort features, amenities and an overall complementary architectural style.
Even though it welcomes nearly five million annual visitors, the Napa Valley has been underserved and without a luxury mixed-use hospitality development that could provide hotel rooms, timeshare accommodations, host conventions, wedding receptions and meetings, all segments of the travel industry. Shell Vacations CEO Shelly Ginsburg had a vision that the Vino Bello, combined with a luxury hotel, would not only fulfill this growing need, but would also become the flagship resort of his company.
But transforming the vision to reality was no easy task. The obstacles they had to overcome would have made other companies walk away. Over four years ago, Shell Vacations had a marketing location in the Crown Plaza Anaheim Resort, a Garden Grove, California hotel owned by the Pacific Hospitality Group. Perry Bergelt, the Regional Sales & Marketing Director for Shell Vacations – West, had lunch with his friend Tim Busch, who owned the hotel and several others. During the luncheon, Perry casually mentioned that Shell Vacations was in the midst of developing a property in Napa. Later, Bergelt put Busch together with Shell’s VP of Acquisitions and Development, Jeffrey Server. The rest, as they say, is history.
The bumpy road to development
But it was a bumpy road, to say the least. Reminisced Server, “It was like one of those medical TV shows where they continuously restart a patient’s heart with paddles. We had to do this just about every day to bring it back to life! It actually died five or six times. The original partners left, the lender who took over went bankrupt, and the insurance company they assigned it to went into receivership. The last two problems required lengthy court approvals.”
The Napa Planning Commission had changed it’s view on the project since the original approval and since they were trying to push all new development downtown, were not enamored with building this project in its Napa Corporate Park location. After two one-year extensions of the use permit there would be no more which required Jeffrey’s constant work to make the Commission’s final deadline. But approval was granted about five weeks before the deadline expired in August, 2004.
The property was the only remaining Napa land that had been zoned for vacation ownership before the city passed a moratorium against future timeshare developments. Shell Vacations finally received development approval and closed on the property in July 2004.
Development plans called for a hotel and a premium purpose-built vacation ownership resort. A major element of the Planning Council’s approval was based on Shell’s – and the hotel’s - commitment to create an architecturally and environmentally acceptable design that blended with the surrounding Napa Valley area.
Then came the rains …
“Before the first shovel of dirt was dug, we spent over two and a half years negotiating and working through various written agreements,” explained Jeffrey. “Then we moved into the building process. But after the designs had been determined and construction began, the rains came. Over two successive winters, it was relentless.”
From late 2005 into early 2006, it rained continously, breaking all records for the area and making it the wettest winter in the history of Napa, thus inhibiting construction for both the Meritage and the Vino Bello. With so much rain, the gypcrete, stucco and paint simply would not dry. Both properties experienced serious construction problems and delays and what was supposed to take 14 months to build, took nearly two years.
Although construction costs had escalated dramatically during this time, Server and his development team of of VP of Construction Steve Morell and Elaine Lazarus, who directs the design team who creates the interior designs, furnishings, fixtures and equipment, and the overall esthetic for the development were able to open the Vino Bello within budget, without sacrificing their original plan.
“As we got closer to the new opening dates, coordination between the Meritage management and Shell Vacations Hospitality became critical, explained Susan Kelley, Senior VP of Shell Vacations Hospitality. “In addition to several contractual agreements, the Pacific Hospitality Group is the management company for both the Meritage and the Vino Bello. This has resulted in significant benefits to everyone involved, including cost effective economies of scale for the two properties. The joint check-in facilities bring to future vacationers and business travelers the best of both worlds through combined contributions from both PHG and Shell Vacations Hospitality with first-class operations and customer support services.”
Important to Vino Bello’s timeshare sales efforts, after being awarded the contract to manage the timeshare units, PHG agreed to allow Shell Vacations to market within the hotel, thus creating a tremendous benefit from a marketing perspective.
A win-win for both properties
There are other significant benefits to both Shell Vacations and PHG. For example, Michael Lennon is the General Manager for both the Vino Bello and The Meritage Resort. Each property shares the expenses related to housekeeping, engineering and guest services and benefits from the economies gained from this relationship.
Explains Lennon, “From the financial side, it’s a win-win for both properties. We don’t have to duplicate positions and save tremendous costs by having one laundry system, one property management system and one telephone system. It’s really a seamless operation. Equally important, guests will feel that it is one complex. There is no delineation between properties. This will become even more evident after the opening of the wine cave and spa in early 2007.”
A veteran hospitality executive, Lennon knows that it is not just the facilities and amenities that create the culture for a luxury resort. It’s the people who work there. They are the ones who help enhance the guests’ experience.
Explains Lennon, “It was important for us to select candidates who had the ability and skills to understand not only the needs of a traditional hotel guest, but also the differing needs of timeshare owners, people attending group meetings and conventions, weddings, charitable and fundraising events.” (Napa is a very popular site for weddings and the 15,000 square feet of contiguous meeting space at the Meritage makes it the largest in Napa.)
“With responsibility for hiring the 150-person staff,” he added, “we wanted to find the right people who wanted to become a part of this project. We looked for energy, enthusiasm, a bright smile and an intrinsic ability to connect with people.”
Shell Vacations Hospitality’s management team will remain involved from a training perspective to help educate the PHG staff on the nuances of managing a vacation ownership resort. As a traditional hotel company PHG has not had the experience of handling the vacation ownership guest, who historically comes to their resort with an “ownership mentality” and remaining longer. This is unlike the normal transient hotel guest who stays for only a few nights.
Unlike a decade ago, when traditional hotels considered timeshare resorts their competition and were frequently at odds, this unique coupling has turned into a great relationship. With many years of development challenges now behind them, both PHG and Shell Vacations are looking forward to a mutually beneficial long-term professional relationship and eager for the opening of the Wine Cave and Spa early next year, which will add the frosting on the cake to what is already a glamorous facility.