Building The Upper Echelon Of Hospitality

Cyrus Vazifdar is a Managing Director and Partner at Canyon Global Partners, the ultra-luxury resort investor and developer behind some of the most iconic properties, including the revered Amangiri hotel in Utah.

They’re currently developing the first Six Senses in the US, also in Utah, and recently launched a dedicated GP fund focused exclusively on ultra-luxury hospitality and residences investments.

We spoke with Vazifdar to find out more on what makes their approach, and their properties, so unique. 

“We look for extremely unique and special sites. We're not deterred by parts of the world that are not established resort destinations. Quite the contrary, we prefer regions that are under the radar where we can deliver something completely different and create a destination.”

Amangiri is one of these, and is central to the group’s origin. Vazifdar says it began with the goal of building a completely unique ultra-luxury project in the high desert of Southern Utah, but it wasn’t that simple. 

“The preferred land for the project was protected federal land. Canyon executed a land swap with the federal government, trading a larger acreage of unprotected land for the site that Amangiri sits on today, which required congressional approval and President George W. Bush's signature. This was the first time in US history a public-private land swap was executed for the development of a private resort project.“

When it comes to ultra-luxury destinations, a surprising point he makes early in our conversation is how the US market is less advanced than many would expect. 

“Ultra-luxury hospitality really started in Asia, and most of the world's premier ultra-luxury brands were created in the region,” says Vazifdar. “The scale of ultra-luxury product is far more significant in Asia and Europe as evidenced both by the number of properties and keys, and the velocity of transactions in the ultra-luxury space.” 

“Conversely, the United States is in its infancy with respect to the expansion of ultra-luxury product, with far fewer existing assets. It creates an incredible opportunity given the overwhelming concentration of UHNWIs in the US and lack of product to accommodate those guests.”

In addition to Amangiri, other hotels Canyon owns (or has owned) include Amangani in Jackson Hole, Aman Le Melezin in Courchevel, France, Camp Sarika, the tented camp resort extension of Amangiri, and the Four Seasons in Santa Fe. 

The company also has several pieces of high-profile development land around the world for future development.

They’re currently developing the Six Senses Camp Korongo in Southern Utah, the first resort for the brand in the US and also the first autonomous ultra-luxury tented camp in the country.

“The ultra-luxury tented camp concept is a long-established and successful hospitality offering in Africa, and part of Asia. Groups like Singita and Aman have created spectacular experiential tented products that drive enormous average daily rate.”

“We first built Camp Sarika, a tented extension of Amangiri, in 2020, and saw an unbelievable premium over Amangiri's existing product. That was proof of concept to create a standalone ultra-luxury tented camp.” 

When it comes to the most challenging part of ultra-luxury hospitality development, Vazifdar says it is essentially ‘everything’. 

“These projects are not widgets. The location and physical property have to be truly unique and differentiated. That typically means we're building in remote destinations, designing concepts that haven't been created before, and positioning the project to be in its own stratosphere from a competitive standpoint.” 

He notes that few contractors and architects have experience in this execution, and typically the build is challenging given infrastructure requirements and labor. 

They are also constantly looking at ways to improve based on the needs of demanding guests. 

“Today, that typically means programming to accommodate multi-generational travel, delivering projects that align with guest values, with a significant focus on environmental sensitivities, focusing heavily on the amenity and adventure offerings which is dependent on each specific location, and identifying and executing on wellness and wellbeing trends which have evolved far beyond the typical resort spa offering.”

Vazifdar says Canyon’s approach is shaped by being owners first, developers second. 

“We're experienced in building in places that are hard to build, taking assets that lose money and making them extremely profitable, and perhaps most importantly, we're not deterred by the high price of entry to buy and build these projects.” 

“We're also vertically integrated, and can execute the entire lifecycle of a project, from raw land through stabilized operations. Unlike many sponsors, we're often willing to hold assets indefinitely.” 

He says this puts them in a different category to traditional resort investors. 

“Scarcity is key, and we want less, and better room product so we can drive ADR (Average Daily Rate). We will almost always align with ultra-luxury brands like Aman, Six Senses, Cheval Blanc...” 

“We typically establish high watermarks in cost per room and always expect to establish the new high watermark in ADR, Revenue Per Available Room and price per foot of residential sales.”

Projects vary in timelines but from the starting point of an untouched piece of land can take anywhere from three to five years. 

“The beauty of ultra-luxury hospitality is that sometimes it never truly stabilizes, meaning its long-term growth CAGR outstrips the 3.0% inflationary benchmark most of the industry uses as a proxy for stabilization.”

Canyon has worked with many family offices as capital partners, some heavily hospitality-focused to those that have had no previous direct involvement.

“The key for Canyon is aligning with groups who have a similar passion for ultra-luxury hospitality, and patient capital. We're very big believers in long-term holds. We do not structure our investments in the typical 3-5 year buy-fix-flip PE model, and invest alongside LPs who view this as a 10-year plus cash flow and value appreciation strategy.“

Such alignment is essential when developing some of the most ambitious and creative hospitality projects, and it’s delivering on the unique vision of these that Vazifdar enjoys most.

“These developments can take five years when considering the entitlement process. Seeing the end result and knowing it was executed the way we wanted is the reward. These projects are art with cash flow and knowing that we created a successful financial investment while delivering something new and different is what we pride ourselves on.

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Let us know if you’re a family office keen to find out more on the new Canyon Global Partners fund.