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 Do Not Disturb

michael SLEEPING WITH THE SUITS
... AND THE JEWELRY


BY MICHAEL MATTHEWS

March 30, 2006 -- Maybe you can help me. After 45 plus years in the hotel business, I am now totally flummoxed.

Can you tell me what Capella, Solis, Armani, Missoni and Bulgari have in common?

Perhaps you've heard of one or all of them. If not, let me tell you what they are: They claim to be new luxury hotel brands of the "boutique" variety and they are being spawned in the most unusual places by the most unusual people.

Bulgari is out of Marriott in Washington and Bulgari, the jewelers based in Milan. Solis and Capella have headquarters in Atlanta, but they manage a peculiar mix of resorts in places as diverse as Ireland, Mexico and Long Branch, New Jersey. The first branded Solis property will be a conversion on North Michigan Avenue in Chicago and the first from-scratch hotel for Capella will be a 100-room operation inside the old Breidenbacher Hof in Dusseldorf. Missoni is based in Milan, but the hotels are run by a company based in Brussels and the first properties are planned for Kuwait, Dubai and Edinburgh. Armani has also set its sights on Dubai, where the company that owns the properties is based, but the management is in London and Giorgio, of course, is in Italy.

But if you read the promotional blurbs from these companies, you would swear that they were all under the same ownership. They all have virtually identical mission statements. They all come out of the same mold without an ounce of originality among them. And they all use the same meaningless buzzwords: six stars; unique; global presence; personalized service; separating the ordinary from the extraordinary; and so on and so on ad nauseum.

Several of these nascent chains actually do have luxury hoteliers running them. Solis and Capella are the creations of Horst Schultz, who guided Ritz-Carlton through the 1980s and 1990s. He is a marvelous man and I wish him well in his new ventures. But he's never run a luxury boutique hotel in his life. He is more accustomed to creating large boxes, albeit nice boxes, and decorating them with English hunting prints. Meanwhile, Armani has hired Bob Riley. He led Mandarin Oriental for ten years and transformed it from a sleepy regional chain into one of the successes of the modern era of hotelkeeping. But why did they put him in London when the company is in Dubai and the man who lent his name to the venture lives in Italy?

The others? Bill Marriott, the patriarch who guided the rapid growth of Marriott, is a class act and I wish him every success, too. But what does Marriott know about luxury hotels? It's a huge hotel factory and Ritz-Carlton has suffered since Marriott bought it. Bulgari and Marriott have feuded ever since the first--and, to date, only--Bulgari hotel opened two years ago in Milan. The Bulgari Hotels Web site doesn't even mention the word "Marriott." As for Missoni, it is the corporate brainchild of a company called Rezidor SAS. Most of their hotels are generic 3- and 4-star properties marketed under the Radisson and Country Inns brands. It also has the misfortune of trying to resurrect the nearly moribund name of Regent, a once-great group of luxury hotels with which I once had more than a passing acquaintance.

But what really worries me is whether any of these new luxury boutique chains can ever make any money. Aman Hotels & Resorts, arguably the model for luxury boutique hotel companies, has not turned a decent profit in any of its 18 years, not even with its $1000-plus-a-night rates. Rafael Hotels, a group of luxury boutique properties, was purchased by Mandarin Oriental six years ago. Rafael wasn't making much headway when it was sold in 2000--and Mandarin has subsequently shed some of the Rafael properties. I guess one could look to Kimpton Hotels, but its boutique success hasn't been at the luxury level and much of its profit has come from smart real estate management and restaurants, not hotel-keeping.

So what's the secret that the new boys think they know that the rest of us don't? There has never been a truly successful chain of luxury boutique hotels. I say there won't be ever one, either.

A "boutique chain" is itself an oxymoron. So's the concept of a "luxury chain." I can honestly say that an individual manager or management company working at anything below the 5-star level can not "manage up." They have all tried--Hilton, Marriott, Starwood, you name it. None has truly prospered. I know this from personal experience. I was intimately involved in helping Starwood build a chain around the St. Regis in New York. As a hotel-keeping venture, at least, St. Regis hasn't distinguished itself.

The bottom line, I think, is that you can "manage down"--but not up. And you can't do it corporately. There are many successful luxury boutique hotels, but they are almost always independents and usually run by the same family generation after generation. They cater to the hotel cognoscenti and you and I rarely hear of them. Each hotel usually has its own special flavor, superb service and wonderful, but simple, food. Some are design marvels, some are classics, some cater to the adventurer. About the only thing they have in common is membership in services such as Leading Small Hotels of the World or Preferred Hotel's Boutique division, the Cadillac of small-hotel marketing and reservations organizations.

I'd look to them if I were in the market for a boutique hotel experience before I'd start trying the Armanis, Bulgaris and Missonis. After all, I know nothing about clothing, jewelry or leather goods, so what the hell do Missoni and the rest know about hotels?

And one last postscript. I see my old boss, Barry Sternlicht, the former Starwood chief executive who championed the idea of St. Regis as a chain, is now looking to build a group of luxury properties around the Hotel Crillon in Paris. And I notice that Hilton is going to try to build a "collection" named after its 1,245-room hotel in New York, something called Waldorf. I'd recommend that you and they stay with the salad.

This column originally appeared at joesentme.com.

Copyright 1993-2006 by Michael Matthews. All rights reserved.