Skift Take
Karim Alibhai's began his career at a Best Western motel. In the decades since, his firm Gencom has bought, sold, and developed eight Ritz-Carltons and dozens of other luxury hotels. Here's his formula.
Early Check-In
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Karim Alibhai knows better than most how to make luxury hotels profitable. He's the founder and top boss of Gencom, which has owned, part-owned, or developed 8 Ritz-Carltons and 150 hotels under other brands over three decades.
Gencom's traction is notable, given how tricky it is to get the economics right in luxury hotel deals and development.
Prime real estate is pricey. White-glove service is expensive. After such costs, where are the profit margins? Equally challenging is how luxury hotels have seen softness in room rates during most of the past decade, according to STR data as analyzed by Bernstein Research.Yet Gencom has defied the averages with its portfolio worth about $7.5 billion.
Last week, Gencom acquired majority ownership in The Ritz-Carlton Key Biscayne resort in Miami for an unpublicized sum.
The real estate investment and development firm plans a $100 million renovation to start next year. Gencom knows the property better than anyone. It co-developed and built the 17-acre resort, which debuted in 2000. It later sold its majority stake.This November, Gencom will open Nekajui, a Ritz-Carlton Reserve, in Costa Rica, as a luxury mixed-use complex being built ground-up across 1,400 acres.
The three dozen units cost roughly between $3 million and $13 million each. That's the highest price per square foot Costa Rica has seen for such properties yet.Last July, Miami officials okayed Gencom's and Hyatt's plan for a billion-dollar development project — with construction set to start next year.
Miami Riverbridge will be anchored by a redeveloped 615-room Hyatt Regency Miami. Aerial view photo-illustration of the upcoming Miami Riverbridge project, which a Hyatt Regency hotel will anchor. Source: Gencom. Negotiate With the Luxury Hotel BrandsAlibhai has pushed the major luxury brands to give Gencom