Australia-based boutique ultra-luxury hotel platform Baillie Lodges in August acquired a majority share in Chile’s Tierra Hotels, which operates experiential luxury lodges in three Chilean wilderness destinations, including Tierra Patagonia, Tierra Atacama in the northern desert of Chile, and Tierra Chiloé on the coastline of Chiloé Island.
Baillie Lodges, now with 10 assets across its portfolio and in 2019 acquired by KSL Capital Partners, intends to meaningfully invest in the Tierra properties. It also wants to expand the Tierra hotel platform through acquisitions and new greenfield developments, joining other global properties in the Baillie portfolio, including the Clayoquot Wilderness Lodge on Canada’s Vancouver Island and New Zealand’s Huka Lodge.
The Purcell family, led by Tierra Hotels founder Miguel Purcell, will retain an ownership stake in the portfolio, and the three properties will keep the Tierra Hotels branding.
HOTELS spoke to Purcell and Baillie Lodges Executive Chairman Michael Moret-Lalli in September to learn more about their plans.
HOTELS: Why did Baillie Lodges acquire Tierra Hotels?
Michael Moret-Lalli: This partnership is a natural fit for both companies and teams, with both brands sharing a vision for delivering exceptional, immersive experiences.
The Baillie Lodges and Tierra collections both provide access to incredible natural attractions in extraordinary locations, paired with culturally rich experiences and intimate lodges that cater to a small number of guests and place architectural and interior design at the forefront. The properties share a commitment to the sustainability of the natural environment and surrounding communities in which they operate, offering guests an authentic encounter with nature.
H: How did the deal come together? Relationship between owners?
MML: The new partnership follows a long history of mutual respect and collaboration between the Baillie Lodges team and Tierra Hotels founder Miguel Purcell.
H: Can you share the terms of the deal?
MML: The terms of the deal are confidential and were not disclosed.
H: Can you elaborate on the expansion plans for the Tierra brand?
Miguel Purcell: Baillie Lodges intends to meaningfully invest in the Tierra properties to ensure they maintain their unique market position as pre-eminent boutique hotels in Chile, with initial planning already underway for a substantial refurbishment of Tierra Atacama in 2024.
In addition, Baillie Lodges plans to thoughtfully expand the Tierra hotel platform in South America in the years to come, through acquisitions and new greenfield developments.
H: Will Tierra Hotels continue to manage assets for Baillie?
MML: The Purcell family, who launched and developed Tierra Hotels, will continue to retain an ownership stake in the Tierra portfolio and Tierra founder Miguel Purcell will continue to be involved in the role of founder and creative director. A newly appointed general manager, Pablo Lundahl, will lead the Tierra management teams in their Santiago office and across the three lodges. Pablo and the Chile-based team will be guided and supported by the Baillie Lodges management team who is based in Australia.
H: Can you elaborate on investment plans for current Tierra assets?
MP: The first priority is to progress plans for a substantial refurbishment of Tierra Atacama, with the intention to complete this project in 2024. Baillie Lodges also intends to invest in continual improvements in the product and guest experience at Tierra Patagonia and Tierra Chiloé, as well as investment in the Tierra operating platforms and systems.
H: How has the Tierra Hotels portfolio performed in the past year, and what is the forecast for 2023?
MP: The Tierra portfolio has performed above expectation in the past 12 months, and with Chile now completely open to international visitors and the summer season opening for Tierra Patagonia and Tierra Chiloe scheduled for October 1, 2022, there is very robust demand and a very optimistic outlook for the next year.
H: What are the further growth plans for Baillie Lodges?
MML: Bailie Lodges will continue to explore opportunities for meaningful growth in its portfolio of luxury lodges in locations that are complementary to the existing portfolio (Australia, New Zealand and Canada). However, at this stage, the business is firmly focused on the integration of the Tierra portfolio into Baillie Lodges and the rebuild and relaunch of the iconic Southern Ocean Lodge on Australia’s Kangaroo Island (it was destroyed in the 2020 bushfires), with the reopening scheduled for October 2023.
H: What is the biggest challenge surrounding the success of this deal?
MP: Both the Baillie Lodges and Tierra teams are strongly aligned on the strategy for the business and don’t foresee significant challenges at this time.
H: What is the biggest opportunity as a result of the deal?
MML: We believe there is great power in this combined platform – not only in a shared guest base but also in the integration of best practices to establish a truly exceptional, global luxury lodge platform.
In the near term, the Tierra team will commence working towards a number of key initiatives, including aligning some components of the Tierra product offering with the Baillie Lodges guest experience, implementing new systems in areas such as finance and reservations, and planning for revenue growth opportunities.