Marriott Corp. is teaming up with Ian
Schrager for a global expansion of Schrager's boutique hotel
concept, creating a new brand that will develop as many as 100
hotels around the world.
Marriott CEO and
President J.W. "Bill" Marriott Jr. and Schrager jointly announced
the somewhat unlikely alliance last week, standing together on the
rooftop of Schrager's Gramercy Park Hotel in New York.
Though the brand
has yet to be named, Marriott and Schrager employed effusive
language peppered with superlatives to characterize the concept as
a "vision" that would take the hotel industry "to a new
level."
"Nobody has done
what Ian has been able to do with his hotels time and again, and he
is the perfect partner to help us create and launch a new, modern
genre of hotel," Marriott said. "These hotels will be an excellent
complement to the Marriott portfolio of brands and allow us to use
our global platform and ability to execute to create ... the first
truly global branded boutique lifestyle hotel on a large scale. We
expect the brand to set the standard for decades to
come."
Schrager called
the deal a dream come true and "an affirmation of everything I have
been trying to do my whole life."
"We won't be
replicating anything we have done before," he said. "It will be 100
individual hotels."
Schrager said the
hotels would cater to an underserved market of guests who were
expecting a unique experience rather than just a place to
sleep.
"Together,
Marriott and I have a new vision and plan to radically rethink and
catapult the lifestyle boutique hotel into the present by capturing
the spirit of the times," he said.
PricewaterhouseCoopers principal Bjorn Hanson called the
partnership "an exciting combination."
"Ian Schrager has
an absolute record of creativity, innovation and market success,"
Hanson said. "And Marriott is a global leader that has consistently
high performance."
Still, he noted,
the partnership is less about creating a new hotel category than
about building out the boutique concept on a large
scale.
And while a
partnership between two such well-known industry leaders is
expected to enjoy an edge in the race by hotel companies to grow
and diversify internationally, the new brand will have plenty of
competition. More than 30 new brands have been announced by hotel
companies in the last 30 months, Hanson said.
"This gives
Marriott another growth opportunity, to the extent that Marriott
has very good market coverage," he said. "This allows Marriott to
have another type of hotel added to the markets where they already
exist."
Marriott: Looking for a partner
Marriott said the
company had been looking to enter the boutique market but had not
wanted to go it alone. He said he knew that Schrager was his man
after seeing the remodeled Gramercy Park last November.
"I sensed his tremendous enthusiasm for continuing
to create great products," Marriott recalled. "I said, 'He's our
guy. We've got to do something together.'"
The partnership
is in some ways a marriage of two opposites: a traditional leader
and an industry rebel of sorts who is credited with inventing the
boutique hotel concept.
Marriott, one of
the world's leading lodging companies, operates nearly 2,900
properties around the world. Its 2006 sales totaled more than $12
billion.
Schrager and his
business partner, Steve Rubell, founded the popular nightclub
Studio 54 in 1977. They turned to the hotel business after serving
time in prison for tax evasion, introducing the boutique concept
with the Morgans Hotel in New York in 1984. Other hotels, such as
the Royalton and Paramount in New York and the Delano in Miami,
followed. (Rubell died in 1989.)
After leaving
Morgans Hotel Group in 2005, Schrager founded Ian Schrager Co.,
which owns, develops, manages and brands hotels, residential and
mixed-use projects. It is currently involved in projects in New
York, Miami, Las Vegas and other cities around the
world.
While well known
internationally for their uniqueness, Schrager's hotels did not
fare the post-9/11 downturn well, according to an industry analyst.
Thus, a partnership with a company like Marriott was not a surprise
to insiders. Before announcing the Marriott partnership, Schrager
had been talking with other big hotel groups, including Starwood,
said an industry insider who asked not to be identified.
The partners said
the new hotels would be located in gateway cities throughout North
and South America, Europe and Asia. Initial markets they said they
would explore include New York, Miami, Los Angeles, Chicago, San
Francisco, San Diego, Boston and Las Vegas in the U.S.; London,
Paris, Berlin, Frankfurt, Madrid, Barcelona, Milan and Rome in
Europe; and Beijing, Shanghai, Singapore, Bangkok, Seoul and Tokyo
in Asia.
The hotels, which
will be owned by third parties, will average 150 to 200 rooms. Each
will be designed to reflect the best of the cultural and social
milieu of its location and of the time, Marriott and Schrager
said.
In addition to
their aesthetic appeal, the partners said the hotels would also be
environmentally responsible.
"People today are
sophisticated, and they understand good design, quality,
originality and commitment to excellence," Schrager said. "They
will not accept something derivative, and they want the ethos and
soul of a hotel to be authentic and have character.
"They also expect
and deserve impeccable, modern and gracious personalized service
that is at the same time luxurious yet down to earth. It is the
ultimate balancing act of these apparent contradictions to create a
hotel that is simultaneously specific and customized, yet
universal."
The partners will
divide responsibilities, with Schrager leading the effort on
concept, design, marketing, branding and food and beverage.
Marriott will oversee the development process and will operate and
manage the completed hotels.
In particular,
Marriott will use its relationships in the development community to
identify potential partners and owners.
Marriott and Schrager said they expected to have at least five firm
development deals signed under the new brand by the end of 2007 and
100 hotels open or in the pipeline within a decade.
To contact reporter Jeri Clausing, send e-mail to [email protected].