Why Celebrities Are Opening Hotels

He may be more famous for directing "The Godfather" film trilogy, but Francis Ford Coppola has another trio of esteemed creations to his name: three boutique hotels hidden in the Central American jungle. He found Blancaneaux Lodge in Belize while searching for the same kind of jungle paradise he fell in love with when filming "Apocalypse Now."

"The area was very remote, wild, with a beautiful river and waterfall, and I thought, 'I could write here'," says Coppola. For years, he used the rain-forest lodge as a creative retreat, as well as an escape for family and friends.

Then he opened it up to customers. He got so much praise—and made such a handy profit—that eventually he launched two more hotels: Turtle Inn, on a beach in Belize, and Guatemala's La Lancha, on a lake near the ancient Mayan ruins of Tikal. Both opened after extensive renovations; Turtle Inn needed to be entirely rebuilt after a major hurricane. "I didn't mind because it allowed me to create an entire theme for the property," says Coppola. "So much of what is offered in the hotel world is cookie-cutter—you could be in Morocco or Minnesota. My films all have themes, [as] do my hotels." The newest property will be a hotel in Buenos Aires, where Coppola is now working on a film project.

As the growing ranks of celebrity inn-keepers are learning, personality sells rooms a lot better than any plasma TV or Thai spa treatment ever could. At Turtle Inn, the Francis Ford Coppola Family Pavilion—which features pieces from his personal art and antiques collection—starts at $2,000 a night in peak season, triple the price of comparable villas. It's never been more popular. Other well-known personalities, including Giorgio Armani, Clint Eastwood, and Andre Agassi and Steffi Graf, have also lent their names to high-end hotel projects. Bill Gates recently bought a major stake in the luxury Four Seasons hotel chain. U2's Bono and the Edge saved Dublin's old Clarence Hotel from demolition in 1992, and in the process turned it and the whole neighborhood around. Indeed, in today's celebrity-obsessed culture, there seems to be no shortage of well-heeled travelers willing to pay a premium to stay at Robert Redford's place in Utah or the Versace palazzo in Australia.

For the high-profile owners, it's easy to see the appeal: hotels have become a richly profitable investment, as well as an exercise in vanity. According to Smith Travel Research, global hotel occupancy for 2006 hit 65 percent, which is considered good in the industry. PricewaterhouseCoopers says that in the United States, occupancy was the highest it's been since 1997, and that the lodging industry made an aggregate profit of $25.3 billion, up almost 12 percent from 2005. This year hotels and resorts stand to profit on average by more than $6,000 for each available room. "It's very hard today for a hotel project not to be successful and make money," says industry analyst Bjorn Hanson. "Hotels certainly benefit from the influence of a personality." Adam Weissenberg, another analyst, says celebrity hoteliers are an extension of the celebrity-owned-restaurant trend that peaked a few years ago.

Coppola's properties, says Jay Shoemaker, the CEO of Coppola Cos., are worth "well into eight figures." "Rather than stay in a hotel for a year while he works on a movie," Shoemaker says Coppola figures, "Why not buy a hotel?" When the movie's over, Coppola gives the hotel to his company, which also includes wine estates and cafés in northern California and a food company that produces pasta, sauces and vinaigrettes. Shoemaker says Coppola views himself as a "venture capitalist" for his little empire of holdings, making a range of investments. And no one should think Coppola is hands-off. Shoemaker says he gets 20 e-mails a day from the boss, "seven days a week."

Beyond mere profits, celebrities use hotels to raise their own profiles. Agassi says he and Graf bought 50 percent of a 301-room hotel condo in Idaho, the Fairmont Tamarack, partly to maintain their influence. "When we were playing professional tennis, Stefanie and I both had an impact on people during the couple of hours we were on the court," he says in an e-mail. "Being involved so closely with the Fairmont Tamarack is a way of relating to people in a much more substantive, long-term way." An executive with the development company in the Agassi-Graf deal says sales in the project will surpass $500 million.

The flamboyant British billionaire Richard Branson—an expert at branding himself—has hotels in South Africa, Morocco and the British Virgin Islands, with two new properties: a spa resort in New Jersey and a ski lodge in Switzerland. The guest book at his Caribbean hideaway, Necker Island, where rooms start at $22,500 a week, lists such names as Michael Douglas, Oprah Winfrey and Steven Spielberg. Now Branson plans to burnish his image by turning his newest acquisition, Moskito Island in the British Virgin Islands, into a carbon-neutral resort.

Big-name hoteliers have been around since the late James Goldsmith, a billionaire Brit turned environmentalist, bought more than 30,000 acres on a nature preserve in Mexico 20 years ago. There he created the Cuixmala retreat, a private hideaway for the rich and famous, and infused it with his eccentric taste, including a life-size bronze gorilla and rhinoceros at the entrance. Villas start at $1,500 a night; La Loma goes for $9,000 to $15,000.

Many hotel ventures have often grown out of environmental concerns. In 1986 Eastwood bought the property for his Mission Ranch in Carmel, Calif., to save it from being turned into condominiums. Redford's initial motivation for buying land in Utah in the 1960s was for preservation, but in 1981 he invited some young filmmakers to a retreat on the property, and the Sundance Institute was born. "He envisioned having a place with a balance of art and nature and a community that believed in that," says spokeswoman Lucy Ridolphi. In 1988, 66 cottages were built to house the artists-in-residence, and Ridolphi says it was a "natural progression" to open them up to the public.

A big name can make the difference between running full or empty. At the Clarence, owners Bono and the Edge are occasionally seen drinking at the Octagon Bar, which guests love. The two men were regulars at the original two-star hotel, and their attachment led them to buy it when it was threatened with demolition to make room for a bus depot. They spent a fortune restoring the hotel to its former glory, including the creation of a $3,515-per-night two-story penthouse suite, with an outdoor hot tub.

Personal passions sometimes drive the ventures. Chilean food-and-wine entrepreneur Pedro Ibáñez founded the Explora properties, which combine high-exertion activities like horseback riding and hiking with posh accommodations, because they suited his interests. "When I started Explora in Patagonia, with the idea of outdoor physical activity, everybody thought I had gone mad," he says. But the company did so well that Ibáñez opened a second hotel in the Atacama Desert and is now expanding into Peru and Easter Island.

But hotel ownership is not for dilettantes. Ibáñez says he's been amazed by how much of his time Explora eats up. "It keeps me busier than I thought, but the payback is more than I ever expected," he says. Agassi says he and Graf "have been involved in virtually every detail at Tamarack, from exterior designs to the fabrics used on the furniture."

Ultimately, the celebrity innkeepers are peddling their lifestyle, in the form of places they would want to—and often do—stay. "In the course of my film career, I have spent thousands of nights in hotels, so I know what I like and don't like," says Coppola, who visits his properties for as long as a month at a time. He says he wants his hotels to be places to "get away from all the stress of our modern, technology-heavy world ... and reconnect with what is important—family, nature, inner voice." It doesn't hurt that there may even be an occasional celebrity sighting.