case study

Walt Disney World Swan Reserve

More Magic at Disney

The Swan & Dolphin Resort (“SD”) complex has had a special place in our portfolio since its inception in the late 1980’s. As a best-in-class resort in one of the largest tourism markets in the world, the complex sits on irreplaceable real estate. Its scale and operational intensity demand an all-hands approach to asset management, but also provides us with an unparalleled level of market expertise and execution capability. When the idea of expanding the complex was raised, Tishman tapped all parts of the organization to create a world class asset.

We began by studying the feasibility of the proposed site, which was situated on an underutilized portion of the property occupied by tennis courts. Surrounded by two retention ponds and a minigolf course, the site was tight with little room for flexibility. Efficient programming would be crucial, so we explored design iterations to maximize the square footage. Spacious rooms, meeting and banquet facilities, and amenities needed to all fit. For example, we decided to stack the pool on the third-floor mezzanine above our two ballrooms and designed the rooftop for additional meeting and event space. We were able to integrate a V-shape, or knuckle joint, orientation that wraps around the elevated pool deck to accommodate the 350-key expansion.

Next, we analyzed customer segment data and realized we could capture incremental demand. Specifically, we targeted premium group businesses that wanted to host small 4-12 person meetings.  This “Small Meetings'' segment was rapidly growing in other markets, but not yet widespread in Orlando due to the lack of suitable supply. Recognizing this opportunity, we tailor-made the floorplans and guest room layouts to capture this segment. We split suites into two bays to create comfortable space for meeting attendees and a high level of privacy for guests.  For the bathrooms, we realized a single shared facility failed to provide guests sufficient privacy and ate up valuable square footage, so we designed a single, adaptable bathroom accessible from both the living area and bedroom. A sliding door separates the toilet and shower fixtures, allowing guests to convert the full bath into a half bath for visitor use, while leaving shower and toiletries out of sight.

As we developed conviction in the segment and feasibility, we wanted to drive as much value as possible through operational efficiencies. In one regard, complexing the Swan Reserve with our existing infrastructure, staff, and management teams helped drive margins at the new tower. By identifying non-revenue generating areas that could be housed at the Swan & Dolphin, we could devote more built space to revenue producing food, beverage, and meeting areas thereby driving operating leverage.

Finally, by running lower financial leverage on the Swan & Dolphin complex, we were able to tap the capital markets in an extremely efficient manner. Our financing team knew where debt would be priced, what the market was looking for and how a unique asset like the SD complex would garner much interest. Given the asset’s operating strength through multiple cycles, we were able to finance nearly the entire $200+ mm project cost without impairing the capital structure.

When the pandemic hit, construction was just ramping up.  With our in-house development and asset management teams, we were able to keep the construction site open with continuous general contractor and subcontractor engagement. We closely tracked supply chains and manufacturer financials, allowing us to secure long-lead time items and avoid third-party bankruptcy issues. In the end, all of our extra efforts paid off.  In November 2021, the Swan Reserve was officially completed and turned over to Marriott under the Autograph brand, coming in under budget and ahead of key contractual deadlines - a minor miracle under the most stressful of times.

Designed by the world-renowned architecture firm GENSLER, the hotel’s all glass façade and color scheme provide a modern take on the Florida resort, while also paying homage to the original Michael Graves designed Swan & Dolphin. Since its opening, the Swan Reserve has already achieved a significant rate premium to the overall resort, which itself is exceeding pre-pandemic performance.