Irvine Co. becomes operator of Orange County luxury hotels.

Orange County's biggest landlord is making the transition from developer to hotel operator.

By month's end, the Irvine Co. plans to take over management of Four Seasons Hotel Newport Beach, one of only two five-diamond, four-star hotels in Orange County, as well as the 204-room Resort at Pelican Hill, a luxury golf hotel slated to open in 2007. It's part of an ongoing strategy by the Newport Beach-based company to run its hotels, golf courses, restaurants and a marina.

The company joins an increasingly crowded field for luxury hotels along Orange County's coast, which includes the Montage Resort & Spa in Laguna Beach, Ritz-Carlton Laguna Niguel and St. Regis Monarch Beach Resort & Spa in Dana Point, the county's other five-diamond, four-star hotel.

The move has its risks. The Four Seasons is set to be renamed The Island--a play on the Irvine Co.'s flagship Fashion Island mall.

However catchy, The Island won't have the name recognition of the Four Seasons, which is synonymous with luxury hotels. "On a global scale, they'll probably lose out on the brand-name clientele (the Four Seasons) attracts," said Alan Reay, president of Costa Mesa-based Atlas Hospitality, a hotel industry consultant.

Reay said that the name change could impact some business travelers and meeting planners who make up the core of the Four Seasons Hotel Newport Beach's business.

"Our risk is mitigated by experience in taking (business) in-house," said Terry Petty, the Irvine Co.'s resort division president. "We've been bringing in people from all over who have done this many times."

Along with Petty, who hails from Marriott International Inc., the Irvine Co. in recent years has hired Eric Prevette, executive vice president of resort properties, and Hans Maissen, general manager of golf properties. Maissen is set to manage The Island. Maissen had been managing director of the Windsor Court Hotel in New Orleans.

"Knowing what Hans brought to Windsor Court, we believe he can bring the same to The Island," said Shane O'Flaherty, vice president of quality assurance for Lincolnwood, Ill.-based Mobil Travel Guide, which developed the star rating for hotels and resorts.

Others are going it alone as well. For San Diego-based JC Resorts, which has operated the Surf & Sand in Laguna Beach since the 1960s, independent is the only way to go, according to President Paul Reed. Besides name recognition, there's little gain for a resort to be affiliated with a chain because of the fees that come with franchising pacts. "Being independent is the most cost-efficient," Reed said. "And higher profit equals less risk when times are bad."

'Unique services'

Reed, whose company also operates Rancho Bernardo Inn, Temecula Creek Inn and Scripps Inn in San Diego, said there is little downside to running hotels under different names, which the Irvine Co. will do with The Island, the Resort at Pelican Hill and its other hotel, the Hyatt Regency Irvine. "We try to brand each property individually rather than brand the company," he said.

The Island is expected to stay focused on business and meetings. The Resort at Pelican Hill is being built as a golf resort that's family-friendly and easy to get to. "Resorts like this are set apart by service." Petty said. "How you deliver is what makes people come back."

With competition and high prices along Orange County's coast, service has to be more than just good, said Robert Watson, a development partner in the new Tower 23 in San Diego and a former Starwood Hotels & Resorts Worldwide Inc. executive who helped launch the W brand.

"When you're playing at the high end, it comes down to unique services," he said.

Another challenge will be building business with locals, according to Don Wise, chief executive of Napa-based Resorts Marinas and Vineyards Inc. "There's an opportunity for them to do what the Ritz-Carlton and Montage did to create an environment for locals," he said. "A country club environment for those who may not have Big Canyon memberships."

One issue out of the gate: The Island's current four-star rating will be suspended for six months, O'Flaherty said. That's a standard Mobil Travel Guide move when a rated hotel changes hands. After that, it will be re-rated. "From our perspective, they have a chance of achieving that rating again," O'Flaherty said.