Schrager also announced in the same press release that he was selling his interest in the Gramercy Park Hotel, which has been a great success – but not without unrest between him and partner Aby Rosen.

With Schrager Hotels, Schrager is looking to create two distinct hotel brands – as I mentioned in this post a little under two months ago. He’s looking to launch then in “24 hour cities” around the world, and has already placed bids on a number of properties in New York City, is currently proceeding with renovations on his purchase of Chicago’s Ambassador hotel and recently took a tour of the Chelsea Hotel in NYC, but deemed it not right for what he’s looking at. And by the way – I’ve never seen so much press coverage about a hotel developer taking a walking tour of a hotel in my life, are we that desperate for news lately?!

Schrager Hotels currently is still using the IanSchragerCompany.com domain name/website – typing in SchragerHotels.com just redirects to his primary website, which in itself has not been updated in years – it’s entry on edition hotels is still listed with the original press release, and doesn’t even refer to the brand by name yet (if you remember – the partnership was announced, but it was a few months before the name was chosen). Details about the 2 new brands are still difficult to come by. Today’s press release only stated that the new company will have

..one luxury lifestyle brand and one that will be reasonably priced. Both new brands will be rolled out in 24 international gateway cities around the world with the first opening in Chicago in 2011. (The Ambassador which should open in the Fall)

I’m curious to see where Schrager will take these new hotel brands and exactly how they will be positioned, will the reasonably priced brand be priced similar to Starwood’s Aloft? Or will it be priced similar to a Sheraton/Westin, yet have the W Hotel feel? I predict the luxury brand will easily be positioned within the same level as the Four Seasons, or Ritz-Carlton – yet have a boutiquey feel, pretty similar to his creations with Morgan’s Hotel Group. From the story in today’s WSJ about the launch, the hotels in the less expensive brand will have hundreds of rooms, leading to the possibility that they could be convention center hotels, a unique pairing which I dont believe has been done yet – “stylish hotel convention centers”.

I also saw mentioned today that he is looking into hotels that have been in major cities for 30-40 years and need loving touches to bring them up to par to standards that people expect when staying in a hotel.

One thing I do like – and it sets the tone of his company and brands is the logo. I’m always fascinated by the logos that companies choose to represent for their brands – the good brands will choose a logo that has more than one meaning – not just a graphical representation of the comapny’s name.. A good logo will also set the tone of the brand – be it classy, funky, elegant, modern, etc.. Schrager Hotels does both of that. Let me explain how.. The logo is clearly a “SH” with the H superimposed over the S – but it can also appear as though the H is made up of two I’s – standing for Ian. Additionally the font they used is a font which reminds me of the Gothic look – which is excatly what some of his past creations have shown in their designs, case in point: the Gramercy Park Hotel.

In my opinion, there are really only two people who really set the standard for whats “next” in hotels – Barry Sternlicht and Ian Schrager. It will be fun to watch this brand grow and become what Morgans Hotel Group could have been.

andrew@alconic-inc.com

I have to say, it’s hard to believe that this day actually came – almost a year later than it was originally supposed to open under the original developer Bruce Eichner, and 5 years after the project had its groundbreaking. In fact, a lot of people thought it would never open at all. It’s interesting to note that the Cosmopolitans neighbor – MGM’s CityCenter – took less time and is much, much much bigger.

I wanted to share some sidenotes about the Cosmopolitan and it’s development that seem to have been lost in the shuffle of it’s grand opening today..

-Unlike the original plans, condos will only be in the West Tower (the West Tower is the one not on the Las Vegas Strip), originally the condos were to be split between the two towers and intermixed with hotel rooms.

-There are about 2,000 condos available for sale still, only 214 are under contract – possibly to close on Jan 1st. (via LV Review Journal)

-Bruce Eichner, the original developer of the Cosmopolitan, is already off onto another project – just like he said he would be in the WSJ article I posted to in my first Cosmopolitan Las Vegas post. He is looking to finish the troubled One Madison Park highrise right on NYC’s Madison Square Park, an absolutely beautiful building which is going through the same troubles that the Cosmopolitan once went through – at least this time he’s trying to be the savior instead of looking for one.

-The interiors of the Cosmopolitan were designed by David Rockwell and the Rockwell Group – he’s the same person who created Starwood’s aLoft interiors, and a favorite restaurant of mine which is a little closer to home – Bobbys Burger Palace. Apparently Bruce’s original interior elements contained 20-ft high dancing robots, which to me would be just ridiculous.

-The Cosmopolitan project is still owned by Deutsche Bank, and Deutsche intends to make the project a long term investment and play an active role in its management. Out of all the other major Vegas/Atlantic City casino projects, Deutsche is the only one who actually stuck to it’s guns and finished the project in this economy. They get kudos in my book for that. Recently, Morgan Stanley let it be known via an SEC filing that they would let their Revel Atlantic City project essentially sit vacant and unfinished for years until the economy bounces back since they have been unable to find a buyer. That’s even after Morgan Stanley was willing to take no money for the project until the investor made a 20% return on their investment of at least $1.2 billion to finish and open the development.  The Fountainebleu in Vegas, which is over 70% finished – a lot of rooms were completely furnished – was purchased for only $150 million by Carl Icahn, leaving the lenders with almost a $1 billion loss.. Wow.. I think that in 5 to 10 years Deutsche Bank is going to look great by finishing this project and not selling it for a song. This economy is tough though, and if you don’t have the capital, well – you’re hands are tied. Deutsche Bank is a large, worldwide company, but they are still almost have the size of JP Morgan Chase & Bank of America by assets.

-Ok, I have to make one mention of the interior of the hotel which has been bugging me until today.. You know those 8 pillars in the lobby (if you’ve seen pictures or video of the lobby, you’ll know what I mean) are full video walls on all four sides, floor to ceiling, no projection screens, no 3D images, no LED walls, they are full motion video screens. Wow.

Best of luck to the Cosmopolitan! Only 40 more minutes until the first bet is placed.

andrew@alconic-inc.com

One of the 2 towers that make up the Cosmopolitan Las Vegas

It’s been a very interesting journey for the Cosmopolitan – starting back in 2005 with the announcement that it would be managed by Hyatt Hotels, then after the original foreclosure and take over by Deutsche Bank, it was heavily rumored to be turned into a W Hotel.. Then after Ross Klein left Starwood to join Hilton Hotels – it was an open secret that the Cosmopolitan would end up being one of the first Denizen hotels, and well – we all know where that went.

It’s a huge win for Marriott, a big loss for Hilton – who was originally hoping to come into the marketplace swinging with the Cosmopolitan as a Flagship Denizen property, and Starwood still doesn’t have a presence in Vegas for its W Hotel brand, a location which would be perfect for the W.

This is a huge step for Marriott because it gives them a huge appearance front and center on the Vegas Strip – up until now Marriott had no boutique or architecturally significant properties in Vegas. It’s also going to assure that the property will be managed by an experienced group and will be frequented by many people who are just looking for a place to utilize their Marriott Rewards points.

I’m really curious to see how the Ritz-Carlton tie in will appear, I have a feeling that one of the two towers may be catered toward Ritz-Carlton guests, be a bit more high end, but we’ll see how that ends up playing out as time goes on.

andrew@alconic-inc.com

The benefits for those hotel owners is the ability to tap into Marriott’s excellent supply chain, taking advantage of the discounts that Marriott gets because of its large buying power. The real benefits that will put actually put more heads in beds is allowing guests to earn or redeem Marriott Rewards points for their stays as well as the exposure the hotel will gain by being part of Marriott’s reservation system.

It’s interesting that Marriott would choose to go this route – historically Marriott prefers to heavily brand their properties and supply each property with plenty of Standards and Procedures. Although hotels in the Autograph Collection will still have to meet certain criteria to be part of the group, they are not requiring every hotel to have the same type of sheets or serve the same type of breakfast selections as you’d find in a Courtyard or Marriott.

I really dont see any major downside to this new “Brand” but I think it will be interesting to see how many people will stay at an Autograph Collection hotel when all they were looking to do was stay at a Marriott or Courtyard. Marriott has owned Ritz-Carlton for years, and has not really integrated Ritz Carlton’s marketing and reservations with that of Marriott’s. I think the reason being that associating Ritz Carlton so close with Marriott may cheapen the brand.

On the other hand, I can see a hotel which is part of the Autograph Collection emphasizing its affiliation with Marriott – giving a guest who has otherwise never heard of the hotel enough trust (via the Marriott affiliation) to stay at the hotel.

Marriott is saying that they will have at least 25 hotels under the brand by the end of 2010; I’m really interested to see what these hotels will be like. Will the Autograph Collection be similar to Starwood’s Luxury Collection – very high-end properties in spectacular locations – or will it hold it’s own and have a unique mix of everything from 50 room modern boutique hotels, to 200-year-old historic properties?

We’ll have to see.

andrew@alconic-inc.com

Sheraton Hotels is a perfect example – the 9th largest hotel company in rooms with 143,000 rooms, but only 400 hotels, what makes Sheraton so large with so little? Sheraton has ALOT of convention hotels with 1,000 or even 2,000 or 3,000 rooms, whereas Courtyard by Marriott has over 800 hotels, and only 117,00 rooms.

What caught my eye was Starwood Capital’s growing influence on the list. Next year with their pending acquisition of Golden Tulip, and their Group Du Louvre hotels Starwood Capital should easily become the 8th largest hotel company in the world with over 1,500 units – #7 is Marriott for comparison.

Not only that, but the list doesn’t take into consideration any of the hotels which Starwood Capital owns, yet is branded under another brand. I know that Starwood owns hotels branded as Hyatt (one in Chicago), Sheraton (Yankee Clipper – soon to be Ft Lauderdale Beach), Westin (Fort Lauderdale), or Le Meridien (I believe 90% of the Le Meridiens worldwide are owned by Starwood Capital.

It amazes me how Starwood Capital is able to be so large, yet still manage to stay under the radar as well as they do.

andrew@alconic-inc.com

PS: Take a look at the 325 list - its pretty fascinating.

Not much has been said about these new positions – the information was gleaned from an interview that Derek Gale, a writer from Hotels Magazine had with W’s Vice President of Brand Management.

W’s marketing focus will move even further toward events, with more fashion programming (like W’s backstage lounge at New York’s Fashion Week) and music release parties in cities across the globe.

The fact that they are willing to hire someone to be a music curator and a fashion director – for a hotel brand – speaks volumes about the direction Starwood sees W going in. It’s similar to what Starwood did with the LeMeridien brand when they started LM100, and its no coincidence that W’s new boss is Eva Ziegler, whose previous position was brand director at LeMeridien.

Alot of people may ridicule the W brand because of their attempt to be trendy and as well as their “commercialization” of the boutique hotel concept, but no matter what anyone says – they are very successful at it. Unlike some hotel brands that attempt to open hundreds of hotels a year, W sticks to opening just enough hotels that its still able to capture the feeling and the essence of W.

Some boutique hotel companies may do the boutique feel a little better – Thompson Hotels is the first that comes to mind, but their individual hotels are not part of one name-brand. Indigo Hotels is another brand that claims it’s a boutique and tries to give the boutique look and feel – but the segment the brand is in, and the acceptable standards that the hotel has would never reflect a true boutique brand. Not to say that Hotel Indigo is not a quality brand – it is, but it doesnt have the amenities that W would have.

For the majors, Starwood, Marriott, Hilton, Choice, Intercontinental, Wyndham - Starwood is still the only hotel company that has a real boutique hotel product in the market today. Hilton’s Denizen seems DOA, Marriott’s Edition is taking so long to get off the ground I’m wondering if it’s going through some major modifications, Wyndham & Choice don’t even look to be interested in a high-end brand, and Intercontinental has Hotel Indigo.

It’s going to take a lot of catching up to do for any new or existing hotel brand to eclipse the W as hotel brand that’s easy to replicate (relatively speaking of course) and has so many tie ins and marketing kicks that one-up W in the marketplace. The experience and the knowledge that Starwood has on W is tremendous – and a perfect example of that is the value placed on it in the pending Starwood/Hilton lawsuit.

andrew@alconic-inc.com

Wow. This was a surprise!

It’s great news for the Washington DC area in this down economy, and pretty much makes the Washington DC area the lodging capital of America. In addition to Hilton - Choice Hotels (located in Silver Springs, MD) and Marriott (located in Bethsada, MD) plus a large number of hotel management and hotel investment companies are all located within the metro Washington DC area.

I’m very curious as to why this move was made in the first place, even though Hilton has been headquartered in Beverly Hills for decades, a move across the country is a huge undertaking, requiring almost all staff to either move with the company or look elsewhere for work. Does Hilton have the confidence that they will still be able to keep their talent after the move? It’s asking a lot to uproot families from an area that they most likely have grown up in to move to an unfamiliar area – with their other choice being to look for a new job in a horrible job market. I’d say it’s a way for Hilton to encourage attrition without having layoffs, but the costs of moving a headquarters operation is much more expensive than it would cost for layoffs and severance packages.

It’s been suggested that a major reason for the move to the DC Metro area is due to the abundance of hospitality talent in the area, but that’s not good enough reason on its own to move a major international firm’s headquarters over 2,000 miles away. There is no doubt that Hilton is on the verge of a huge corporate change – the launch of Project Global 21, and another major announcement to be made on Monday at ALIS, plus the new regime installed once Blackstone purchased and finally seems to be ready to put Hilton back on the map in terms of being an aggressive competitor in the domestic and international hotel field.

This talk about Hilton moving reminds me of Starwood’s big move from Phoeniz, AZ to NY after they bought Westin & Sheraton, and in 2006 Starwood even announced plans for another major move – from its 200,000 sqft headquarters in White Plains to at 400,000 sqft headquarters either Norwalk, or Stamford, CT or another location in Westchester County, NY. Since that announcement was made, nothing has been said and I think it’s safe to assume that any plans to move to another headquarters is just not viable because of the economic climate.

One good thing about the Hilton move is rent would be alot less expensive than it would have been a few years ago, and it also gives Hilton the ability to start with a clean slate in office design and environment helping employees feel immersed in what they are working for…

Plus – Hilton is alot closer to NJ, where I live, and with the possiblity of all these job openings, maybe thats where I can start to make my mark in hotel development.

andrew@alconic-inc.com

Hilton has announced a press event during the conference about their “new development concept”, and one of their executives has stated how the announcement may be one of the “worst kept secrets in the industry”. Hilton took Ross Klein from Starwood Hotels earlier this year to spearhead the creation of a much needed boutique brand.

Hilton is in the minority at this time by not having a boutique brand – every one of Hilton’s competitors has a boutique brand and it is a market that Hilton is noticably absent from.

Is Hilton Too Late?

With the economy and the credit markets in the toilet (to be nice about it), why would Hilton want to announce a brand new hotel brand? The boutique hotel customer now has alot of choices both high end and low end (NYLO/aloft), and with Marriott & Schrager’s Edition – the possibility arises of competitor who will once again re-define the boutique hotel industry. What can Hilton and Klein possibly offer? 

Everyone knows that this economic downturn will not last forever, and in order for companies to grow in the future – they have to plan for the future, and anticipate what their guests and customers will want in the future (unlike.. GM… Who still has zero clue as to what their customers want.) so Hilton is making the right move by developing a boutique product and even announcing it in this type of market. Yes, they are very very late – W Hotels has had a 10 year start, but in 20 or 30 years it wont matter, and developers who like working with Hilton will want a boutique product from them.

Not much has been said about the brand, but its been the worst kept secret because everyone knows they are going to announced a boutique brand, but thats about all the industry knows. I’ve found out that the food and beverage service will probably be outsourced by a well known chef or culinary company. That’s a great idea if they pick a high caliber name, but it also runs the risk of diluting the brand of whoever they choose, making it not as exclusive as they’d want. 

I’ve also been able to find out that the brand will be 4.5 stars and each property will contain on average 200-300 rooms. Lastly, it will be very “conversion friendly” which is great for Hilton because it will allow new hotels to be added to the system very fast since a renovation will take much less time than a completely new-build hotel. By going that route Hilton walks a thin line because a hotel may have originally been designed as a Sheraton, or a Hilton, or even a Courtyard so that the layout and building construction fit that brand identity – being rebranded as this new brand may confuse and dilute the brand identity they are trying to achieve. One of the most important parts of creating or building a brand is having the same look and appearance in their buildings – picture a McDonalds in a building originally designed for Wendys, or a Taco Bell in a building originally designed for a Dunkin Donuts.. It can happen, but it’s going to look funny. 

I’m very interested to see how this will pan out – focusing on conversions will ensure a quick and relatively inexpensive growth, but the core DNA of the brand may be hurt.

Hilton has alot on their plate right now – I think one of the biggest issues is public perception and the difference between some of their brands and the individual identity of those brands, specifically Doubletree, Waldorf=Astoria & Conrad. According to their CEO, that is something they are aware of and working on – in 2009 Hilton is expected to increase the brand identity of Waldorf=Astoria & Conrad – hopefully that will go for the Doubletree brand as well. Now more than ever branding is important to ensure that customers will keep coming back to your locations – and pay more for your services because of their perceived value.

Prior to Blackstone’s purchase of Hilton, the company never seemed to have a clear direction – demonstrated by the fact that until just prior to the Blackstone acquisition, the Hilton in North America was different from the Hilton in the rest of the world – severely limiting the growth and the ability for the different hotels to work together. Now with Blackstone Hilton is finally getting back on the right foot – including the creation of a boutique brand.

andrew@alconic-inc.com

Anybody remember the W Hotel – Sunset? Probably not.

All hotel brands experience the occasional deal falling through – sometimes even a year or so after it was announced, and sometimes even when construction has started. In fact, the current economic climate will show that more and more in the near future.

Usually whenever a hotel is cancelled – immediately all references to it online disappear, from the official website of the brand, to the architect, etc.

Occasionally one falls through the cracks – or the architect is still so proud of it’s creation, they see no reason to remove it from their website. Recently I came across one hotel in that situation.

On Starwood Hotel’s Development website are these brochures for each one of their brands, for the most part they are kept fairly up-to-date, but the brochure for W Hotels is badly outdated, so outdated that it has stats on hotels to open in 2006 – that currently are not scheduled to open until 2009, also stats on hotels that have been cancelled and will never see the light of day.

Ever hear of the W Sunset Hotel?

This is one of the hotels on that W Hotels development brochure – it was supposed to open in 2008, and was supposed to be built by the same developer as the W Scottsdale (another hotel that was significantly delayed – originally scheduled to open in 2006, it just opened last month – August 2008.)

The W Sunset was supposed to be located in Los Angeles on the corner of La Cienega Blvd and Sunset Blvd, in a development called “Sunset Millennium” which was to include a Marriott Courtyard, the W Sunset and some restaurants. This was going to be in addition to the W Hollywood which was less than three miles away on Hollywood & Vine (the W Hollywood is now under construction).

Property where W Sunset was to be located.

From what I’ve been able to find out – the development of the Sunset Millennium project has been put on hold, or stopped. Their website is under construction, and no new information can be found since 2005. It looks as though the original developer, Apollo Real Estate Investors & Wolff Urban Management sold the property to Broadreach Capital Partners in December of 2006, although its not clear if that is the entire property – or just a portion of it which includes a 10-story office building.

So is the W Sunset dead? I think its a good possibility, since the Sunset Millennium website is not working and nothing has been said of the project in years by Starwood or anyone else, but it would be nice to see a W there.

Surprisingly W only has one hotel in Los Angeles right now – the W Westwood, which is a very popular hotel with celebrities and TV shows, even Enrique Iglesias used it for interior and exterior shots in his music video “Do You Know” the W Hollywood will be a much needed expansion of the brand into the town – but with NYC having 6 W’s open or under construction, and Atlanta having 3 open or under construction – LA needs more W’s to keep up its cachet of being hip and the place for celebrities to go.

If you didn’t click the link up top – here is a link to the architects website for the W Sunset. The renderings are very much concepts – but you can really get a good idea as to the direction they were going. It reminds me a lot of the W Miami and W Scottsdale with the non-uniformity between all the rooms, and the straight edges around the balconies.

If any new news comes out about the W Sunset (which I’m not expecting) I’ll be sure to let everyone know.

andrew@alconic-inc.com

The Cosmopolitan is made up of the two closest buildings under construction. The buildings in the rear are all part of the MGM CityCenter project. This picture was taken in June

Since that time rumors and speculation have abounded – complete with a Wall Street Journal article stating that Starwood Hotels & The Related Companies are purchasing an interest in it so that it can be completed, yet re-branded as the W Las Vegas, and also – as rumor has it – St Regis Las Vegas (two different brands in one building). Global Hyatt was also supposedly ready to take over the project but they could not come up with the appropriate financing required to do the deal.

Since May nothing has been said about the project – but on August 7th, Deutsche Bank officially foreclosed on the property – completely removing Bruce Eichner from the picture, while still continuing to finish construction.

For all those who have deposits on units there (and a lot of you have contacted me directly to see what the status is) all I can say is this: Construction is continuing, so I do not think that your deposits are in danger of being lost. Of course, please please please read your agreement or contract that you signed which should give you information as to what you can do/expect, or talk it over with a lawyer.

Here is a picture of the Cosmopolitan taken two days after the foreclosure (8/9/08) – showing construction still proceeding as normal

Why is Deutsche bank proceeding with construction? They are so far into the construction process that it would make more sense to finish the project rather than let it sit and raise the prospect that Deutsche Bank may lose more money than they already have put in by it just deteriorating. DB has a much better opportunity to get their money back by finishing the project and seeing it to its completion. Remember – DB isn’t the company that is actually building the place, and nor was Bruce Eichner’s company building it – a third party construction firm (Perini Construction) is actually building the project. So don’t be alarmed and think that a bunch of bankers are now pouring concrete! Also – Perini is also the firm overseeing all construction at MGM’s CityCenter.

Unlike a bankruptcy, a foreclosure does not mean that owner is instantly absolved from all the debts that is incurred – it means that the bank takes over the property and runs it. Typically banks don’t want to run the property – and will instead look to sell it off. Having that many deposits (aka: future residents) is a very valuable negotiating point for the bank trying to sell the property.

It’s been suggest that there are only 4 firms interested in the property: Starwood Hotels (probably with The Related Companies), MGMMirage, Hyatt and Marriott.

I think all four firms would be able to fit the Cosmopolitan into their roster easily – Marriott as an Edition, Starwood as the planned W Las Vegas/St Regis, Hyatt because it’s was the original hotel operator of the Cosmopolitan, and MGMMirage because CityCenter/Caesars surrounds the Cosmopolitan location, in fact – I think most people think that the Cosmopolitan is part of CityCenter.

I think that Starwood or MGM is the best bet – MGM because of where the Cosmopolitan is located – right smack in the middle of a lot of the MGM Strip Property, and Starwood because apparently they were so close to consummating a deal earlier in the year..

I’ll keep everyone posted on anything that i hear!

andrew@alconic-inc.com