Hilton Head leaders mull whether to pursue 5-star resort

With more than a dozen resorts and thousands of rentals to choose from, Hilton Head Island’s hospitality industry sometimes seems like it’s bursting at the seams.

But in recent years, the town has imagined adding one more option to the mix: a luxury, five-star resort.

Attracting one to the island was listed as a goal by town officials during each of their last two“vision” workshops in 2010 and 2014. They have said such a higher-end resort would help boost Hilton Head’s reputation and attract a higher-paying clientele.

The Hilton Head Economic Development Corp., a town-backed group of business leaders working to lure new businesses to the island, paid $15,000 to a marketing firm to study the issue earlier this year.

But the results were less than illuminating.

“Maybe,” the consultants from Chicago-based CBRE Hotels told members of the corporation’s board last month. CBRE Hotels said it’s feasible the island could support a luxury resort with no more than 250 rooms, an 8,000-square-foot ballroom and nearly that much additional meeting space, multiple food and beverage options and unobstructed access to the beach.

However, the consultants warned at an April 26 corporation board meeting, “the off-season can make it difficult to support a luxury property of substantially larger size. Further, it can be difficult to retain the skilled staff necessary for the operation of a larger luxury property.”

The whole operation would depend on location, cost, demand and timing, the consultants reported. “All of this is in its infancy,” said CBRE Hotels managing director Henry Staley. “For a luxury product ever to be on Hilton Head, there are many, many, many steps that would have to be taken.”

Now, with no clear answer and no exact location identified for the resort, Hilton Head officials continue to spin their wheels.

“I guess we need to do a little more research and try to decide whether or not there’s any economic vitality in it and whether there’s additional demand, and we’re not there yet,” town councilman Tom Lennox said. “Is there room for another one? I don’t know. You’d think if there was, there would already be one.”

In the first report, Vision 2025, turning an existing property into a five-star resort was one of several ways they envisioned promoting and institutionalizing island-wide revitalization. In the Vision 2030 report, it was included as a main element of a strong tourist economy.

The island does have one Forbes Four Star hotel, The Inn & Club at Harbour Town at Sea Pines Resort’s yacht basin, though it does not have ocean views. Sea Pines Resort is in the process of closing the slim gap between four and five stars.

Beaufort County is also home to one AAA Five-Diamond hotel, Inn at Palmetto Bluff in Bluffton.

S.C. travelers looking for a true, Forbes Five-Star resort on a beach must go to The Sanctuary at Kiawah Island Resort. Two others exist nearby in Georgia: Cloister at Sea Island and The Lodge at Sea Island Golf Club on St. Simons Island, Ga.

It was once a real possibility on Hilton Head, said island architect Tom Crews. As he led the effort to rewrite the town’s land-management ordinance from 2010 to 2014, he made sure no changes to height and density requirements would close the door to a five-star resort. There was also serious interest from investors in bringing a luxury resort brand to Hilton Head, Crews said.

“Follow up in committees and discussions we had was ‘Yes, we think that’s an appropriate direction for Hilton Head,’ ” he said. “In fact, it would be a big plus.”

Crews said he’s not sure why those discussions fell off, but he still thinks a luxury resort is possible on the island, as long as it’s developed at an existing site.

Available land outside of gated communities is limited.

“I don’t know if there’s any candidates for development,” he said.

Town officials have identified one potential location for a new resort, the public Chaplin Community Park area. That area, though, is already the site of a proposed linear, pedestrian-gateway park that would connect Shelter Cove’s Broad Creek waterfront on Broad Creek to Collier Beach Park.

Approved in 2012, that project is still awaiting final designs.

Wherever the resort would go, managers of existing accommodations are at odds about whether it would help or hurt the island.

“If we have more luxury properties in the area, the better it is for everybody, because it brings credibility to the destination as a whole,” Craig Schoninger, sales and marketing director at Palmetto Bluff.

Westin Resort sales and marketing director Gail Wargo agreed that a new high-end option would boost Hilton Head’s name and bring in more year-round travelers.

“I think there’s an amazing amount of new players in the luxury resort space. ... Every site and every great destination has not already been developed,” Wargo said.

But Sea Pines Resort president Steve Birdwell said demand is simply too low to support another large hotel.

Hilton Head averages about 60 percent hotel occupancy, compared to more than 70 percent in Savannah and Charleston. Plus, Hilton Head’s resorts already struggle to attract and house enough workers to clean and service all their rooms, restaurants, pools, bars and programs, Birdwell said.

Sea Pines has about a 70 percent occupancy rate in the summer and is still short-staffed by about 20 to 30 people, he said.

“(Another luxury resort) only adds to that housing challenge that we already have,” he said. “It’s a creative idea, but it’s one that really I think has a lot of challenges.”

It’s not yet clear if the goal will survive the town’s upcoming visioning effort, which formally begins in the fall.

This story was originally published May 19, 2016 at 5:22 PM with the headline "Hilton Head leaders mull whether to pursue 5-star resort."