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

Ever since I started this blog I’ve made posts here and there about Vernon Hill’s banking ventures – Commerce Bank/Metro Bank USA and then taking the Commerce Bank/Metro Bank concept overseas and I was really excited to see it launched in the UK. While reading a lot of news articles on the opening of the bank – from customers reactions, to “analyst” reactions, three  themes always become apparent and as I customer of the original Commerce Bank – and still to this day, a customer of TD Bank (Commerce Bank was bought out by TD Financial a few years back) thought it was worth explaining to those who are not that familiar with the UK Metro Bank brand/business model.

#1 Similarity to Commerce Bank

Looking at the interior pictures of Metro Bank UK, vs what I see – even today – in the Commerce Bank/TD Bank locations its like a mirror image. It’s almost eerie how everything from the wood paneling, the fabric designs on the chairs and even the carpeting is exactly the same. It’s clear that Hill and his wife’s design team are using the successful design ideas and essentially re-releasing it.. As they say – if it ain’t broke, don’t fix it!

#2 Low Savings Interest Rates vs the Overall Market
One of the biggest complaints – really, the only complaint – I’ve been seeing about the launch of the Metro Bank brand are interest rates that aren’t as competitive as other banks in London – which people think is odd, especially for a brand new banking brand which is trying to make a big push in a market that has seen little or no real competition in decades. One story even goes so far as to say in order for Metro Bank to succeed it needs to be “competitive in rates as well as customer service.”

I’ll tell you this: Metro Bank will probably never have the best rates in banking compared to their peers, probably a few tenths of a percent higher for mortgages, or lower for savings accounts – but that’s not what is going to bring in the customer. The customer service and the Commerce Bank concept is what will win the customer.

A major cloud over Commerce Bank’s head when it was being shopped around was what larger bank would have the stomach to purchase Commerce and keep it’s “convenience” features that cost so much (7-Day banking, etc), one reason that Commerce was able to get away with not following the industry with rates was because the customer benefited in other ways – which I’ll explain in a bit.

#3 The Metro Bank (Commerce Bank) Concept
Metro Bank was launched with the tag line of “Love Your Bank At Last” and has a 4-point Metro Bank Promise: 1) Surprise and Delight every customer 2) 7 Day Banking 3) No Stupid Bank Rules 4) Satisfaction Guaranteed.

There are a few things that to this day prevent me from leaving TD Bank, and those are the things that Vernon Hill pioneered through Commerce Bank and will further refine with UK Metro Bank ..

7-Day Banking and Extended Hours – I can bank on Sunday afternoon,  meaning, if I have a question on my account, I can walk in and see an account representative on a Sunday afternoon. Need a cashiers check? Same thing – no waiting for the next banking day. How about if I’m off on a holiday – Columbus Day, or Labor Day for example – great day to go to a bank right? TD Bank agrees – and that’s why there are lines in the drive-thrus and always a few people waiting on line to see a teller inside. What if I need to cash a check after work – say, 6PM? No problem. TD is open until 8PM, 5 days a week.

In case you haven’t realized – there are no other banks that are open that late – even on a Friday. In fact, Wachovia (soon to be Wells Fargo) closes every single day at 5PM – except for Friday, they are open until 6. Anyone who drives past a TD Bank can attest – there are always cars in the parking lot, no matter what time it is. It was always a running joke between my friends and I that they would rent cars and park them in the parking lot so they always look busy – nope.. Not true. They just always are busy.

7-Day Banking & Extended Hours isn’t just a gimmick, its a feature that TD Bank customers have become reliant on.. And it still amazes me that the other national banks in America haven’t caught on to it yet.

Free Coin Counting – When I was younger I’d save up my pennies, quarters, nickels and dimes. Once the container was overflowing, I’d spend a few days rolling coins, have to label the coins with my bank account number and then bring them to the bank. Sometimes I even had to make an appointment so they could count the coins over again. Commerce Bank thought to put a free coin counter in every single branch, then allow anyone – even those who don’t have an account with them – to bring in as many coins (loose, and mixed coins – they don’t have to be rolled or categorized by type) as they can and have them counted in a matter of seconds – or minutes if you really had that many. Its such a convenient, yet simple idea that has brought in thousands of customers.

No ATM Fees – If you use an ATM Card at a non- TD Bank ATM, TD Bank does not charge an ATM fee for using another banks ATM. Sure, the other bank may still charge you something but TD doesn’t tack on their own charge (but if you have over $2,500 in your account, TD will even refund the fee the other banks ATM charges). TD Bank is the only bank that I have come across  (except for credit unions and savings banks) that does not charge you to use another banks ATM. I have not seen one regional or national bank that has a policy similar to that for everyone from the lower-end customer who keeps an average balance of $50 in their account to the super high end client who keeps tens of thousands in ther account. No discrimination.

Instant Debit Cards - If you open an account at TD Bank, you walk out of there with a permanent working Visa debit card. No waiting 2 weeks like every other bank I’ve ever seen for the card to be printed and then mailed out to you. Have you ever lost your ATM card, or had to have it replaced due to fraud? No problem, call their 800 number, then find the closest branch – even if its in another state and not the branch you opened your account in – and within minutes you can walk out with a working permant Visa debit card. That’s ground breaking right there.

Metro Bank is going to blow the UK banking market away. The latest stats have UK Metro Bank reaching their 1st year goals in opening new accounts and capital in only 3 months – encouraging them to expand alot faster than they expected and reach their goal of 200-250 branches within the London metropolitan market.

Congratulations Vernon, you did it again, and I’m proud to say – I’m still a fan.

andrew@alconic-inc.com

Ever since that post went up, I hadn’t seen or heard anything about the new logo and everything has been status quo.

Today however, Hilton Worldwide just announced what is essentially a brand relaunch for DoubleTree. Not only is Hilton updating the logo but they are changing the brand name to ‘DoubleTree by Hilton’ – and with both changes I think they went too far.

Brand Name Change

The name change is similar to the naming scheme that Hilton uses for their brands outside of America. For example in Europe, Asia and Canada the DoubleTree, Hampton and Embassy Suites names are always followed with “By Hilton”. This may make sense for overseas customers who are more familiar with the Hilton brand name, yet do not easily associate Hilton Worldwide’s other brands as being a safe, clean hotel with similar quality standards as the Hilton name. At the least – it may raise the cachet of those other names by being associated with Hilton…

I don’t think that equates to the same feeling for hotel guests in America. Sure, the average hotel guest wouldn’t avoid DoubleTree because its now associated even more with the Hilton brand, I just think that in some cases it cheapens the already established brands of DoubleTree, Embassy Suites and Hampton Inn. A good brand is something that needs to resonate with the customer, make the customer feel good about frequenting the establishment; if they wanted to associate the brands closer to Hilton – why not just rebrand everything as a Hilton?

New Logo

Hilton’s choice of a brown color for a new logo absolutely floors me – (notwithstanding the fact that the new logo reminds me of the South Carolina symbol of a tree and moon). Why would a company whose name has the word tree in it portray a dead tree in their logo? Not only that, but green is the new black – green is the best subconscious reminder of eco-friendliness – brown on the other hand.. Well, that just makes me think of trees dying because of pollution and environmental waste.

Hilton Worldwide feels the new logo is “modern, and updated” and has “color palettes custom-designed for the brand”.

I say “blah”

Whats Next

This rebranding of DoubleTree is the first phase of a complete overhaul of the DoubleTree brand which apparently hasnt had any major changes since 1995. I think it’s also the first of some major changes that will appear thoughout Hilton Worldwide’s brands in America.. I can see Hampton Inn and Embassy Suites joining the rest of the Hilton Brands (Home2Suites, DoubleTree, Garden Inn, and Homewood Suites) joining in on the party and having “by Hilton” plastered all over the name.

It’s ashame, its almost as though Hilton doesn’t have enough faith that their individual brands can stand on their own without being closely associated with Hilton.

andrew@alconic-inc.com

To amend and restate the Certificate of Incorporation of the Company to change the name of the Company from “MGM MIRAGE” to “MGM Resorts International” 

This change, if approved (and it most likely will) will take effect immediately – in fact MGM Mirage already has the new domain name up and running – just redirecting to their current site. (http://www.mgmresortsinternational.com) 

As companies grow and evolve over the years – its sometimes necessary for them to change their name to better reflect the direction they are heading in. Some examples which come to mind are Apple Computer changing to Apple, Inc. in January 2007, or who could forget Radio Shack’s corporate name from 1963 until May 2000 - Tandy Corporation. 

There has been some speculation that the reason MGM is dropping the Mirage name is to distance itself from Steve Wynn, who sold Mirage Resorts to MGM Grand, but that sounds too much like a conspiracy theory when it looks like all MGM is trying to do is better reflect their growing stable of businesses and international footprint. 

When MGM Grand, Inc and Mirage Resorts, Inc first merged, each property contained gambling, and was located within the Continental US. Now, MGM-MIRAGE now has a number of non-gambling properties in the planning stages, and they’ve also started to franchise some of their brands through MGM-MIRAGE Hospitality. Plus their footprint now reaches beyond the shores of America from Dubai, to Vietnam and Macau. 

An example of the MGM brands being franchised can be found in the Dubai Pearl development, where they are constructing Bellagio Residences and Hotel, MGM Grand Hote and a Skyloft Hotel (based upon the Skylofts at MGM Grand in Las Vegas.) Two brands that MGM-MIRAGE Hospitality has not really provided details on is their mx and emblem brands which were mentioned in a profile done by Hotels Magazine back in 2008, but that magazine has since shut down their website. 

While I’m sure the brand recognition will help fill these hotel-only resort properties, I think it will be interesting to see how people will respond to going into an MGM Grand w/o being able to gamble. 

andrew@alconic-inc.com 

I just came across a news article about a Kmart store in Iowa City, Iowa which is testing a new concept – a laundromat which will be on the side of an existing Kmart, it will be called “Kwash”

The chains intention is to draw additional shoppers and their time by offering low cost laundromat services. While their clothes are being washed, they can shop in the KMart store, or vice versa. In addition the laundromat area will have free wi-fi.

Kmart is testing the concept in Iowa City, Iowa because they feel the demographics are right there for this type of service, and its hoped that more people will shop Kmart because of the service. It’s interesting that Kmart is pursuing this because the type of demographic which utilizes laundromats is typically on the lower end of the income spectrum.

Its no secret that Kmart is quickly losing the battle of the discount stores, with WalMart & Target putting more and more money into their stores to make them appealing tot he customer, whereas Kmart is essentially letting their stores rot.

WalMart & Target also are increasingly going toward the higher end customer – WalMart is starting to bring in name brands that typically would not be found in a discount store and Target (often referred to as ‘TarJay’) has been catering toward the higher end clientele during its exponetnal growth over the past few years.

Kmart and Sears Holdings are beating to their own drum, and it will be interesting to see how the chain/company hold up a year or so down the line, – especially since their recent earnings showed over a 25% drop in income. Trying to bring in more and more customers who are only looking for bargains is not going to bring them out of their doldrums.

Although, it may give them good exposure for their Kenmore washer and dryers – but then again, those are the same people who probably won’t be buying them anytime soon either.

andrew@alconic-inc.com

I accidently came across this interview today – live – while looking for a picture of Barry Sternlicht & Steve Hanson ringing the opening bell at the NYSE this morning.

Wow. I’m glad I did. (Archived version of web cast should be available here)

Maria Bartiromo, interviewed Barry for about 15-20 minutes where he gave a lot of interesting insight into how he became successful and how he looks at the world and how he became who he is today.

• Sternlicht started Starwood Capital at 31, after losing his job in real estate, and being completely broke, very humble beginnings.
• He created Starwood Capital because he loved real estate and he loved finance, and he loved design and architecture “if you can make money doing something you love – that’s great”
• Says never give up and keep trying, failure is good. If he didn’t fail with his real estate job before Star Cap, he would not be where he is today.
• When he put together Starwood Hotels, he always dreamed of starting W, a contemporary, modern, hotel chain – the likes of which were not seen before at the time.. Getting Sheraton and Westin together were just a way to the means to be able to build W.
• Made a short comment that I’m still researching.. I thought he said “We launched a new hotel brand, Place Card Hotels..” (I think that’s what he said – then mentioned the city, which I can’t remember) “and just opened the first location on Saturday..” Cant find any information about it anywhere. Anyone have any information?
• Started the Westin Heavenly Bed after his wife fell in love with a mattress from 1-800 Mattress. Thought – why can’t hotels have a mattress this comfortable? They’d pay an extra 20 bucks a room for it. When it would only cost the hotel an extra $.50. Now almost everyone has followed suit.
• Created 1 Hotels as a way to be environmentally conscious. Side benefits – employees & guests would self select.. Employees would search out top work for 1 Hotels to “do good” Guests would go after the brand which actually does good, rather than go to a hotel “which doesn’t wash towels every day and calls themselves environmentally conscious.”
• Guests who go to a 1 Hotel will take the experience home with them – creating the ability to sell things to guests after they leave.
• Sternlicht made an interesting sidenote about 1 Hotels, which demonstrates his humility; while talking about 1 Hotels, he said “We have yet to create one yet.. But you just don’t quit..”
• Made an excellent mention about being passionate about something – and using social media, including blogs to talk about that.. Says.. If you’re passionate about something, talk about it online – social media, create a blog, the people who share your same passion will come to you..

Well said Barry. I’ll hopefully be hearing from you soon.

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

From their press release:

Starwood Capital, through an affiliate, announces today that it has completed the acquisition of Golden Tulip Hospitality BV’s Franchise business, its Development & Representation businesses, Joint Venture interests, and the brands, trademarks and intellectual property of Golden Tulip, Tulip Inn and its related brands.

There still needs to be integration done to combine Golden Tulip into the Louvre Hotel Group’s franchise business – but I’m sure that will happen in due time.

One item the press release didn’t touch on is if Starwood Capital is actually going to be owning any of the actual Golden Tulip hotels. Originally it was stated that they were purchasing around 250 Golden Tulip locations (out of over 700 which the Golden Tulip brand managed), or if its purely a non-real estate purchase.

Starwood Capital is a very real estate heavy company, but their hotel group has been leaning more toward the franchise and management end of the business – and less on actually having complete ownership of the properties.

andrew@alconic-inc.com

Yes, that’s correct, and that’s the same thing that Sillerman stated – although I didn’t make it sound as bad as he did.

I came across this story in the NYPost where Sillerman stated:

I think I have shown conclusively that I am not knowledgeable enough about the real estate business..

That’s not to say that he had bad ideas – one idea, which consisted of building a huge Elvis themed resort on land his company owned on the Las Vegas Strip – directly across from MGM’s CityCenter sounded like a slam dunk.. I mean what else would be better in Vegas than a high quality Elvis themed resort from the person who owns Graceland and the rights to Elvis Memorabilia?

His second project was a resort to be built in Anguilla; this is how I first learned of Sillerman and Flag Luxury as the project was initially going to be a St Regis Resort, then a Baccarat Resort. Now the project is all but dead – construction has not started, and the golf course which was to be the centerpiece of the resort destroyed because Sillerman decided to stop spending $200,000 a month to water the course. Not only that but he claims he has put over $200 million of his own money into the project – much more than the original $15 million he had agreed upon.

I give Sillerman alot of credit for having the guts to stand up and admit defeat, something that’s very hard to do especially in such high profile developments such as these.

There is no word on what Sillerman will do next, but it sounds as though his entire investment in the Anguilla property and the Las Vegas Strip property will be lost. The strip property was foreclosed upon a few months ago and the Anguilla property is going through the same property.

Most likely the strip property will be purchased very inexpensively by an investor and held onto for a number of years until the Las Vegas economy picks up – then the next biggest thing will be built. As for the Anguilla property, it sounds like that will go the same route.

andrew@alconic-inc.com

Back in April, Starwood Hotels sued Hilton Hotels, and two of their employees – Ross Klein and Amar Lalvani for taking trade secrets and confidential information to build the Denizen hotel brand. At the time Hilton came back with their standard boiler plate response to a lawsuit “we feel this suit has no merit and will vigorously defend it” – but I think it was clear that they really had no leg to stand on.

Since that lawsuit was filed Hilton was ordered to stop all further development or marketing of the Denizen brand and they put alot of the employees within Hilton’s Prestige Portfolio’s development team on paid administrative leave – the same employees who had worked at Starwood’s Luxury Brands Group under Ross Klein.

Hilton has pretty much removed all references to Denizen from their websites and press releases and taken down the Denizen Hotels website – but no official word from Hilton or Starwood has come out about Denizens actual fate.

For a comparison – Hilton’s other recently announced brand – Home2Suites has already been integrated into the brand bar at the bottom of all Hilton Family web pages.

Most likely Starwood & Hilton will do an out-of-court settlement which will force Hilton to scrap anything having to do with the Denizen brand, start from scratch on a new boutique brand, and fire the employees who used to work at Starwood then moved over to Hilton. The alternative is a long and protracted legal battle that Starwood is almost definitely going to win.

Hilton was dumb, they put themselves in a precarious position and because of that will end up having a black-eye within the industry and end up even further behind in creating a boutique hotel brand. At this point Marriott’s Edition is looking better than Denizen, even though Denizen apparently had more contracts under negotiation and more work done Edition did in less time. Then again – Denizen’s development was sped up by the use of Starwood’s confidential documents.

It also leaves to question the status of the projects which were expected to include a Denizen – first and foremost, the Cosmopolitan Resort & Casino in Vegas. That project has seen more high-profile problems and issues than anything I’ve ever seen before. I suspect yet another delay in the project and yet another hotel brand (perhaps W?!).

My friends over at HotelChatter have also been following the Denizen saga, so you might want to read up on it over there as well.

andrew@alconic-inc.com