Tim Busch had never been to the Bacara Resort & Spa near Santa Barbara, but he knew it was exactly the kind of hotel property for his Irvine-based Pacific Hospitality Group‘s expansion.
The company owns three mid-price Orange County hotels but shifted gears two years ago to become a player in the luxury hotel market.
Busch considered the Bacara resort on 78 acres of oceanfront “a little jewel” that had all the features that fit into Pacific Hospitality’s new plan: The resort is a four-star property in a prized location that would be more than just a nice place to stay for the company’s high-income target audience.
“It’s not just about renting a hotel room, but providing an experience that is unique,” said Busch, Pacific Hospitality’s chief executive.
The Bacara deal closed in February for an undisclosed amount. A week later, the company unveiled its Meritage Collection of luxury hotels.
The group includes the Estancia La Jolla Resort & Spa and The Meritage Resort & Spa in Napa. Pacific Hospitality also operates the Balboa Bay Club & Resort in Newport Beach.
Alan X. Reay, president of Atlas Hospitality Group in Irvine, said Pacific Hospitality chose the perfect time to enter the luxury hotel business, which hit a low during the recession.
“Now it has rebounded,” said Reay, whose firm specializes in California hotel sales. “It’s very, very healthy and very, very profitable.”
He noted that Pacific Hospitality has moved into the California coastal areas where it would be difficult for competitors to come in and build.
“They are definitely getting a very good collection of luxury hotels,” Reay said.
Busch, a lawyer and CPA whose family has an upscale grocery business in Michigan, began with less lofty ambitions when he first moved to Orange County. He started The Busch Firm in 1979, an Irvine law practice that specializes in high net-worth estate planning, real estate and business transactions, and taxes.
His work in real estate soon sparked his interest in hotels. “They were more interesting than retail and office buildings,” he said.
The company’s other hotels include two Doubletree by Hilton hotels in Orange County and the Crowne Plaza Anaheim Resort.
While working on his first hotels, Busch also developed an interest in wine. That led to his creation in 2002 of Trinitas Cellars, a winery in Napa. Four years later, the two ideas came together when he opened The Meritage Resort, which includes the estate cave Trinitas Cellars wine tasting.
The Estancia in La Jolla was added in 2011, followed by the Balboa Bay Club & Resort, which the Pickup family in Newport Beach bought last year. Busch manages the landmark resort for the family.
Pacific Hospitality’s three acquisitions in 18 months have created some growing pains as the company suddenly found itself with 2,000 employees. The longtime Irvine headquarters on Dupont Drive, where 50 people work, is being remodeled to accommodate the new luxury group.
Busch noted that the three new resorts, however, all offer opportunities for improvement.
The Balboa Bay Resort, as the hotel itself was recently rebranded, will undergo a major remodeling.
“It hasn’t had anything done in 10 years,” Busch said.
Henry’s Bistro, which is available only to club members, will close next month for a makeover. It will be converted to more casual dining, Busch said.
After Henry’s is completed in June, Duke’s Place, the bar and lounge known for its live jazz, will be remodeled to take better advantage of its waterfront views. Busch said the Duke’s name may be changed as the company repositions the restaurant to appeal to a younger market. The Duke’s remodeling work is expected to be completed by August.
The next project will be room upgrades, Busch said. There also will be a bigger push to market the club’s 145 apartments available to club members only, he said.
At the same time, Busch’s team is working to find a new clientele for its Santa Barbara property.
Weekend bookings are strong at the Bacara, but midweek traffic has lagged. He wants to market the Bacara to more business groups and events, such as the three-day ECO-nomics conference sponsored by The Wall Street Journal there this month. Because of the resort’s out-of-the-way location and relatively small size, Busch thinks it also will be attractive to groups that want to buy out all the rooms for the privacy of an exclusive getaway.
“I think we can close to triple that kind of business at that location,” Busch said.
Busch also wants to partner with The Bill Foley Food & Wine Society for Bacara events. The Food and Wine Society has relationships with several Central Coast wineries. Busch got to know Foley when Foley headed Fidelity National Financial Inc., the title insurance firm that was based in Irvine before relocating to Jacksonville, Fla., in 2003.
Pacific Hospitality is in the market for other properties, although Busch doesn’t anticipate any more deals this year as it absorbs the three new hotels.
He said the company will continue to concentrate on the West Coast because it is easier to move people around as needs require and to market the properties as a group. The company’s next ventures, however, may be to the north.
“The San Jose area and Seattle,” Busch said. “Those are two of the strongest economies in the world.”
Contact the writer: 714-796-3646 or mmilbourn@ocregister.com
