The currently anemic state of the hospitality sector has been well documented for some time now. Doubly stung by a sharp slowdown in both business travel and tourism—as well as the financing problems that have plagued the commercial property sector as a whole—it seems clear that the sector is in the midst of one of its toughest periods ever. The struggling state of the market, though, is apparently not discouraging the owners of the Arizona Biltmore Resort & Spa from moving ahead with a planned $600 million renovation project. Also undeterred is the Phoenix City Council, which okayed the plan late last week.
That's not to say that the resort's owners—a partnership between Morgan Stanley, Pyramid Advisors, and Investment Partners—are blind to the current market realities. The renovation is largely dependent on future market and economic conditions. The only component of the overall plan that is currently on any set time schedule is the $120 million first phase, which will consist of the addition of a major new spa facility. The design of the spa will hit the drawing boards of architectural firm Gensler immediately, with groundbreaking planned for as early as late 2010.
