$342M Financing Package Moves Plans Forward for Ritz-Carlton Resort in Puerto Rico
- Aug 06, 2010
It may be tough to attract financing today to hotel resort ventures–especially hundreds of millions in development financing–but the Ritz-Carlton Reserve, Dorado Beach Resort & Spa project in Dorado, Puerto Rico, is an exception. The government of Puerto Rico announced that it has culled $342 million to move forward with the über-upscale, multi-phase project.
Financing for the Ritz-Carlton Dorado comes from public and private sources. To facilitate the upper-upscale, eco-friendly resort project’s first phase, which will yield 130 guestrooms along the beach at a cost of $231 million, Puerto Rico’s Government Development Bank joined forces with FirstBank, UBS Financial Services Inc., Popular Securities and the Puerto Rico Tourism Development Fund to provide the necessary funds.
“The Ritz-Carlton Reserve Dorado Beach Resort & Spa project is especially noteworthy, considering global economic conditions and an extremely complex financing panorama,” Jose Perez-Riera, Puerto Rico’s Secretary for Economic Development and Commerce, noted in a press release. “There is limited availability of private financing for development of major hotel projects around the globe. This is one factor constraining construction of major hotels in the region and worldwide.”
Located 20 miles west of San Juan and easily accessible from Miami, the Ritz-Carlton Dorado will serve as the new and upper-upscale reincarnation of the former Dorado Beach Resort and is just one of the many endeavors that the government has planned to advance its strategic tourism development program.
In the Caribbean market, upscale and upper-upscale hotel properties achieve the highest average daily rates and RevPAR compared to other hotel property types, according to a document released in May by global hospitality consulting firm HVS. “Demand for upscale and upper-upscale properties has increased faster than the demand for luxury properties, which offer greater stability, representing an average of 66 percent of the overall demand for these two groupings, and therefore lower risk,” Andy Reed, analyst with HVS, noted in the study.