CATEGORY EXPANSION
The fastest growing hotel chain isn’t who you think it is
How a song inspired one of the fastest growing hotel chains
Imagine you come into a piece of land that will be developed into a hotel. Which brand would you want to partner with to get the best financial return on your development? Marriott? Hilton? Aman?
If you answered Margaritaville, you’d have to get in line. The brand of hotels and resorts has been on a tear, expanding across the US and Caribbean while delivering some of the strongest operating metrics in the industry.
And it’s not just hotels.
Since the first Margaritaville store opened in 1985, Jimmy Buffett and business partner John Cohlan have done what many lifestyle brands dream of: successfully expand their brand into new categories. Buffett and Cohlan have extended Margaritaville into airport restaurants, pickleball courts, casinos, a Sirius XM station, lines of daiquiri makers, hammocks, beer, clothing, tequila, plus RV parks, cruises and retirement communities.
The brand then cross-sells products to its customer base. Take restaurants, for example. A typical hotel earns 25–30% of its revenue from food and beverage. At Margaritaville’s Hollywood resort, it’s 50%. It makes sense. At a…
