Wasting Away in Margaritaville: Five Questions With Soho Properties’ Sharif El-Gamal
Sharif El-Gamal, the chairman and CEO of Soho Properties, has developed one of the priciest hospitality projects in the city with the Margaritaville Resort Times Square, the franchise’s flagship, at 560 Seventh Avenue. All in, El-Gamal’s tab is over $400 million.
But time, effort and investment is paying off as the hotel now has Parrot Heads flock from far and wide, giving the resort a steady occupancy rate of almost 75 percent in November, after only opening in July. (This comes despite some less-than-stellar reviews.)
December has proven to already exceed this success and El-Gamal said the upcoming January, a notoriously slow month in hospitality, is looking brighter pending any shutdowns from the omicron variant.
El-Gamal sat down with Commercial Observer to answer five questions about how the escapism of Jimmy Buffett’s music and attitude is an evergreen investment, regardless of location or global pandemic.
How has Margaritaville changed the landscape of Times Square as the pandemic continues?
The hospitality industry is going through a difficult time right now in the post-COVID era and just in the new reality of humanity right now, which I think is something that we’re going to have to get used to, at least for the next three to five years. But we are, you know, essentially opening up a corner of Times Square that’s been dormant for the last 60 years. We’ve essentially brought what I believe will become the new anchor of Times Square on 40th and Seventh, the Margaritaville Resort. It’s got five different restaurants, 234 rooms, each one of the restaurants has its own identity, its own menu. It’s a whole ecosystem of escapism, fun, and an oasis in the middle of the island of Manhattan … We’re talking tens of millions of dollars on an annual basis and we have in excess of 200 full-time jobs that have been established here from all walks of life, so I think it’s a real revenue stream for the city and for the local community at large.
What were some of the challenges of getting this project off the ground in the face of COVID-19?
We built this during COVID. This was one of the most difficult executions of my career but our biggest and most important concern was ensuring that things were safe for the people that were working on the job from a construction perspective. But we built this during COVID and we were shuttling buses — private buses — to pick up people so that they felt safe, their families felt safe, during the early beginnings of the pandemic when nobody really understood what was going on. So there was a lot of thinking about the people first and I think that when you do that, as a businessman, you get rewarded for that. And we’re starting to see that in the finished product, which people are raving about. It’s an extremely comfortable and unique environment that we’ve built.
With Margaritaville bringing to mind tropical destinations, what is it about a hotel with this theme in the middle of Manhattan that’s attracting tourists?
Pre-COVID, we had an excess of 130 million visitors that were flocking to Times Square and Margaritaville was such a logical destination to be birthed in Time Square. It’s an oasis, you feel like you’ve walked into a Caribbean environment and the brand is a 40-plus-year brand that’s got a loyal community of followers unlike any brand that I’ve seen. There are 129 different verticals that exist within the Margaritaville family of companies. They have really managed to establish and attract such a loyal following of consumers that they flock to wherever they are in the world. It’s the design, it’s the comfort, it’s the consistency of service and here we are custodians of their flagship location.
What’s next on your agenda?
We are about to restart 45 Park Place, which is a 700-foot condo tower in Tribeca. It is going to be in the skyscape of the new downtown as we speak, but we are looking to finish that within the next 18 months and really bring a different level of service and a different level of product to home buyers, etc. The residential condo market is experiencing a moment and we think that the timing is ideal for us to get our project restarted.
What do you think this means for the future of investing in commercial real estate after the pandemic and as we head into a serious holiday surge with a new variant?
I think we as human beings at this point, just need to keep moving forward. To protect ourselves. We need to adapt to this new normal that is going to be with us for some time … I just came back from Dubai. The Emirates has really established precautions and systems that are in place that are really empowering normal people to feel safe and confident in being able to go out and, and live their lives and I think that we need to pick that up. Going into the Emirates today, the first thing that happened was they took a COVID test. They didn’t care about whether I had a PCR, whether I had a vaccination. The first thing they did was take a test. When I got into JFK, they didn’t even ask if I had a PCR test or if I had a vaccination. They just stamped my passport.
Mark Hallum can be reached at firstname.lastname@example.org.