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Driftwood Capital to Develop $400M Rocket Tourism Resort in Florida's Space Coast

Driftwood Capital to Develop $400M Rocket Tourism Resort in Florida's Space Coast
Traded Media
by Traded MediaShare

In the past, Brevard County, Florida, known as the Space Coast due to its significance in the space race during the Cold War, saw economic growth spurred by space exploration. Today, private rocket launches have taken center stage, driving demand in the local hotel market. Driftwood Capital, a hotelier, is investing over $400 million in a high-end resort, the Westin Resort & Spa Cocoa Beach, to cater to this demand.

Capitalizing on Rocket Launches

Rocket launches in the region consistently fill up hotels, but there's a lack of upscale accommodations for VIP guests. Driftwood Capital plans to break ground on the Westin Resort in mid-2024, envisioning it as one of the top resorts in the Southeastern U.S., with an average nightly room rate of $450, significantly higher than the current average rate of $171.

Space Industry Expansion

The space industry has evolved, with SpaceX, United Launch Alliance, Blue Origin, and others conducting launches from Cape Canaveral. This has led to a surge in launches, reaching 72 in 2023, with expectations of surpassing 100 launches annually. Driftwood Capital anticipates this number to grow to 300 launches per year, further driving demand for accommodations.

Strategic Investment

Driftwood Capital's extensive experience in the Space Coast hotel market, along with insights into demand and supply dynamics, guides its investment decisions. The company aims to fill the gap for luxury accommodations in Cocoa Beach, historically considered affordable, by introducing high-end lodging.

Navigating Development Challenges

Cocoa Beach Westin | Projects | Gensler

Securing approval for the Westin Resort wasn't easy due to limited oceanfront land and community resistance to development. Despite challenges, Driftwood's perseverance paid off, securing a $30 million grant from Brevard County and overcoming obstacles over seven years.

Expanding Portfolio

Driftwood's investment isn't limited to the Space Coast; the company is developing other hotels across the country, such as the Element by Westin in Melbourne, Florida, and projects in San Diego and Miami. Additionally, the company provides loans to hotel owners, filling gaps left by tightened lending from financial institutions.

Mitigating Risk

Hotels are considered high-risk properties by lenders, but Driftwood fills this gap by offering additional financing, albeit at a premium. Despite the higher cost, this strategy stabilizes the hospitality sector and ensures fewer hotels face financial distress due to stricter underwriting requirements.

Overall, Driftwood Capital's investment in the Space Coast reflects a broader strategy of capitalizing on emerging markets while mitigating risks, contributing to the region's economic growth and development.

Published: April 9, 2024

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