Ian Schrager
Customers are more sophisticated. They respond to individuality and creativity
DRESSED TOP TO TOE in black Prada, Ian Schrager looks as much out of place as it’s possible to look in the lobby of the Marriott hotel in London’s Park Lane. It’s fair to say that this is not his kind of place at all. The walls are magnolia. There’s no bar. No intimidating staff. No go-to restaurant so full of locals that hotel guests can’t get in. It’s the last place you’d expect to see the ultra-stylish New York hotelier, who single-handedly created the design hotel. Yet here, amid the chino-clad middle managers furiously tiptapping their Blackberries is, he insists, where he wants to be.
Schrager is not mellowing with age now that he is the wrong side of 60 and his hearing is
beginning to show the effect of too many nights spent in New York’s legendary Studio 54 club. Nor is he losing the appetite for the hotel business. Quite the reverse. He’s going back into hotels and taking the biggest risk of his career since he opened his first boutique hotel in New York two decades ago. He has signed a £2bn joint venture with the world’s biggest hotel chain, Marriott, to create a fashionable but affordable hotel chain. “The time is right to move on to do something that appeals to a much larger audience on a much larger scale,” he declares.
Schrager is calling time on the design hotel. His intimidatingly hip hotels – Royalton, Paramount, Morgans, Hudson, Delano and Mondrian in the US and St Martin’s Lane and Sanderson in London – revolutionised the urban hotel market and spawned dozens of copies worldwide. But now the design hotel has become a victim of its own success, he says, and customers want something different. “It’s time to go away from design because it’s over the top now,” he says in his trademark New York rasp. “Hotels are playing design one-upmanship. It’s too much. People are tired of it. The time is right to go in completely the opposite direction: to create the first stylish global lifestyle hotel chain.”
Schrager and his new partner, JW ‘Bill’ Marriott Jr, chairman and chief executive of Marriott hotels, will soon announce the first 15 sites for their joint venture, called Edition. There will be one each in London, Paris, Madrid, Barcelona, Milan, Rome, Naples, Mumbai and Mexico, with the rest spread across major US cities, starting in Los Angeles, New York and Miami. Other British hotels will follow in Manchester and Edinburgh. Overall, 100 are planned and, by 2012, there could be as many as 200, with a combined value of £2bn.
Schrager will design the hotels, with leading architects, designers and artists. Private developers will build and own the buildings. Marriott will run everything, except the marketing and the restaurants, bars and room service, which Schrager will take care of. Schrager and Marriott will receive a share of the profits.
Schrager and Marriott are an odd couple. It is hard to imagine the two men having anything in common other than the fact that they both spend a lot of time in hotels – more than 300 nights a year, in Marriott’s case. Brooklyn-born Schrager co-founded with Steve Rubell the most hedonistic nightclub the world has ever seen – Studio 54, where the famous rubbed sequins with the infamous. The club later closed and Schrager went on to be imprisoned for tax evasion before moving into high-end, bespoke designer hotels and property, where his success earned him rock-star status. He is often pictured partying alongside regular guests and customers, including Madonna and Kate Moss.
Marriott is a besuited 76-year-old Mormon, who started life as heir to the root beer stand in Washington DC owned by his father, and went on patiently to create the biggest ‘cookiecutter’ hotel chain in the world. Step into a Marriott – any of the 3,000 around the world – and everything from the patterned carpets in the bar to the Marriott-branded shower gel in the bathroom is instantly familiar.
But Schrager insists this is one relationship where opposites attract. “He’s not like me and I’m not like him. He can’t do what I do and I can’t do what he does. But together we can do something extraordinary, especially in service. It’s a one plus one makes three.” By combining Schrager’s aesthetic flair and cachet with its own mass-market experience and organisational muscle, Marriott hopes to attract a younger, wealthier, more fashionable traveller and gain entry to the fastest-growing sector of the hotel market.
Over the past three years – until the financial crisis sent the hospitality market into a tailspin – boutique hotels’ perroom revenue growth in the US, the world’s largest market, has averaged 11% a year, one third above the industry norm, according to independent US-based hotel analysts, Smith Travel Research. Rival groups, notably Starwood, which already runs its successful boutique-inspired W chain in 25 locations from Mexico City to Seoul, are already reaping the rewards. It’s time for Marriott to play catch-up.
For Schrager, who has more money than he could spend after selling his hotel group two years ago, the new venture is about catching the curve, proving to himself that, at 61, his trend-spotting instincts are still as sharp as ever. Style and the mass market are no longer, he argues, a contradiction in terms. In key sectors, notably fashion and consumer goods, quality and good service are going more mainstream. It’s time for the first “massbut-class” hotel brand.
“Consumers are more and more sophisticated and educated,” he says. “They respond to individuality and originality. The fact that you are doing it on a large scale does not undermine that. Look at Apple. It comes up with these products that are universally appealing to people of all ages and all stratas of wealth.What I am doing for Marriott is not dumbing down. It is just designed for a bigger market.”
Schrager also wants to prove wrong the critics who claim that his hotels only appeal to people who wear black all the time and live in Clerkenwell. “I’ve been working on a big scale deal for years. I’ve wanted to do it. It’s the scale itself that is sexy to me. I’ve never done it before. I’ve only ever done one-offs. It’s a new mountain for me to climb.” And it’s getting steeper by the day, thanks to the worsening economic slump. The latest figures show that occupancy rates at US hotels are down by more than 10% in the last two months. “This may be the hotel industry but there’s certainly no free lunch,” he laughs.
Each of the new 150 to 250-room hotels will have a different look. “They will be in different buildings, in different cities and will have different designers. It will be a chain but it will not look like one.” However, good service and “a sense of entertainment” will be consistent. Each hotel will, for instance, have that Schrager trademark: the ‘destination’ bar and restaurant. “We’re in an experience economy. People pay premium for it.We will offer consistency of experience and attitude.”
With no hotel open yet, it’s still early days and some critics predict the edgy Schrager and the stiff Marriott will eventually come to blows. US-based hotel analyst Jim Butler recently asked: “What will Schrager do when Marriott criticises the colour of the silk or some innovative design feature in the bathroom?” Schrager admits there have been disagreements. “At the start they kept asking me for a list of approved designers, a book of standards, how big the rooms would be. I said ‘No’ because it all depends on the property and the city.”
But he insists each problem has been thrashed out – even the tricky issue of lighting. Schrager likes dark lighting in the hallways to create a bright, dramatic entrance into each room but concedes the corridors at the new hotels will be brighter. “People are looking for division between us. There isn’t any.”
But what about the thorniest issue of all: what to put in the bedside tables? Marriott hotels have bibles. Schrager hotels have ‘intimacy kits’. “Ha!” laughs Schrager. “I’m not telling you who won that battle.You’ll just have to check in to find out.” www.editionhotels.com John Arlidge writes for The Sunday Times
