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Hotels: A Favorite Celeb Investment Celebrities are discovering that hotel investments are not just fun to own, but profitable too. Monday, December 08, 2008 David Wilkening

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Actress Leslie Caron is perhaps best known for her charming childhood role in the film “Gigi,” but decades later American guests of the small inn she owns in Burgundy not only recognize her but often discuss her films.

“Our non-local clients like to tell me the films they liked and how it sometimes changed their lives. Local people could care less. They come for our fine food, the courteous reception and the décor. They usually haven’t even seen my films,” says the now 78-year-old actress.

Caron is part of a growing trend: stars or celebrity ownership of hotels, inns and B&Bs.

“This follows the celebrity chefs. They started opening their own restaurants and now it’s actors and actresses who are hotel owners,” says Lisa Grossberg, general manger of the New York City-based Buckingham Hotel.

“Hoteliers have been involved in celebrity restaurants for quite a while, so this is a logical step,” says Katie Davin, an associate professor of hotel management at Johnson & Wales University.

Do celebrities help draw guests? No question, Caron says, though she dutifully and diplomatically adds that guests also come for her renowned restaurant and the beauty of the French countryside.

“[Stars] draw a certain market of people who want to be seen with the rich and famous,” says Grossberg.

Multi-talented Merv Griffin, who was a singer and game show entrepreneur, died a billionaire. He helped jumpstart the trend years ago by buying a string of hotels that included the Beverly Hilton in Beverly Hills. He even owned a casino resort in Atlantic City. But Hollywood in recent times has discovered hotels. For example:

•    U2’s Bono and the Edge saved Dublin’s old Clarence Hotel from demolition in 1992 and in the process turned the whole neighborhood around. Bono and his band regularly drink at the Octagon Bar, which delights guests.
•    Robert Redford built 66 cottages to help house guests in Utah in 1969 for his Sundance Film Festival.
•    Actor Robert DeNiro is among owners of the 88-room Greenwich Hotel in TriBeCa in New York City.
•    Retired actress Doris Day and her son Terry Melcher run the Cypress Inn in Carmel. Pets allowed, of course.
•    Clint Eastwood’s The Mission: Ranch Resort presumably makes his day. Also located in Carmel, it’s a farm turned into a hotel.
•    Gloria Estefan and her husband producer, Emilio Estefan Jr. first bought the 43-room Cardozo Hotel in Miami’s South Beach. Earlier this year the couple also opened the luxury 94-room Costa d’Este in Vero Beach.
•    Actor John Malkovich is among four investors who bought the 81-room Big Sleep hotel in Cardiff in 1999. More sites are being planned for the small chain.

Film director Francis Ford Coppola is a multi hotel-owner. He has created three boutique hotels. One property, the Blancaneaux Lodge in Belize, he found while filming “Apocalypse Now.”

“The area was very remote, wild, with a beautiful river and waterfall, and I thought I could write here,” he says. He used the lodge for several years as a personal retreat before opening it up to other guests.

He not only made a profit but got so much praise that he opened two more hotels: Turtle Inn on a beach in Belize and La Lancha in Guatemala near the Ancient Mayan ruins of Tikal. He is now working on a fourth hotel in Buenos Aires.

“Rather than stay in a hotel for a year while he works on a movie, he figures ‘why not buy a hotel?’” says Jay Shoemaker, who is the CEO of Coppola’s company.

Coppola’s hotels are money-makers that are worth “well into eight figures,” says Shoemaker. But Coppola is not a hands-off owner. Shoemaker says he regularly gets 20 e-mails a day, seven days a week, regarding the properties.

In the case of Caron, she has drifted away from hands-on management.

Her hotel is called “Auberge La Lucarne aux Chouettes,” or “The Owl’s Nest.” It’s located about 130 kilometers from Paris.

Caron says she got into the hotel business in large part because she loves antiques and older homes. “I hate ruins and the idea to invite people into a warm, inviting setting to make them happy appeals to me,” she says.

Twelve years ago, Caron started restoring four 17th century boat warehouses into a small hotel and restaurant. The inn today has four suites that are decorated with many personal touches.

When she first started, Caron did much of the management by herself. She took telephone calls and handled reservations.

“Today, I do an awful lot -- marketing, supervision, administration, investments. But I don’t do the day-to-day work, however,” she says.

She did cook a meal at the inn, but only once. “I not only cooked a meal, I did the washing up and peeling and slicing. The only time I tried to serve, I broke a plate full of food. It’s not so easy,” she says.

Some celebrity-owned hotels have found a chorus of critics. A couple who stayed at Estefan’s South Beach property reported no soap in their room, hotel personnel going up and down hallways at all hours with loud two-way radios and long service delays at the restaurant. And since they happened to be there during Estefan’s birthday, they were “blasted with music well after 2 a.m.”

DeNiro’s hotel has hit a variety of snags including getting zero stars for its Ago restaurant by the New York Times critic Frank Bruni and a penthouse design that ran afoul of the city’s Landmarks Preservation Commission.

Some celebrities are more involved in hotel business than others. “The bigger and more successful a celebrity is, the less chance there is of them being hands-on,” says Anna Wood, director of sales and marketing for US’s the Clarence.

In the case of Malkovich, he must be successful because the actor has little involvement in the business side of the operation, according to his partner, Cosmo Fry.

Owning a celebrity hotel can be a good idea under some circumstances, say hotel industry people.

“It’s a good idea if they are great business people and understand the service-hospitality industry,” says David Edelstein, who owns a real estate company, Tristar Capital that includes among its ownership a W South Beach Hotel & Residences.

“A celebrity name gets people in the door but I don’t think it’s enough to sustain loyalty,” says Johnson & Wales’s Davin. It also may do little to draw business travelers.

“They are not that star struck; they want their business amenities, loyalty points and a good bed,” Davin says.

Chard Martin, a vice president and partner at the Buena Vista Hospitality Group, says celebrity-owned hotels can do fine under certain circumstances.

“The formula for this is like anything else: hopefully bring in professional management,” he says.