The Monte Palace Hotel on São Miguel Island opened in 1989.

Perched up 500 or so meters above sea level, the hotel offered panoramic views of Lagoa das Sete Cidades. It had 88 rooms, two restaurants, a bar/nightclub, and a total construction area of approximately 13,104 m². Notably, it was the first luxury five-star hotel in the Azores. And in 1990 it was even awarded "Hotel of the Year" in Portugal.

Then, the place closed — just 18 months after its opening.

Today, it looks like this:

Supposedly the hotel failed for a number reasons. It was hard to get to. It lacked on-site amenities. It didn't, for example, have a pool. And the unpredictable (and often foggy) weather of the Azores made it so that a lot of the time you couldn't even see the main attraction, which was the view. The sponsors may have also overshot the market at the time.

In 2017, the abandoned property was finally listed for sale at €1.5 million. Level Constellation ended up buying it for an undisclosed amount at the end of the year. They are a Lisbon-based developer founded by Chinese entrepreneurs. The plan was/is to reopen another 5-star hotel, but that hasn't happened yet. Though there's certainly no lack of visitors to the property today!

I don't know how you address the weather thing, but nowadays there are many other 5-star hotels on the archipelago. Regardless, my bet is that the existing structure will end up being demolished. I mean, it's been abandoned and unmaintained for about 35 years.

I was reminded of this duality the other day while listening to a Scott Galloway podcast where he talked about his love for expensive hotels, and how he travels to hotels, not to places. This is a bit abnormal. Traditionally, people stay at a hotel because there are things they want to see and/or do in the place where the hotel happens to be located. Meaning they choose the place first, and then figure out where they're going to stay after.

But there is also a statistically significant percentage of travellers who work in the opposite direction. Scott seems to be one of them. Now, his examples were all at the highest end of the spectrum, and that makes intuitive sense. If your M.O. is to travel to hotels, and you're kind of agnostic to place, then presumably the hotels are going to be super nice. But I don't think this market segment only exists at the very top. I don't stay at the same kind of hotels as Scott, but I still love hotels.

One example that I have talked about before is Tuba Club in the south of Marseille. Bianca and I stayed here a few summers ago. We read somewhere that it was about to open, we loved the vibe, and so we organized our travel itinerary just so we could stay there. We ended up loving Marseille (so much so that we went back), but Tuba came first. It was the catalyst.

A local example I can give is the Drake Devonshire in Prince Edward County, Ontario. When it opened in 2014, "The County" was not on my radar. Maybe I had been there as a kid? I don't know. But as soon as it opened, I wanted to go, as did many others judging by the lack of room availability. The design by John Tong was a hospitality offering that just wasn't available in the rest of southern Ontario at the time.

This is a powerful position to be in for a hotel. Because it means that through some magical combination of design, brand, service, and experience, you have a product that people specifically want. They're not just stopping by and need a place to stay, they're actively seeking you out. This is not to say that location doesn't matter; it does. But it is to say that a highly-coveted offering that people love is always better to have than not.

And if you get it right, there's the opportunity that people will even choose you over place.

Update: A previous version of this post incorrectly stated that John Tong had passed away. John unfortunately had a severe stroke, but he did not pass away. Sorry, my mistake, John!

Cover photo by Toni Osmundson on Unsplash

Hotels are an important city-building tool. Let me give you an example. Each year, Conde Nast Traveler publishes a list of the best places to visit right now. Here's the 2025 list. If you scroll through it, one of the 25 places you'll find is Marseille. And if you look at the first picture, you'll find a hotel/restaurant called Tuba Club.

Long-time readers of this blog will know that I'm a big fan of Marseille and that, back in 2021, Neat B and I stayed at this hotel. In fact, the whole reason we even decided to stop in the city for the first time was so that we could check out this exact place. It opened the summer before and I had seen it written up somewhere.

I can also tell you that if you flip through Monocle's new handbook about France and go to the hotel section, you will likewise find Tuba Club. The place is seemingly everywhere and now has a loyal following.

But here's the important thing: it only has 5 rooms! And the room we stayed in was best accessed via a window and a large rock outcropping beside it. There's no way this place would meet code anywhere in Canada. But boy was it cool. And because we loved the experience so much, we decided to go back to Marseille the following summer and check out more of the city. It didn't disappoint.

Now I tell people and write blog posts about how much I love Marseille. And it all started with 5 non-code-compliant rooms perched on a bunch of rocks in a sleepy fishing port on the south end of the city. A great hotel can help you build your city.