The Four Seasons Resort in Napa Valley opened its doors less than a month ago, but the ultra-luxury property already appears slated to command the second-highest price tag in the national hospitality sector's history.
Real estate investment trust Sunstone Hotel Investors agreed to pay a near-record $177.5 million, or $2.09 million per room, for the 85-room property, where standard room rates of around $2,000 a night are roughly 20 times the national average. The deal with the Four Seasons owner, private equity firm Alcion Ventures, is expected to close before the end of this year. The Wall Street Journal previously reported news of the agreement.
Neither Sunstone nor Alcion responded to CoStar News' requests for comment. Eastdil Secured brokered the deal on Alcion's behalf.
Once finalized, the Four Seasons sale will be a runner-up for the priciest hotel transaction in the nation's history. Hyatt Hotel's $150 million purchase of the Ventana Big Sur resort in California in April — a deal that equated to a record $2.5 million per room — is the highest per-room purchase on record, according to CoStar data.
The global hospitality sector was dealt one of the hardest blows at the onset of the pandemic. Business and leisure travel ground to a halt, regional lockdows imposed stifling capacity and operational restrictions, causing room rates to plummet to record lows amid depressed demand. Hotel occupancy in the United States fell to its lowest level in mid-April 2020, according to CoStar hospitality analytics firm STR, dropping to just shy of 10%.
With travel restrictions easing, the uneven recovery has benefited luxury properties, with high-end hotels outperforming the rest of the national hospitality market. The average daily rate among upscale hotel properties at the end of the third quarter was $360 a night, according to STR data, substantially higher than the $300 per-night-average reported for the same period in 2019.
Comparatively, average U.S. hotel rates are a little more than $116 a night, still below their pre-pandemic levels of about $130 per night.
Rates at the Four Seasons already average about $2,000 a night for a typical weekend stay, according to the property's website, but can surpass $4,000 a night for a larger suite with a view of the on-site vineyard. The resort opened to guests last month, and touts amenities including outdoor steam and relaxation pads, a mudding bay, two pools, restaurants led by Michelin-starred chefs, a wine-tasting room, a spa and its own winery.
The deal would be Sunstone's second venture into the Napa Valley area. It paid $265 million in April for the Montage Healdsburg resort in nearby Sonoma County, another blockbuster hotel deal that shook out to about $2 million per room.