by Cheryl-Anne Sturken | October 25, 2010

In the past 18 months, two very high-profile luxury properties, The Ritz-Carlton, Lake Las Vegas, and the Daufuskie Island Resort and Breathe Spa, one nautical mile north of Hilton Head, S.C., were forced to close their doors, victims of insurmountable financial debt. Each declared bankruptcy, laid off hundreds of employees and suffered the public humiliation of a fall from iconic grace. That's where the similarities end, though. Because while the Ritz-Carlton is preparing for a February 2011 rebirth under the Dolce Hotels and Resorts banner, Daufuskie couldn't scare up even one bid at a real estate auction held last week for the property. 

That these two luxury hotels have taken such divergent paths is perplexing. Less than five months after closing its doors, which put 350 employees out of work and displaced several groups, the 348-room Ritz-Carlton, Lake Las Vegas, with 32,000 square feet of meeting and event space, was snapped up by Montvale, N.J.-based Dolce. While the hotel is yet to be listed on Dolce's website, which features 27 other properties, it will be the operator's first Nevada property. However, in a recent interview with USA Today on how Dolce plans to reposition the hotel, Barry Goldstein, Dolce's chief revenue officer, said that while changes would include reductions in amenities and service offerings (room service will end at midnight; there will be no turn-down service or in-room amenity box, and the concierge staff will be pared down), "People will still feel like they are getting world-class service." Unless the term “world class" now carries a different guest expectation, and considering the proposed changes, that's a lofty claim.

By contrast, the future of Daufuskie Island Resort, which closed its doors in March 2009, seems downright bleak. At last week's auction held on Hilton Head Island, not one bidder stepped up to the plate for a stake in this once top-ranked golf resort. In an odd twist, the resort's former management company was Atlanta-based West Paces Hotel Group, whose founder and head is none other than Horst Schultze, the former president and chief operating officer of The Ritz-Carlton Hotel Co. Because of pending litigation, West Paces could not comment on the fate of the resort. The Chapter 11 bankruptcy papers filed in federal court in Charleston, S.C., on Jan. 20, 2009, list the management company as a creditor owed $379,403.13.

According to Gadsden, Ala.-based real-estate auction company J.P. King, organizers of the aborted auction, 12 potential bidders had preregistered for the event, but none had presented the required $1 million cashier's check that was necessary to participate. Making the situation even more inconceivable, and surely an indicator of how tough it remains for hotels to obtain capital in this economic climate, was the fact that the minimum allowable starting bid had been set at a paltry $16.5 million.