REIMAGING DAYTONA BEACH
You have to take a stand to change a culture, so Oceans Resorts shut the 600 North nightclub and began marketing the Plaza Resort & Spa in Daytona Beach to meetings and families, not the college kids who made the property Spring Break Central for years.
“Daytona is in the midst of an evolution,” says Doug Kosarek, vice president of Oceans Resorts and senior VP, Ocean Waters Development. The sister companies are owned by Bray & Gillespie, a firm run by long-time developers Charles Bray, CEO, and Joseph Gillespie, president. Bray & Gillespie aims to develop more than two million square feet of oceanfront property in Daytona Beach in the next two years, converting storm-damaged lodging that catered to the spring break crowd to luxury resorts and residences. Call it the upscaling of Daytona Beach.
More properties are being built around the airport and racetrack, while beachfront is going upscale, says Kosarek. “The average age of the properties in Daytona on the beach was nearly 50 years old. A lot of these mom-and-pop hotels were small and contributed to the image of Daytona as not an upscale destination. The hurricanes (Charlie, Gene and Frances in 2004) provided a catalyst.”
Owners of these smaller underinsured or undercapitalized properties were eager to sell them to former investment bankers Bray & Gillespie. “They would buy a distressed property, turn around the operations, renovate it and then flip it,” says Kosarek. “They did that about 20 times before coming to Daytona Beach.”
When Bray & Gillespie hit town in 1998, they decided to create barriers to entry by buying oceanfront properties rather than ones at interchanges where there might be competition, he says. “They considered almost all of Daytona Beach distressed property,” with property values and per-capita income significantly lower than at other coastal communities in Florida.
The most visible symbol of the B&G effect is the323-unit Plaza, a 100-year-old former grand hotel that until recently was a Holiday Inn Sunspree. A $12-million conversion to condo hotels is to begin this month. “The property had kind of devolved into a cluster of bars with rooms attached,” Kosarek says. “Since they bought it, Bray & Gillespie have pumped almost $50 million into its renovation.”
The Plaza also has 32,000 square feet of meeting space. Not only is it a complex renovation project, it's a major marketing challenge.
“It's about reframing the destination in the mind of consumers and letting them see images of Daytona they don't quite recognize,” Kosarek says. “We closed a 20-year-old institution of a nightclub, 600 North, at the beginning of this year. That club and the Plaza pool deck historically would do millions of dollars each March for Spring Break. We announced in February that we wouldn't promote Spring Break on our property, a pretty bold step in our efforts to help change the image of Daytona Beach.”
“Our revenue figures for this March will be higher than last year, on approximately 1,200 fewer roomnights,” says Steve Dorsey, general manager. “By doing conventions, it opens it up more to families.
“We've always marketed this as a convention hotel and toward families,” he says. “The idea is to keep the focus the same year-round.”
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