Arnold G. York/Publisher
When the Malibu City Council approved the Adamson Company’s Rancho Malibu Hotel in 1998 to be built on a lot on Pacific Coast Highway at Malibu Canyon Road, they imposed certain conditions on the developers.
One condition was that if in five years the owners showed they met the benchmarks the council had set, they would automatically receive approval for an additional 40 rooms. Or, if prior to the five years, they could demonstrate the hotel has been running at a 72 percent occupancy rate for any two years, the company could also apply for the extra 40 rooms.
According to industry sources, the cost of building a hotel room is figured on the basis of the projected room rate, which is based on the room size and how it’s outfitted. If a hotel owner plans to charge $100 per room, for example, it will cost $100,000 to build and decorate. Most luxury hotels, such as the Ritz-Carlton or the Peninsula Hotel chain, figured, in 1998, about $300,000 per room. Given Malibu’s strict protectionist ordinances, and the requirements that have been placed on the Rancho Malibu Hotel, including a $3 million to $5 million wastewater system, it was thought in 1998 that the $300,000 per room estimate was low for Malibu and might require room rates of $400 to $500 per night to make the numbers work. Presently, based upon estimates that room rates will be in that range when the hotel is finished in a couple of years, the project apparently is once again viable.
Just decorating a luxury hotel room could, in 1998, cost as much as $10,000 per room. As one specialist in luxury hotel design put it, “It’s the little things that count.”
“In a luxury hotel you put dust skirts on a bed,” the specialist continued. “A lot of mid-range hotels don’t bother; you see the box springs when you pull the spread back. It’s the details that make the difference.”
Originally written by P.G. O’Malley in 1998 after the City Council approved the hotel.