Visitors to Toronto hotels will be movin' on up in the next few years, as the city anticipates completion of a handful of new combined luxury hotel and condominiums downtown.

The Ritz-Carlton, Trump and Hazelton hotels are among a new wave of luxury accommodations seeking to address both the tourism and high-end real estate markets in the city.

The hotels, all currently under construction, are part of a miniboom in tourism and cultural development that includes the new Four Seasons Centre for Canadian Opera, and massive renovations at the Royal Ontario Museum and Art Gallery of Ontario.

Hotel development in Toronto has been slow in recent decades, but with major international players including Trump and Ritz-Carlton throwing their hats into the five-star ring, competition is warming up to attract both well-heeled travellers and millionaire empty-nesters.

Illustration courtesy of Ritz-Carlton
The Ritz-Carlton hotel on Toronto's Wellington Street is one of a number of planned properties by international players.

The Ritz-Carlton, which broke ground last month on Wellington Street, is a joint venture between Ritz-Carlton, which is owned by Mariott International, and partners Cadillac Fairview and Greywood Developments.

The property plans to offer 267 hotel rooms and 153 condos, with shared amenities between them. Ritz-Carlton expects occupancy by 2009.

"It's a very, very interesting formula from both a hotel perspective as well as a residential perspective," said Michael Beckley, vice-president of development for Mariott International.

"We've done them in New York, Boston, Dallas, quite a few resorts, and I think we have another 26 in what we call our 'mixed-use development' pipeline," said Beckley.

Condo owners at a Ritz-Carlton property are able to enjoy traditional hotel services, such as maid and concierge availability, as well as more luxurious perks like having your wine fridge stocked while you're away.

Beckley anticipates the hotel will attract a cross-section of business people, athletes and film stars.

The Trump International Hotel and Tower, scheduled to open in 2010 at Bay and Adelaide, plans a similar mixed real estate/hospitality model, though geared more specifically to the business traveller, and billing itself as "intimate" and, more vaguely, "Manhattan-style."

"We don't have ballrooms for weddings and things like that, we're very focused on the business side, as well as the service and amenities that are more personal versus a mass audience," said Barry Landsberg, director of marketing for the Trump project.

The Trump property will offer a mixture of condos and hotel rooms, like the Four Seasons, as well as the option to purchase a hotel suite for one's personal use when in Toronto, but which the hotel will put into the regular pool of available hotel rooms when the owner isn't occupying it.

"You may come to Toronto for a week or two or a month and want a place to stay that's your own, and when you're not using it, have it rented out and have revenue from it," said Landsberg.

Unlike a traditional real estate investment such as owning a condo unit (which is still an option in the Trump building), owners of a business hotel suite will be able to claim business expenses as well as generate revenue from the suite's use as a hotel room.

Landsberg feels that the Trump building - which has not yet finalized its financing - would have its own niche in Toronto alongside the new Ritz-Carlton and established players such as the Four Seasons and Le Royal Meridien King Edward.

"I think there's always a unique clientele for any luxury hotel," said Landsberg.

"Trump has operated their hotels in the international line in the boutique style, no matter how big they are. If you talk to the owner of a suite, they talk to the general manager of the hotel regularly even if they don't stay there that often."

Though an established brand such as Ritz-Carlton is a latecomer to Toronto's downtown, the company sees its new location as ideal to serve patrons of the theatre, symphony, stadiums and the new Toronto International Film Festival headquarters building, also not yet built.

The building will also include direct connections to the new Royal Bank of Canada Centre, as well as the downtown PATH system.

The Trump organization, which is situating its property near the same intersection Ritz-Carlton originally considered, believes it is capitalizing on a well-timed position in the Toronto real estate marketplace.

"The marketplace is hot in that the cost of real estate in downtown Toronto is still undervalued," said Landsberg, whose company saw an opportunity to deliver a product to high-end clientele who may not yet have a range of options in the city.

"The main focus in terms of the site itself is that the market was underserved in terms of a five-star hotel."

Among Toronto's hospitality and tourism professionals, hopes are high that the new properties will boost tourism by becoming destinations in and of themselves.

"People are looking for top luxury properties to stay at," said Andrew Weir, vice-president of communications for Tourism Toronto.

"We have a number of outstanding properties already in Toronto, so as we add new ones that just increases the attractiveness."

Though the city is still suffering a small amount from tourism drop-off due to SARS - conventions that were planned during the outbreak in 2003 were less likely to have booked in Toronto - Weir says concerns like that are no longer at the forefront.

"There are other challenges on visitors' minds, the currencies, the new passport rules.

On the convention side, the removal of the GST rebate is a consideration."

And though tourism can be an unsteady market, the diversification into real estate will ideally provide a steady backbone for developers - so long as there are enough wealthy people to fill the units.

"There are many buildings in the Toronto marketplace that have a couple of penthouse suites, but you'll have 200-300 other suites that are in the $200,000-$500,000 range and that's not necessarily the lifestyle that people are looking for," said Landsberg.

"Whether Ritz and the Four Seasons are still building as well, it (the high-end real estate and hospitality market) is still a very underserviced market."

(Liz Clayton can be reached at clayton@businessedge.ca)