The Evolution Of Luxury Hotels With Branded Residences

Phil Keb has an engineering and construction background, coupled with expertise in finance and development, to craft tailored solutions for leading international luxury hotel brands. His adept management of complex transactions is underscored by a diverse portfolio that includes trendy hotels catering to tech-savvy millennials, unique CBI financing for a Caribbean resort, and innovative Sharia hotel financing in the Middle East. His dynamic approach and keen market insights consistently yield exceptional results, a testament to his unwavering dedication to excellence and innovation. Phil’s commitment to confronting challenges head-on positions him as a trusted advisor in the ever-evolving global luxury hospitality and development industries.

Could you share your journey in the hotel industry and outline your key daily roles and responsibilities at IHG?

I started my journey in the hotel business with Hyatt in the mid-1980s, followed by a rewarding tenure at RitzCarlton from 1991 to 2002. Over this period, I undertook many roles, transitioning from engineering, design, and construction to real estate development in the early 1990s. Surviving Marriott’s acquisition of Ritz-Carlton in 1995 proved pivotal, as it deepened my understanding of the hotel and branded residential development business. At the time, Marriott set the gold standard for hotel development, providing me with invaluable insight into the financial complexities of the industry. Since then, my focus has been on the developmental aspects of the industry, representing various stakeholders, including brands, management companies, owners, and developers, with a particular emphasis on luxury hotel projects.

My responsibilities at IHG center on bolstering the development efforts of the upper luxury brands Six Senses and Regent, with a specific emphasis on Regent in the Americas. There are a number of long-term relationships in the ownership and development part of the business, through which we are working on a number of exciting new projects throughout the region. In nearly every scenario, we have found that new construction projects require some form of branded residences to support the investment required for the hotels.

How has the concept of branded residences evolved over time?

Originating at New York’s The Sherry-Netherland in the 1920s, the concept of branded residences gained momentum in the 1990s and has since then garnered significant international attention, most recently in Europe, Asia, and the Middle East. What began as a trend has evolved into a permanent fixture in the high-end hospitality market, and in my mind a requisite for new upper-luxury hotel development.

 At IHG, most of our current branded residential projects are situated outside of North America, underscoring the international trajectory of this trend. Pioneered by Ritz-Carlton and Four Seasons in the U.S. during the 1990s, the concept has expanded to include a multitude of completed projects with various luxury brands across several industries, including hotel, fashion, and automobile brands, with a notable recent surge in activity outside of the U.S.

How do branded residences benefit various stakeholders?

Branded residences offer a myriad of advantages for developers, hotel owners, and unit owners alike. For developers, the additional profit gained from building and selling these units is essential to counterbalance the steep costs associated with developing luxury hotels today. An emerging trend is the necessity of more branded residential products relative to the number of hotel rooms to offset the rising cost of luxury hotel construction. Hotel owners benefit from the cost-sharing arrangement with unit owners when operating the mixed-use facility.

Additionally, hotel owners can capitalize on incremental cash flow by offering unit owners the option to participate in a rental program, thereby boosting the hotel’s inventory and revenue, a particularly advantageous arrangement in resort settings. Unit owners enjoy an elevated level of service provided by the homeowners’ association (HOA) as well as the prestige associated with residing in a luxury branded project. For those who opt into rental programs, unit owners benefit from a portion of the rental revenue of their units to offset ownership costs.

What is your piece of advice to peers and aspiring professionals in the industry?

My advice to peers and aspiring professionals in the industry is to remain persistent and adaptable. Develop a deep understanding of market trends and consumer preferences while consistently prioritizing the delivery of exceptional guest experiences. Foster robust relationships, actively network, and continuously seek opportunities for learning and growth. In this dynamic field, success often arises from a blend of expertise, creativity, and an unwavering dedication to excellence.