BETHESDA, Maryland—Pebblebrook Hotel Trust announced it has acquired the 257-room Gurney’s Newport Resort & Marina in Newport, Rhode Island for $174.0 million.
Gurney’s Newport is a 10-acre waterside resort located on Goat Island in Newport, Rhode Island. The independent resort has water views of Narragansett Bay as well as Newport Harbor and the Newport Bridge. Gurney’s Newport has 257 guestrooms, including 18 suites and 80,000 square feet of flexible indoor and outdoor event space, surrounded by lawns, water views, a marina, and a lighthouse. The resort contains a variety of waterside eateries, including Showfish Newport and The Pineapple Club, which feature ingredient-driven menus with healthy bites, locally sourced dishes, and seasonal classics. The resort also contains a 22-slip full-service marina with access to Gurney’s Newport. Additional resort amenities include a 3,000-square-foot spa with nine treatment rooms, outdoor fireplaces throughout, a lobby bar, a grab-and-go coffee shop, a 3,200-square-foot waterside pavilion with a saltwater outdoor pool with poolside cabanas, an indoor pool, a fitness center, and an ice-skating rink.
“We are very excited to acquire this extremely unique premier resort within the vibrant, high barrier to entry Newport market,” said Jon E. Bortz, chairman, president, and CEO of Pebblebrook Hotel Trust. “Gurney’s Newport is the only resort-style property in Newport, and it is one of the very few true waterside resorts on the Northeastern Seaboard, drawing strong demand from New York, Boston, and Providence. This unique New England retreat features an expansive footprint overlooking Newport Harbor and Narragansett Bay, where guests can enjoy upscale dining, spa treatments, sailing tours, outdoor event spaces, a private marina, cabana experiences, and numerous other resort-style amenities. With group and individual travelers increasingly seeking a unique resort experience with open-air amenities, Gurney’s Newport is well-positioned to continue to grow in the highly attractive Newport market.”
Newport is built on a history of travel and tourism. Newport has a combination of qualities that attract millions each year and is just a 1.5-hour drive from Boston and a 3.5-hour drive from New York City. This leisure destination has historical sites, the Cliff Walk, the Newport Mansions, Ocean Drive, shopping and waterside dining, the International Tennis Hall of Fame, yachting, sailing, fishing, golfing, beaches, events such as the Newport Folk Festival, and many wedding venues. Newport remains a high barrier-to-entry market with limited potential for new supply. Gurney’s location is surrounded by water in Newport Harbor.
The company is evaluating operating and physical enhancements to the guest experience to drive increased cash flow. Pebblebrook believes the overall opportunity is to reposition the property, given its location and amenities. Potential improvements include fully renovating the guestrooms and guest bathrooms; upgrading the lobby, arrival experience, and landscaping; refurbishing the restaurants and bars; adding a market; relocating/upgrading the spa; reimagining the Grand Ballroom, South Lawn, and outdoor pavilion spaces; and adding new guest activities and amenities. In addition, the company has the right to purchase the marina (which includes 22 slips accommodating boats up to 240 feet) in 2027. The resort will also become part of Curator Hotel & Resort Collection, which is expected to generate expense reductions combined with technology and operating initiatives.
Based on the estimated May 2022 trailing-twelve-month performance, the hotel generated total revenue per available room of $401, hotel earnings before interest, taxes, depreciation, and amortization of $13.6 million, and hotel net operating income, after a 4 percent capital reserve, of $12.1 million.
The acquisition of Gurney’s Newport brings the total number of properties in the company’s portfolio to 55, including 13 drive-to independent lifestyle resorts. Pebblebrook funded the acquisition with cash on hand and proceeds from its senior unsecured revolving credit facility.