Hotel del Coronado just completed a $400M makeover. But there's still more to come

Travel
Doifoo
October 16, 2023
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44 minutes read

There is little that has been untouched at the 135-year-old Hotel del Coronado these days — from the rich, wood-filled historic lobby and reimagined front entrance to high-end beachfront rooms and a rooftop lounge overlooking the Pacific Ocean.

What has not been touched during the resort’s recently completed, yearslong renovation are the hundreds of original guestrooms housed in the iconic, red-roofed Victorian building.

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That’s about to change.

Starting the first of the year, the hotel will shut down each of the 367 rooms for more than a year as it embarks on the final phase of what is the single largest renovation since the Hotel Del opened in 1888. The price tag for the coming phase: over $160 million. That’s on top of the nearly $400 million that the hotel’s owner, investment behemoth Blackstone Real Estate, has invested in the resortwide makeover that began in 2018.

The last refurbishment of the original hotel rooms, each different from the other, was well over a decade ago. They range in size from 211 to 697 square feet. All 367 refurbished rooms are expected to come back online by spring of 2025.

A model room shows what the guestroom makeover will look like in the Victorian building.

The latest upgrade will entail largely gutting the rooms and replacing outdated bathrooms with new showers, vanities and marble flooring in gray and black tones. The current decor, which bears few hints you’re entering a guestroom that dates to the late 1800s, will feature curved headboards upholstered with woven faux raffia fabric accented with a nailhead trim. The wall behind the bed will be covered with fancifully designed wallpaper depicting climbing vines with large rose- and pink-colored flowers that recall classic Victorian floral patterns.

The bedroom walls will be painted in a soft blue, and artwork will include references to Victorian motifs and subjects to give it that old-fashioned, 1800s feel.

The hallways within the Victorian hotel will also get an update, with new carpeting and wallpaper in shades of gray.

Outdated carpeting in the rooms and hallways will be replaced with more contemporary patterns in shades of gray, and existing murals on the corridor walls depicting the signature red- and white-striped Hotel Del umbrellas will disappear.

The hotel’s design team, Wimberly Interiors, notes that part of the planned transformation is aimed at making the rooms feel more functional, especially in the bathrooms, where there will be full-sized vanities and larger showers minus the tubs.

Bathrooms will be updated as part of the renovation, as seen in this model room.

While the redo may seem like a long time coming, plans for the Victorian guestroom renovations were part of the Hotel Del’s master plan from the very beginning, said Managing Director Harold Rapoza.

“Being that the Victorian building is the heart and soul of the hotel, it was thought to be like the grand ending of this whole journey that we’ve had in the master plan,” Rapoza said. “And this transformation of the Hotel Del — what better way to end it (than) with renovating this 135-year-old hotel.”

The challenge for the interior designers, though, was to make the rooms feel modern and up-to-date without compromising the historic legacy of a landmark that has become immediately familiar not only to locals but also tourists and anyone who has ever seen the film “Some Like It Hot,” starring Marilyn Monroe — and the Hotel del Coronado.

“This is my favorite part of the renovation,” Rapoza said. “The Victorian building is getting a redesign and refresh, but it’s really keeping the style of the Victorian period, so it’s not a typical room design. We wanted to make sure that when customers stayed in this historic neighborhood and walked into their room, they felt that they were in that era.”

A grand entrance

Hotel Del Coronado's new entryway debuted in 2021.

It isn’t as though the Victorian hotel building was totally ignored in the most recent renovation. A portion of it was in fact a centerpiece of the revitalized property.

The now light-filled lobby, which had grown worn and tired, was restored to its late 19th-century roots, making its debut two years ago. All the woodwork was stripped down to its original state and stained to match what it looked like when first built, and the wall-to-wall carpeting was replaced with new parquet floors. Craftsmen also recreated the original crystal chandelier, as well as nearly two dozen of the stained-glass windows that had originally adorned the lobby.

Refurbished lobby in the Victorian building.

Another key change aimed at bringing back the original luster and design of the hotel resort was a new grand entrance reached by a long, landscaped driveway composed of decorative pavers. The relocation of the entrance marked a return to its original location, where guests during the hotel’s early years would arrive by train. Also restored a couple of years ago was the hotel’s original porch — complete with rocking chairs — which had been built over in 1961.

Original front porch is brought back to life.

Biggest investment yet for a Blackstone hotel

The resort’s ambitious makeover and restoration marks a remarkable investment for a hotel owner, even one as huge and well-heeled as Blackstone. It is the largest investment the real estate investment firm has ever made for a renovation of any of its lodging assets, said Rob Harper, head of real estate asset management Americas for Blackstone.

The company has a long, on-again, off-again relationship with the hotel, beginning in 2011 when it came to the property’s rescue with an infusion of cash to avert a potential default on more than $600 million in loans that were coming due. As part of a deal struck with then-owners Strategic Hotels and Resorts and KSL Resorts, Blackstone became a majority owner, and new financing was secured with the original lender.

Then just three years later, Strategic bought out Blackstone’s interest in the Hotel Del. But the parting of the ways turned out to be short-lived. In 2015, Blackstone agreed to buy Strategic and its portfolio of hotels, which included the Hotel del Coronado. It has remained the owner ever since.

“It’s the second time that we’ve owned the asset, so we’re very familiar with the quality of the property, and as a result have a high degree of confidence about what we’re going to be able to do with it and guest demand for this property going forward,” said Harper. “It’s an irreplaceable, iconic beachfront resort, and for an asset of this scale, it does take a significant investment to realize the full potential of the resort.

“It’s also a National Historic Landmark property, and because of that, it requires the highest duty of care, so we care deeply about doing a great job — for the local community, for the guests who have been coming from around the world to the property for over 100 years now, and of course, to also drive an appropriate return for our investors.”

The investment seems to have already paid dividends for Blackstone, a global private equity firm whose investors include pension funds that provide retirement benefits for more than 92 million teachers, firefighters, nurses and others.

Earlier this year, the company arranged a $950 million refinance of the property, in part to help cover the costs of the Victorian room renovations. The property’s current loan, which has a balance of $712 million, was issued in 2017 when the property was appraised at $1.03 billion. The valuation has since surged to $1.6 billion, based on an appraisal earlier this year and is expected to grow even further — to $1.97 billion in 2026, Harper said.

The Shore House, a 75-unit expansion of the Hotel Del, debuted last year.

He was quick to point out that the latest valuation takes into account an expansion of the resort, which last year added 75 high-end residences, accounting for 142 new rooms. Sold as second homes, they were snapped up within months and are available for overnight stays for much of the year.

Blackstone would not disclose details on the hotel’s financial performance since the completion of the resort upgrades but offered this statement:

“The Hotel del Coronado has maintained a consistently high occupancy since pre-COVID and experienced a meaningful increase in ADR (average daily rate) due to increased industry-wide demand for experiential leisure travel coupled with the significant investments we made in the property, which deliver an even better guest experience, and additional room options at a higher price point such a multi-bedroom suites.”

While room renovations are typically done in phases so that hotels can continue operating and getting some cash flow from overnight stays, the Hotel Del has the advantage of 534 newly renovated rooms across the 28-acre property that will still be available to guests during the Victorian redo. Harper also points out that it is much more efficient to do the room upgrades all at once.

“While you do create some operational and revenue displacement when you close all the rooms, it is by far the most efficient way to go in there and do all of the work as quickly as you can without having to work around guests and any sort of other operations,” he said. “And it allows you to do it in a much more shortened period, which ends up being better because you can then unveil the fully renovated building and get back to 100 percent capacity immediately when you do reopen it.”

The Crown Room's rich wood interior will be re-stained as part of the Victorian building renovation.

In addition to refurbishing the guestrooms, the hotel will also be renovating the historic event spaces, including the 9,300-square-foot Crown Room, well known for its holiday brunches. It functioned as the hotel’s original dining room up until 1999, serving breakfast, lunch and dinner. It subsequently offered Sunday brunches until the start of the pandemic, and special occasion brunches during holiday periods will continue following the latest renovation. It operates now primarily as one of several meeting spaces on the property.

As part of the upcoming renovation, the oak and pine wood that defines the Crown and Coronet rooms will be re-stained to their original color, new carpeting will be installed, as will new sconces to mimic the Victorian period.

Also on tap for an update is the hotel’s outdoor garden patio — a meeting space that will get refreshed landscaping, plus a re-creation of a fountain from the 1900s that will feature a bronze statue of Venus.

The Sheerwater restaurant, which is located in the Victorian building and serves breakfast and dinner, will also get a makeover, but the new name and culinary focus have not been finalized yet, said general manager Rapoza. The plan is to close it in January and then reopen it in the fall once the redesign is complete, he said.

The new Smokehouse & Bar, housed in the Hotel Del's historic laundry building, has a bar that is more than a century old.

One new restaurant that has recently opened at the resort but was never part of the master plan is a barbecue-focused eatery called the Smokehouse that is housed in the Hotel Del’s historic laundry building. The cavernous space, which still has the original flooring, brick walls and laundry racks hanging from the ceiling, had been fully renovated and was slated to be a catered event space. But once the idea of a restaurant focused on smoked meats took hold, hotel management was hooked, Rapoza said.

So enthusiastic were they that they tracked down a vintage bar in a Pennsylvania hotel that was built the same year as the Coronado hotel, restored it and transported it to the resort.

One of the key strategies for spreading the word about the Hotel Del as it transitioned to a new, reinvented resort was to focus less on the renovated buildings and more on what the resort refers to as its “neighborhoods,” said marketing director Denise Chapman.

“Ironically, we don’t talk a lot about the physical plant, but we talk about the experiences that we’ve been able to create in what are now these five neighborhoods,” she said. “Each has its own character, its own vibe and appeals to a slightly different type of customer.

“The Del is a very special place that is so beloved that when we really focus our storytelling on the experiences that people can hear and the memories they can create, that’s what brings the renovated spaces to life.”

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