Feb. 9, 2003 - ASPEN, Colo.--The luxury St. Regis hotel in Aspen is launching a $30 million renovation as it dives into Glitter Gulch's bustling fractional ownership market. 

The move marks the first push into luxury fractional ownership for St. Regis parent Starwood Hotels & Resorts, which has 50 super high-end hotels within the collection of 743 hotels it owns or manages worldwide. 

"Starwood has had the advantage of sitting back and seeing how other markets have developed and, with the St. Regis being the finest hotel in the state, we think fractional ownership is a natural fit in Aspen," said Dave Matcheson, head of investor relations for Starwood. 

As Starwood considered converting a portion of its 257-room St. Regis to fractional ownership, the luxury interval ownership market in Aspen has flourished. At least nine projects are underway, selling anything from one-quarter to one-11th shares of a single unit in a private club. Most of those projects are luxurious private clubs, offering a portion of $3 million and $4 million condominiums with all the trimmings of a five-star hotel. 

The concept is sweeping Aspen, where available land for new homes is almost gone and existing homes and condos sell for several million dollars. 

St. Regis, in a bid to capture part of the blossoming market, is converting 98 of its guest rooms into 25 two- and three-bedroom suites. A good chunk of the $30 million price tag for the renovation includes a new 15,000-square-foot spa. 

The renovation will keep the St. Regis within its existing site across the street from the slopeside pit that will soon house the new 51-room Hyatt time-share project. The St. Regis plan will not change the three-building façade of the hotel, which abuts Aspen Mountain. 

"The great advantage of us doing this within the existing footprint is that the fractional owners will have access to all the hotel services, but the main component of the hotel will remain the same," said Richard McLennan, general manager of the St. Regis, which was a Ritz Carlton Hotel from 1992-97 before Starwood took the reins. 

McLennan said the St. Regis plan is not necessarily designed to compete within the Aspen market as much as it is a play to maintain Aspen's tenure atop the luxury resort market. 

"It's more about positioning ourselves and becoming more competitive with resorts such as Vail, Beaver Creek, Bachelor Gulch and Jackson Hole," he said. 

The St. Regis plan, under consideration by Aspen planning officials, anticipates construction beginning late this year with completion by summer 2004. The hotel is also asking to add 20 more already permitted guest rooms. 

The plan, on first blush, fits with the city of Aspen's strict codes guiding the creation of fractional projects. 

The city's planners, in an effort to stem the development of gated luxury islands within town, require fractional projects to maintain a hotellike feel, including a front desk, lobby and ground-floor commercial opportunities for strolling visitors. 

The city is also fielding proposals by several of the older local lodges seeking to boost revenue and fill rooms midweek with fractional units. By including fractionals, lodges such as the Boomerang Lodge are hoping to jump-start midweek business and contribute to the town's occupancy levels with a steady rotation of vacationing owners. 

"This fractional thing is really taking off," said Joyce Ohlson, deputy director of Aspen's community development department. 

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