Editors’ Note

A graduate of the University of Kentucky, Paul Leone worked with hospitality accounts, including The Breakers, at Coopers & Lybrand before joining the hospitality industry full time in 1984, as Controller of The Breakers. He subsequently served as the property’s Vice President and Chief Financial Officer before being named to his current positions in 1994. He was appointed President of Flagler System Management in 1992.

Property Brief

Set amid 140 acres of oceanfront property on the island of Palm Beach, Florida, The Breakers is a privately held AAA Five-Diamond Award-winning resort destination. Originally founded in 1896 by magnate Henry M. Flagler, it was rebuilt in 1926, after two fires destroyed the original building. The multifaceted, Italian Renaissance-style property features 540 deluxe guest rooms including 68 suites, two 18-hole championship golf courses, a 20,000-square-foot luxury spa, a Mediterranean style beach club with 30 premium beach bungalows and cabanas for day use, two fitness centers, five swimming pools, 10 tennis courts, a family entertainment center, nine outstanding restaurants, and an array of onsite boutiques, all owned and managed by The Breakers.

The travel industry has been heavily impacted by the financial crisis. How much of an impact have you seen at the property on your meetings and leisure business?

This is a very turbulent time right now for the travel sector, which finally started to mobilize only a couple of months ago. However, our industry is finally giving voice to how the financial crisis is impacting tourism. At The Breakers, we have seen these effects caused as much by psychological apprehension from the AIG-effect, as they are driven by the realities associated with a worsening economy. Fortunately, out of the challenges wrought by the current marketplace, our resilient organization has derived many opportunities.

While our group business has been impacted by some cancellations, the majority of those companies are postponing their programs, with considerable interest in rebooking in 2010. Overall, most corporations are changing the dynamics of their meetings, such as scaling back on the time frame with shorter trips, reducing the number of attendees, or reevaluating the offerings of the conference.

Regarding the leisure market, we are very fortunate that this segment has been extremely resilient. Consumer confidence has affected spending on higher-end expenditures, and reservations are being made with shorter lead times. So while we are not immune to the effects of the economy, we are fortunate to be experiencing a “flight to quality,” as affluent consumers who were motivated by heavy discounts and promotional freebies elsewhere seek out The Breakers to restore the value and rewards they crave in a destination.

There seem to constantly be changes and new additions being made at The Breakers. Would you highlight some of the projects that have recently taken place at the property and what may be in the works?

Our key goals remain steadfast, even as we work through the economic crisis. Even after investing over $250 million in the revitalization and expansion of The Breakers over the past 15 years, we are committed to sustaining our annual investment of $25 million in capital improvements. Our four-year room renovation project is more than halfway complete, and we are on pace to finish the complete redesign of our guest accommodations in 2010. Just over the past six months, we have launched several new ventures: the newly transformed Phillips Point Club by The Breakers, a penthouse-style city club located just across the Intracoastal Waterway; The Breakers Palm Beach Realty, specializing in luxury real estate brokerage services; and our newest retail store called MIX, a specialty boutique featuring fashion jewelry and accessories, which represents our eleventh concept among The Shops at The Breakers, which we own and manage.

Would you provide an overview of the restaurant offerings at The Breakers?

The Breakers has created an inviting array of nine unique restaurant concepts, including two that are off-site – Echo in Palm Beach, and our newest venture, Top of the Point, located just across the Intracoastal Waterway in West Palm Beach. In the spirit of a true destination resort, these distinctive dining options successfully entice hotel guests to enjoy a multitude of culinary experiences, so they never have to venture outside our properties. Concepts include modern French fine dining, traditional French in a more casual brasserie style, a steakhouse, Italian, seafood, oceanside dining, and Asian fare. You can also enjoy upscale comfort food at Top of the Point. This penthouse-style restaurant and bar features fabulous food, highly attentive service, and spectacular views of the Palm Beaches, the Atlantic Ocean, and the Intracoastal, with The Breakers clearly visible on the horizon.

The Breakers is known to have top quality spa and fitness facilities. Would you provide an overview of these facilities?

The Spa at The Breakers is a focal point of our operations. This past winter, we completed a full refurbishment of the spa facility, and in doing so, we enriched the atmosphere with an elegant color and design scheme that reflects our prized oceanfront location. We also created new specialized venues, such as our Oceanfront Sanctuary, a stunning, open-air private enclave for having a massage in complete tranquility amidst ocean breezes and a panoramic view of the Atlantic Ocean. New spa experiences have been developed that capture the romance of our subtropical location, such as the Moonlight Massage. We continue to evolve our spa menu with new signature services, such as our tremendously popular customized massage known as the Personal Retreat, delivered by a master therapist, and the introduction of the Tammy Fender Holistic Facial at our spa, which uses formulations with 100 percent pure, organic ingredients.

As you look at 2009, what are the key priorities that you are focused on?

We are privileged to have an extraordinarily dedicated and visionary ownership. They have imparted to us the wisdom to hedge for the long haul, and to build in economic fortitude that withstands peaks and valley. With minimal debt, The Breakers completely contrasts with most luxury hotels that are over-leveraged, facing lower occupancies, and have a harder time maintaining service levels through this downturn.

Our key priorities always reflect our mission to remain on a path of continuous enhancement. We are committed to improving productivity, to nourishing our priceless corporate culture that yields excellent service, to protecting our brand image and to preserving the quality of our property.