Complete Oral History of Boutique Hotels
Nearly 40 years after the birth of the boutique hotels movement in the U.S., more than two dozen founders and key players exclusively tell Skift how it all happened in this 60,000 word deep dive into how it transformed the way we travel.
Even if you're not quite sure how to define exactly what a “boutique hotel” is — and you're not alone, trust us — chances are you instinctively know one when you see one. Today, nearly 40 years after Bill Kimpton opened his first hotel and Ian Schrager and Steve Rubell opened theirs just three years later, boutique hotels remain an instrumental, and often essential, influence on the way we experience hotels, and the way we travel.
What started with just a handful of hotels on the two coasts of the United States (and undeniably inspired by charming hotels in Europe) is now a major and still growing sector of the hospitality industry. Nearly every big hotel company today has its own version of a “boutique” brand, and there are plenty more boutique hotels being added every year, and not just in major cities anymore.
You can thank the advent of boutique hotels for many things that are now simply standard in hotels big and small, budget and luxury. Their legacy is etched in the sleek lobby bar where hotel guests and locals alike gather. You see their influence in those bustling hotel lobbies that double as co-working and co-mingling spaces. You notice it when your hotel restaurant waiter comes to take your order wearing a denim apron, instead of white gloves and a tie. You feel it the moment you step into your room and notice the careful attention to detail when it comes to design. That artfully placed vase or lamp, the statement chair in the corner.
All of these things — and so many more — are the way they are today because of what the early boutique hotel founders and their successors have done.
Of those who contributed to this movement, many are people whom you may already be familiar with, and there are others who are not. And while we've tried our best to speak to as many people as we could for this oral history project, we can't claim to have spoken to every single person involved. There are simply too many.
There are also certain threads and timelines we chose to focus on more than others. For the purposes of this oral history, we made a conscious decision to focus on what was taking place in New York City, San Francisco, and Seattle. We haven't forgotten that trailblazers made their mark in other cities, namely Los Angeles and Miami, too. But by focusing on these three cities, we felt we were best able to examine the emblematic and symbolic differences in range, and styles adopted by these boutique pioneers.
And, at nearly 60,000 words in length, this oral history is already fairly long as it is, and we're not sure you'd want to read a book on the topic at this very moment (although that could easily be accomplished with so much rich source material at hand).
But of those individuals whom we have spoken to, their deeply personal, insightful, and often entertaining anecdotes certainly give you a better understanding of what it was like at the time, and why things evolved the way that they did. And ultimately, their recollections also help us better understand what's happening today in hospitality, and where that industry is headed.
The deeper we delved into this history spanning almost four decades, the more we realized the following:
First, the hotel industry is a big one, but it's also very small when it comes to degrees of separation. In other words, everyone knows everyone.
Secondly, that perpetual battle, or contrast, between East Coast and West Coast certainly applies here (as it does with many great feuds of creativity and cultural innovation).
And thirdly, while the boutique hotel pioneers and players took many different threads and approaches to how they envisioned boutique hotels, there were a lot of common elements among them, too. They all had that desire for their hotels to be a part of the local community, or scene. They all had a deeply ingrained love of design. They all shared a commitment to hospitality unfettered by old, staid, or stuffy traditions. Most of all, they wanted you to remember your stay, or your visit. They wanted to be different from everyone else. These are the universal threads shared by all of the early boutique hotels, and these core elements remain to this day.
With this oral history, we hope you'll enjoy reading all of these incredible stories of the making of boutique hotels as much as we enjoyed putting it all together. — Deanna Ting
Cast of Characters
(in alphabetical order)
Chapter One: East Coast Versus West Coast in the Early Years
By the early 1980s, chic independent hotels in Europe like Anouska Hempel's Blakes Hotel (opened in 1978) were already well established, and they'd caught the eye of three different tastemakers occupying two separate coasts of the U.S.
In the West, you had Bill Kimpton, the former investment banker who began his boutique hotel company in 1981 with the purchase of the Clarion Bedford Hotel in San Francisco. In the East, you had Ian Schrager and Steve Rubell, the business partners behind the infamous and iconic Studio 54 nightclub, who opened their first hotel, Morgans, in New York City in 1984.
And just as both U.S. coasts have always seemed to possess different sensibilities in stark contrast to each other, so too were the respective boutique hotel styles undertaken by Kimpton and Schrager and Rubell.
Where Kimpton directed his focus on converting old buildings into hotels anchored by a charming neighborhood restaurant, Schrager and Rubell were intent on elevating the allure and magic they had perfected in their nightclubs and bringing them directly into their hotel lobbies and bars. This is where boutique hotels as we know them today got their start.
Bill Kimpton Has an Idea
Laura Kimpton, Bill Kimpton's daughter and a contemporary artist: My dad was traveling in Europe a lot [for business], and he was staying at these boutique hotels where you get to know the owners, have wine in the lobby, and everything was intimate and personable. And then he would come home to the United States, where he was staying at hotels with no personality at all.
He decided that he wanted to invent a boutique hotel where everyone feels like they're at home. He was just very much about making a fireplace in the lobby, and people remembering each other's names. It was kind of like "Cheers," but at a hotel.
Steve Pinetti, former sales and marketing team member when the first Kimpton hotel opened in 1981, and now the company's SVP of inspiration and creativity: I ran into Bill Kimpton in 1980 when he moved to San Francisco. He and I met and I, to some degree, had been doing what he wanted to do [Pinetti had worked in sales and marketing for Hilton for eight years, and for Hyatt for three years, before meeting Kimpton.]
But he wanted to do it differently, at a different level, with a different perspective. What we had in common is we were both sales guys. You get two sales guys in a room and only good things could possibly happen. We hit it off and we opened up the first hotel on April 1, 1981. The Bedford Hotel and Café Bedford here in San Francisco.
I wish I had the napkin where we wrote all this down and had it framed. I can remember the meeting that we had, where we talked about my experience and doing some of what he wanted to do, and then his experience as being a pretty global traveler. He traveled all throughout Western Europe as an investment banker. He loved staying in little hotels where mom and the kids are at check-in and there's dad in the kitchen, flipping up a storm, and everybody is giving you a hug and you feel like you were at home.
I think I remember drawing on a grid, a circle in the top left corner saying, here's our market today. We've got luxury hotels that are small and very expensive. Over here, we've got convention hotels that are very big and impersonal. Down at the bottom we've got tour and travel hotels, which are not so great, and they're a little bit nasty.
Interestingly, in 1981, what was also happening [at that time] was the advent of the big atrium hotels. The Peachtree Plaza [now the Westin Peachtree Plaza, Atlanta] in Atlanta opened in 1977, and it was a 1,000-room hotel with an atrium lobby. The glass elevators, marble and brass all over the place. They were the big disruptors of the industry as it was.
We were digesting all of that on a piece of paper. We saw the sweet spot. The sweet spot was to be as nice as a luxury hotel, but not as expensive, and to be much, much smaller than a convention hotel that only caters to individual businessmen and women, with maybe only a couple of small meeting rooms. Then, certainly much nicer than a tour and travel hotel.
We drew a center in the middle of that triangle and we said, "Here's our sweet spot." We're going to go in on a new 220-room hotel and because we have to have a restaurant and most everybody else's restaurants are outlets or coffee shops, we're going to go create a freestanding restaurant. We're going to have the best restaurant in town. We're going to position it as not even connected to the hotel. We'll find a rising star chef. Build them a restaurant and help make them a success. That was how, just as the 1,000-room atrium hotel disrupted the industry, [we did the same]. Creating our concept and calling it a boutique hotel with a chef-inspired restaurant was equally disruptive, and the proof of that, you look at it today.
Well, it was like any startup. How can anything be exciting and terrifying at the same time? We had everything we had riding on that first hotel. If you're playing poker, you go all in. We were all, all in. It was exciting and it was terrifying.
Mike Depatie, former CEO of Kimpton Hotels & Restaurants from 2003 to 2015: Bill Kimpton was an investment banker, and he worked for the Lehman Brothers back in the day, and he traveled around a lot. He decided somewhere in the late '70s that being an investment banker wasn't feeding his soul anymore, and he was trying to figure out what it was that he wanted to do that he felt was purposeful and meaningful for him. As he was thinking about that, a friend of his said, "What do you have a passion for, Bill?" He said, "Well, you know, as an investment banker, I travel a lot, and I think I have an idea of how to make a better hotel with one that is more highly designed, one where you felt more welcoming, and ideally a hotel that was next to my favorite restaurant."
That's really where Kimpton Hotels came from. Quite frankly, the very first hotel that he built, the Bedford, was a conversion of an old building. It turns out the Bill really didn't know a lot about hotels, and when he opened in 1981, it was a bit of a disaster.
Then the second hotel he did, one called the Vintage Court, he had the idea that he really did want to pair this with a great restaurant. So he went to Napa Valley where he knew a great restaurant at a place called L'Auberge de Soleil, and he stole the chef [Masataka Kobayashi] away from that restaurant. They opened a restaurant called Masa's and that restaurant was so popular that people would book into the hotel to go get a reservation at the restaurant.
Bill used to tell investors that he turned junk into antiques. That was kind of his thing: taking an old building that nobody wanted anymore and repurposing that with capital dollars in a design sense into a great place to stay.
1981: The Clarion Bedford Hotel Opens in San Francisco
Pinetti: I actually moved in to the first hotel for six months to make sure that everything worked. One of the biggest problems we had was our salespeople and our PR [public relations] people were out talking about these great middle boutique Kimpton hotels, and the problem we had was that nobody knew what a boutique hotel was. Everybody knew what a boutique dress store or boutique shop was, but nobody had ever heard the word "boutique" associated with a hotel.
Nobody really heard about chef-inspired restaurants. We had a big education process that we had to go through with leisure travelers in general and then corporate meeting and tour and travel people to get the word out, because people didn't know who and what we were.
We spent a lot of time at the hotel and so, one of the things that developed very quickly was the sense of family with the employees. We were all on an adventure and so it was exciting to have a couple of hundred employees looking forward to come into work every day.
Because ultimately, if you think about it, in 1981, you had two ways to communicate to the world. You either spend a lot of money advertising or you have some rocking great PR people who can get articles placed about you and your new concept and whatever it might be.
Then the third opportunity that we had was to make sure that we had provided an awesome experience for every guest, every day. If every guest who came into our hotel and restaurant every day felt love, felt cared for, felt that they were made comfortable, had a great experience, the stress of travel just rolled off their back. Well then, they were going to come back and we knew that, and not only will they come back but they would tell other people about us. A huge piece of our culture was formed in those first six months. In that first year, it was vital that every guest loved us every day, and thus that was our mission statement, which is still true today 35 years later.
What happened right away, and thank God it did, was that our first hotel took off like a rocket and then our second and our third hotels, which were like one year, then two years later, took off like a rocket. We were now starting to get some good PR and some exposure for this boutique hotel concept in San Francisco.
Travel writers would call and go, "Exactly, who are you guys?" I'm getting people who would stay in our hotel and would write to magazines and newspapers saying "If you're writing new cool hotels, you better talk about these Kimpton guys in San Francisco. They're onto something."
We started to get exposure and then the people who are in the business that analyze travelers and that sort of thing. We were able to determine, early on, that there's a high percentage of the people who travel, roughly 25 percent that, when given an alternative type of hotel experience than the consistency of a big-brand type box, were those kind of people.
We started doing demographic, psychographic, and emotional graphic studies on who our guests were. We found out that when given a choice between brand X or a cool little unique hotel with a wood burning fireplace with the best restaurant in town, that's where they would rather go, that would suit their personality, their sense of adventure. Their sense of uniqueness, their personal style.
Depatie: Well, while it's true that Bill [Kimpton] stayed in a lot of hotels, it doesn't mean he actually understood the hotel business. It wasn't until he hired a guy named Tom LaTour who was kind of the first operating guy, if you will, at the company.
The year 1981 was also not a really great year. It was a recession year. Interest rates were really high. It was really tough to make money. The Bedford ultimately did work out, but when he first opened it, he had a bit of a tough go.
Made in San Francisco
Christine Lawson, former sales manager of the Tuscan Inn and former SVP of sales and catering for Kimpton Hotels & Restaurants, now senior vice president of Loews Sales Organization: "I think the fact that we [Kimpton] started in San Francisco, that it cannot be underplayed or downplayed. San Francisco is kind of this petri dish of innovation, and in the '90s, tech started playing a role and there was all of this innovation in other industries. I think people kind of thought, "Of course San Francisco would have this new cool offering from the hotel and restaurant perspective."
I think starting here with the mindset of the Bay Area, there's this mindset of people who are here are always looking for innovation. Those that are not from San Francisco looking in always have an expectation that the Bay Area is kind of serving different things. I think that we have always had the ability and the run to be innovated, I think that was part of it. The tech industry was really starting to come to life and making big change.
I think people were also hungry for something different and to feel like they were part of a family. They started feeling like when they were traveling they wanted something that was tangible, that they could feel part of, they knew where the teens were and the staff were. When they were coming and going from the hotel, that people recognized them that they were leaving and said, "have a great day," and asked if they needed anything. They kind of saw them for the first time as a guest and a person in the property.
I think it was just that the time was right for people wanting to feel that they were part of something and not just staying in big hotels that all looked the same where everything was very scripted and formal in terms of how they interacted with guests. They wanted to feel part of something and to have things be authentic, and they wanted the experience whether it was on the hotel side or the restaurant side, to feel like it was not transactional. They wanted to feel that there was a relationship being built when they were at the hotel.
1984: Ian Schrager and Steve Rubell open their first hotel, Morgans, in New York City.
Ian Schrager, founder of Morgans Hotel Group, principal of Ian Schrager Company: [When asked if he had any favorite moments or memories from his hotel career] Well the first hotel we did [Morgans], always. It's like a first love, I suppose. But they all are 110-percent, complete emotional commitments to try to do something special. So they all are gratifying once we're done. And then of course I get enamored with my next project but I don't really have a favorite.
You know, when I first got started, I thought the creation of a brand was a sellout. And I've subsequently changed my views on that. I think you can have a brand that kind of indicates to people what they should expect from the product, but it's not selling out, and they don't have to look alike, and it doesn't have to be cookie cutter, it doesn't have to be the same thing rolled out all over the world. But the brand is a message to the people what to expect.
So I think when I first got started, I would call all my hotels individual names. I could have a brand, a unifying element, but each hotel is different. But they have the same attitude, the same approach. Even though they're visually different, the amenities, the entertainment's all different, but there's that thing that connects. Like when a person gets dressed, they have a lot of different clothes, and they look different, but it's still that person.
Bjorn Hanson, hospitality consultant and clinical professor at NYU's Hospitality School, and former financial advisor for Coopers & Lybrand (now Pricewaterhouse Coopers), specializing in hospitality and real estate: When I went into Morgans, my sense was, this has the potential to revolutionize hotels for, not for the reasons of just because it's different and quirky and all, but the hotel industry once was just great hotels. People went to hotels partly because they needed a place to stay. When they went to the Ritz, it was "I'm going to the Ritz." This was some special place.
I thought the boutique launch did recapture that sense of 'I'm going to go to a hotel and I know just going there, I'm going to feel good. When I get there, I'm going to be excited and surprised.' It's going to be a true experience.
Maybe I was looking at it from a different perspective from a quirky, edgy, hip sense of it. Although, again, when people in the old days went to the Waldorf before it was the Waldorf Astoria and The Plaza … again, these were unique hotels that really were special, and we could go on and on. Hotels had individual characters that made them really something special. That's what I thought was being created when I saw Morgans.
When I went to see my first Kimpton — and I went to San Francisco for the purpose of staying in a Kimpton hotel so I could really experience it — to me that was different. It looked, to me, more like a real estate use because the bar … there wasn't really a lobby. There wasn't a sense of arrival. It was a bar that really dominated the first floor and then a little check-in area. When I went to the guest rooms, you know, what I could see is someone put a lot of thought into fabric and colors. The hotel I stayed in, the rooms were really small. The selection of the furniture and things really had been given a lot of thought. If somebody put Holiday Inn furniture in there, there wouldn't have been any room for me to walk around. Furniture would have taken over the room.
By the way, it was the same case in Morgans. If traditional hotel furnishings were used, there would be no room for the guest.
Now soon after the Morgans launch and success, Ian and Steve [Rubell] had been looking to do other hotel projects. They really believed they could do something different and special that might only work in New York. They have a very New York focus.
They looked at the Royalton [in 1988]. The Royalton was a run down, poor-quality hotel. Other developers had tried to convert it to a branded hotel. There were odd things about it.
For example, some of the guest rooms ran parallel to the hallways. Normally when you open a guest room door, the length of the room, you'd be looking at it when you opened the door. Some of the Royalton rooms ran parallel to it. You were looking at the shallow version of the room when you opened the door from the hallway. Some of the rooms were smaller. They didn't meet, at the time, the 12-feet-by-27-feet standard brand configuration. The windows were in the wrong places. The bathrooms were too small. Some number, I don't know how many, but some number, I think it was probably two or three, but I don't know that to be certain, tried to convert that.
I know one developer said for Holiday Inn to do it. No brand expressed an interest to any of these developers because this hotel didn't meet brand standards.
Again, Steve and Ian launched another hotel and it was another great success. It was frankly, more upscale, more food and beverage, than Morgans. It really gave them the sense, now they were in the hotel business. They had a bar, they had a restaurant, and a bigger hotel. It wasn't because of this quirky architectural unique specialty of what Morgans had been. It was more of a traditional hotel conversion. They went on from there.
Bill Walshe, former UK sales manager for Conrad Hotels in the early '90s, now CEO of Viceroy Hotel Group: I think that awareness in the early to mid-'80s was really catapulted by what Ian Schrager was doing. I guess many people of the boutique generation would categorize him as the creator of the genre in many effects. I know that if you speak to some people in Europe they'll say that it started with Blakes Hotel in London which Anouska Hempel was responsible for.
I think Ian was somebody who not only had the commitment to the individual components of design meeting hospitality, but he also had the background in entertainment and nightlife to elevate boutique from being something which was design-led to something which was a very interactive and an emotional experience for the guest, where the hotels became the backdrop for a lifestyle that a lot of people aspired to. Not only in terms of the design aesthetic of the hotels, but of the vibe.
I think it was probably with the emergence of Morgans hotel and then the Morgans Hotel Group and what Ian did and others built on after him, that was probably the first time that vibe became an essential component part of a boutique hotel experience. Whereas, historically, boutique hotels had always existed, but they probably weren't called boutique hotels. In Europe and other places, it was all about smaller hotels that were very intimate and very beautifully designed.
Typically, the smaller the hotel, the quieter the vibe would be. Suddenly, what started to happen in New York and then San Francisco was that hotels had blurred lines between the public space and the food-and-beverage space. The entire hotel building became a canvas for social experience and that had never happened before.
I think ultimately, for me, there have always been small hotels, so it wasn't like Ian Schrager was the first guy to open a 100-key hotel. They'd been around for centuries. I think what happened was Ian refused to accept the conformity of how spaces within hotel buildings were supposed to behave, and that was what created the boutique approach.
The Emergence of "Boutique" as a Term
Ian Schrager has credited Steve Rubell for coining the term "boutique hotel," but differing opinions on who actually coined the term "boutique hotel" remain to this day, as do different definition standards.
Schrager: Yeah, what's funny, Steve [Rubell], my partner, he invented that word "boutique hotel," because it was his way of communicating to the public what we were trying to do. If the other hotels were generic and ubiquitous, they were department stores. We were a boutique. We had a specific attitude. We had something to say. We had real focus. It wasn't about size. It was about narrowness of focus.
And then all of a sudden, we lost ownership of that word, it crept its way into the English language, [and now] everybody uses it. It got old. So we tried to make a difference with that and separate ourselves from that a little bit. We said well, it is a lifestyle we're trying to manifest, a certain lifestyle, there is no difference. For me, they're [boutique hotel, lifestyle hotel] the same thing.
Hanson: When Steve Rubell and Ian Schrager were at Studio 54, I was never anyone who would make it past the velvet rope. Because some investors were asking me to be involved, I went there with my wife and others. Steve Rubell would actually let us in the back door; he didn't even want to let people see we were getting in. That's how uncool I must have been. I did know Steve better than I knew Ian in the late Studio 54 days.
I did not work with them on the launching of Morgans, but I would say Morgans was the first true boutique hotel. The name "boutique" came about when Ian Schrager was trying to describe the concept to others in the fashion industry, in the travel industry, in the hotel industry, and to investors. He'll tell the story more perfectly than I would. It was almost like trying to grasp a way to express it.
He said, "Well, there are major department stores and then there are boutiques. We are going to be more like the boutiques." That's actually how the name boutique came about. It was when Ian Schrager was kind of grasping for a way to explain the concept.
Pinetti: Well, when [Bill Kimpton] talked about his experiences staying in little independent different hotels, and then I would talk about how we were creating [something different] ... I was in a process of creating different little independent hotels based on the type of building that they were in, some are restored, some are brand new, some are mansions.
In the course of that conversation, one of the common denominators that struck out was that our hotels are all unique, and the hotels that we were competing against at the time just weren't made like that. You build a Hyatt, they all look alike. You build a Marriott, they all look alike. You build a whatever, they all look alike.
A lot of our hotels were one of a kind. They were all unique and so then, well, what do we call it? Somebody said ... I hope it was me … somebody said, "It's like a boutique shop. It's like a boutique dress shop or a boutique shoe shop." It's like "Well, then let's just call them boutique hotels. Because they're all one-off, they're all unique, and they're all special in their own way." That's how it started.
At that time, nobody knew what a boutique hotel was, so it really didn't matter at all who was first, and we were not wanting to put our brand name on it. We never even really promoted the word "Kimpton" until 20 years into our existence. We wanted to market each hotel on its own individual basis. Each hotel was a completely separate business. They weren't all leveraged financially behind the scene. Each one was marketed as a true independent hotel.
Bill was a quiet, private guy, so he didn't put his name on the door. This guy Schrager came out of Studio 54 and so it was party time every day. The beauty is, he got a ton of press right away, but we had about a four-year lead time on him and so fortunately, everybody who wrote about him always references, well, Schrager is on the East Coast, Kimpton is on the West Coast.
He got us more exposure in his first three years than we got in our first four all by ourselves just because of his profile, with the media because of his nightclub. The more different people that have come into our space like Ace, even W, they call themselves boutique.
The beauty is, for the writers who had been around, they will always reference Kimpton. For the writers who are maybe more recent, they maybe don't know that we were the guys who initiated it, but at some point, who cares? We're still the most successful of all of them out there. They come and go, and we're still here.
Niki Leondakis, former president and COO of Kimpton Hotels & Restaurants and former CEO, hotels and resorts, of Two Roads Hospitality, now CEO of Equinox Fitness Clubs: There's no precise definition [for a boutique hotel], it's really interesting. I think the term boutique was coined by, I think it was Steve Rubell, sort of comparing Morgans to a small boutique as opposed to a department store.
I think small is key, or at least smaller, smallish. Some hotels that are 400- to 500-room hotels that call themselves boutique hotels, it's kind of like, "Really?" I do think size does matter when defining a boutique hotel. Just because you have a high sense of design and great food-and-beverage operation, it doesn't mean you're a boutique hotel. Boutique refers to a smaller hotel, who knows what the right number is, but I think when it starts to get over 200 rooms it starts to become questionable.
The term "lifestyle hotel," I think that was coined by some people in the larger chain business as a way to make the big bucks. Chain hotels feel more relevant and as a way to compete in this sector where people want an alternative hotel stay that's got a lot more personality, a lot more local connection and inspiration, local discovery for the guests, that lifestyle enables bigger players and bigger hotels to compete in this space.
I don't think there's a precise definition. A lot of people can profess to define it this way or that way, and I've certainly seen industry reports and such, but people use the terminology in an interchangeable way. It's pretty blurry. It's kind of like luxury: Where's the line between upscale and luxury? It's not absolute.
Claus Sendlinger, founder of Design Hotels: When we started in the late '80s, if you would have told anyone about "design hotels," no one would have understood what you were talking about. Like, the first term that was really created was "boutique hotels" by Ian Schrager, because he saw the big hotels more as department stores versus his hotels, which were not defined by size because The Paramount Hotel [one of Schrager's early properties] had 600 rooms, but more defined through the experience of the guest interactions.
That's why he called it boutique hotels. So we were thinking, should we call [our company, Design Hotels] "Boutique Hotels" as a conglomerate? My passion was always parallel to what [Philippe] Starck was doing with the design, and nobody was talking about design, and what the media likes to do is to make people understand with photography. So I thought, if we build up the term, "design," it will become the term for the niche of the industry. And we knew it was a generic term so you could not trademark it, so we said at that time hopefully we will come up with the resources to further define the portfolio and how we curate it.
What Makes a Hotel "Boutique" or "Lifestyle"?
Pinetti: That's a great question, and I must have answered that question a hundred times every day for the first 10 years. In addition to what I just said [about the service], it was clearly our design. In fact, probably our first 10 or so hotels in San Francisco, we hired residential interior decorators to come in and give each one a unique look and one of our hotels was called the Hotel Vintage Court [it opened in April 1983].
It had a wine country look and feel to it. One of our hotels, the Galleria Park hotel in the financial district, had more of a contemporary look. We would use, maybe, a different designer that might do high-end apartments up in Pacific Heights. Our décor was key.
I mentioned "home away from home" earlier on. Every hotel had a real live burning fireplace. We want a guest to have that home-away-from-home feeling. A live, working fireplace was a great way to do it. The sound of the crackle, the sight of the fire, the smell of the burning wood. We called our lobby a living room.
We were the first guys to actually put food and drink in the minibar, those little minibar refrigerators. Every hotel back in the day had them but nobody put anything in on it, they were for the guests to use. We would put snacks and sodas and wine and things in there as an amenity, as a service for people to enjoy.
The other major thing that we were doing was the restaurant. Most hotels in those days had outlets or coffee shops. Nobody was going out and building a unique restaurant that catered to the locals and catered to the public in addition to serving the hotel. We would bring in some high powered chefs, we'd not only get the local rising star, but we had Wolfgang Puck help us open one of our early hotels in San Francisco [Postrio at the Prescott Hotel in April 1989].
That was like Hollywood coming to San Francisco, and we had Masataka Kobayashi help us with our restaurant at the Hotel Vintage Court, called Masa's. It was the No. 1 French restaurant in the United States for, like 10 years. When we opened up our wine-themed hotel, he knew Bill [Kimpton], he came out of retirement and he opened up the most successful restaurant probably San Francisco has ever seen.
We were just looking at the whole world through a different lens. How did the hotels look? How did they feel? What was the guest experience look like? What was happening over in the restaurant? Again, all of those elements, they've all evolved, but they are still what separate us from all the other folks we do business. They separate us from all the other hotel companies that our guests could consider staying at, if not with us.
Al Petrone, former director of operations for W Hotels from 1999 to 2001 and VP of Schrager's Hudson Hotel from 2001 to 2003, now an adjunct professor at Royal Roads University: I think that a lot of it is how you feel. What do you feel like when you are in a Marriott? What do you feel like when you are in a boutique hotel? It would be like saying, "What do you feel like when you are at Starbucks versus the neighborhood coffee shop?" What does it feel like, and it is not any one thing. It's more of a holistic thing. How does the bed feel? How is the check-in experience? Is it casual? Is it stiff? Is it fast? Is it stuffy? Is it corporate? Is it more laidback? What do you feel like when you are in the dining room? What does it look like? What does it smell like? What does it sound like? It's all about the vibe. It's about the experience. It's maybe hard to qualify and quantify, but people know it.
People know when they walk into a cool place they will say, "This is cool." If you ask them to describe, "What do you mean by cool?," they all might give you different answers, but they will all agree that this is a cool place. For some people it might be the design and for some people it might be the crowd, the people that are there. For some people it might be the music that's playing. For some people it might be the way that they are treated or they're checked in. It might even be the way the employees are dressed. If they are dressed very stuffy, sort of corporate, traditional hoteling clothes, that's one thing. As opposed to a bellman who has tattoos and an earring and he's more of a Millennial, or has more of a Millennial look.
It's all about that sort of holistic experience. I think that what boutique hotels do, it's that they give themselves a little more license to take more risks and not be so corporate and so traditional and so predictable. We allowed ourselves to have fun [at W Hotels] and what we found is people want that. Even older people that we didn't think would be in our target demographic.
Lawson: I think a lot of people misuse [the term] "boutique." A lot of times it can be applied just because of the size of the property. Again, you have small hotels calling themselves boutique, which is fine. Then, you have large hotels with 1,000 rooms, like you said, in Vegas, calling themselves boutique.
It's not a size thing, it's really about a boutique philosophy. It's really about what it feels like to be in that building. Whether it's in the lobby or the guest room or the restaurant or the bar.
Again, I think boutique is really about how you are making someone feel. Are you actually interacting with your guests and getting to know them and trying to understand what type of experience they're looking to have and working to deliver on that experience? Again, I think boutique, as people talk about size and design and those things are offered and important and relevant, I really think it's more about a philosophy, or the service that you provide guests.
Bill [Kimpton] was about services. He was about making sure that we serve each other as a team, as employees, and also that we are here to really serve our guests in a very personalized, authentic way that's not scripted or transactional. It's where someone really feels like, "Wow I had this great local experience at this boutique hotel."
Mike DeFrino, former general manager of The Alexis, now CEO of Kimpton Hotels & Restaurants: There's always challenges in every business and in every niche or every time. We're affected by the normal ebbs and flows of the economy, of course. I think there was at least initially a little bit of a reluctance or a confusion around what a boutique hotel was, what sort of experience you were going to get.
The difference between a boutique hotel and a bed-and-breakfast hotel, or the difference between a boutique hotel and sort of a lifestyle, what I like to call a "cha cha cha hotel" that's got a lot of sort of nightlife to it, there's always been that difficulty in trying to fit into a niche. Whether it's boutique or lifestyle or now the collection brands, are adding even more confusion to that identity.
We boutique hoteliers have always sort of fought for our place on the map, if you will. What we're finding, fortunately, is that more and more travelers are looking for our type of experience. It's come home to roost. It's come to the path that we're actually in the right place at the right time now, but it wasn't always that way and people say what's a Kimpton, you say oh, that's a bed and breakfast, or they would say, "Oh, Kimptons don't do meetings, you don't have any meeting space." They would pass their own sort of projections onto our properties.
Meanwhile, we have a hotel in Chicago that's 500 rooms with 20,000 feet of meeting space. We're building a 250-room oceanfront resort in Grand Cayman. We have I think 12 hotels in Washington, D.C. You can't put a finger on exactly what one of us is. That's always been the tricky part of the boutique world.
Depatie: When I joined Kimpton in 2003, maybe in the hotel magazines they were talking a little bit about boutique. Again, the big thing then was, what is boutique? Nobody knew. Every time I go to a conference they'd tell me, "Please define what boutique hotels are."
People thought it meant small. They thought it meant bed and breakfast. Our average sized hotel was 200 rooms, so that wasn't it. Then they thought it just means highly designed, and that really wasn't it. Then lifestyle. I think that, again, was probably Starwood Hotels with Barry [Sternlicht]. I think he said, "I'm not in the boutique business. I'm in the lifestyle business." That sounds better.
It's one of those things where it's like you know it when you see it, right? I think that a boutique or lifestyle hotel is pretty much kind of the same concept. I think what's evolved is that in the industry, lifestyle has meant a little bit lower price and more like an AC by Marriott or maybe even Moxy by Marriott is now a lifestyle hotel. Certainly it would be Aloft, a lifestyle hotel. Maybe a little bit more limited service, maybe a little more lower in price.
For a boutique hotel, I don't know, maybe that's more four-star, a more traditional hotel with hotel services and maybe coupled with a great restaurant. I don't think there's any fine line.
I think you can use both terms a bit interchangeably and how the other participants in the business use the word boutique or lifestyle. I think lifestyle became kind of a hipper way to describe boutique because there were too many people were saying boutique hotels. I know in the business I see people, like a broker, will say, "I'm offering a boutique hotel in wherever." I looked in to it, and it's a 39-room inn someplace. No, that's just a small hotel. It's not a boutique hotel.
I think certainly, it's got a design component to it. The whole idea of lifestyle originally was that you take your lifestyle as you have at home on the road or the lifestyle you would aspire to have, like you aspire yourself to eat at great restaurants, "Oh, gosh, that's a great restaurant," or you aspire yourself that you're a lover of art and you have a highly designed home but you really don't. You live in a crappy apartment someplace. But when you're on the road, you want to have this lifestyle that you aspire to have. That's kind of the idea. It's all kind of made up.
K.C. Kavanagh, former senior vice president of global communications for Starwood Hotels & Resorts: Well I definitely think the boutique hotel birthed the lifestyle hotel concept. When I think of a boutique hotel, I think smaller, I think more independent. I think more of its location but the giant brands are doing this today too. I think the lines are beginning to blur.
Scott Gerber, CEO of Gerber Group, who worked on The Whiskey Blue bar at Ian Schrager's Paramount Hotel and later worked on developing the bars for W Hotels: I think the word boutique hotel has become bastardized. A boutique hotel used to be that little hotel. In Ian's case at the Paramount it wasn't so little, but Morgans was. I think boutique hotel really was the way it was supposed to be was smaller and that meant you'd have better services and whatever you needed whenever you wanted it, they would figure how to get it for you. It wasn't the employee. The staff was not about, "Well this is what we learned in western corporate training and this is all we can do." It was more about, "Whatever the guests need we're going to figure out how to get it for the guests."
That was, I think, what the origination of boutique was and I think that's morphed into more of what today I think is called a "lifestyle hotel" more so than a boutique, because the word boutique really meant small and cute. It's not like that anymore especially by sheer number of rooms for sure. I think it's more about a lifestyle hotel and really catering to the lifestyle of a guest and whether that be having great food and beverage or yoga classes or spin classes. Or whatever it is that the traveling hotel guest wants today, that's really a lifestyle today.
Two Different Approaches to "Boutique Hotels" Emerge
Hanson: The issue with Steve [Rubell] and Ian [Schrager], is that they couldn't be Marriott or Hilton; they didn't have the reservation system or the brand name. They had to almost say, we can't really compete playing the same game. We have to change the game. Let's not have standardized rooms and products. Let's be different because, frankly, that's really the only way we can be effective. If we try to do the same things, we won't have the research and the history and the background and distribution and things.
Bill Kimpton, he later he became a client of mine. Ian became a client of mine later.
Bill Kimpton had a concept for hotels. Bill Kimpton found buildings in secondary locations around San Francisco that had the potential to be converted to hotels and to add a high-energy bar. They were really bars on the ground floor with hotels, that again, no brand would accept these kinds of brand standards, because they were converting industrial buildings and non-hotels into hotel usage. The room sizes and key configurations would not have met brand standards at the time.
We had an East coast launch and a West coast launch, and they weren't the same. They were done with Bill Kimpton almost being a real estate developer, finding a way to use these buildings he could buy and convert effectively. Steve Rubell and Ian Schrager really kind of had a pulse on changing taste and preferences. Again, very different approaches. They came to surprisingly similar conclusions, though. Both [Kimpton and Schrager/Rubell] should be deemed as the founders of boutique, but if I have to give a leader it would really be Steve and Ian.
Pinetti: As time has gone on, and then other people like Ian Schrager, he opened up on the East Coast … as other boutique products began to evolve, it began to give the whole movement a lot of traction. We're the guys who got it started and again I know it was because of our focus with our first [Kimpton] hotels, making sure that everybody loved it every day, and they did come back and they would write to AAA magazine or The New York Times, the Sunday travel section, or The Washington Post.
Enough of our guests made enough noise that had helped us get the exposure that we needed to continue with being a success. The other thing that helped us quite a bit is when we started to go out of San Francisco. Our first movement was up in, our first properties were in Portland, Seattle, and in LA, and then that began to get the movement. It gave us more traction and the word spread at a much rapid rate.
Leondakis: I knew what boutique hotels were by the time I got started in hospitality in the early 1980s, because Ian Schrager and his partner Steve Rubell were so good at public relations and getting a lot of media coverage for what they were doing. I think their definition of "boutique" drove a lot of the consumer's perception of what boutique was all about. This was in the early '80s with Morgans, and at that time Bill Kimpton had already opened his first hotel in 1981.
There were some commonalities and there were some differences between what Bill Kimpton did and what Ian Schrager did. I think Schrager, being based in New York City and getting so much press, it did drive a more universal perception of boutiques being more like what he was doing, which was more nightclub oriented. More drinks and a nightclub scene in the public spaces of the hotels.
Whereas Bill, his boutique hotels were more food and restaurant-oriented. It was all about great chefs, chef-driven restaurants. In San Francisco, one of his early boutique hotels was Wolfgang Puck at Postrio at the Prescott Hotel in San Francisco. You can see there was a slight difference.
Some of the commonalities between what Bill and Ian did were they were both very design-driven, with a strong focus on interior design, and different designs from the traditional hotels of the time. In that era, in the 1980s, what we saw were a lot of large hotels, massive concrete, glass, marble, brass structures, big soaring atrium lobbies, and that was the trend we were seeing with some of the larger chain hotels in the industry. Both Bill and Ian, in their own way, went opposite the trend and did these smaller boutique hotels and took a strong stance on design.
The design, in Ian's case, working with Philippe Starck, was provocative and really taking a stance on modern and it was definitely memorable, high-impact design. Bill Kimpton's approach to design was definitely opposite what was happening in the industry. It was taking a much more residential feel. The hotels felt more residential, they were very comfortable, they had striking designs, but more of a wow I had a really great designer redesign my living room kind of way. Ian's hotels, you would walk into the hotel and arrive at a scene and feel like you were ... It was sort of a velvet ropes type of experience and you were with all the beautiful people and, with his experience and fame from Studio 54, I think that drove a lot of the tone of his boutique hotels.
Bill's, differently, were driven by the types of hotels ... Bill traveled extensively throughout Europe, and he liked to stay at these boutique hotels in Europe, and they were commonplace over there. He wanted to recreate that experience here in the United States because there wasn't really such a thing. Bed and breakfasts, but they weren't full-service. These very warm residentially designed hotels that were intimate, had a high degree of service, and a great restaurant with a great chef was more Bill's approach.
Depatie: Of course, Ian Schrager and Bill Kimpton, earlier, had started the trend of the boutique hotels, but people didn't know if it was a fad or not. They didn't know if it was a bona-fide trend. They certainly didn't think it was a bona-fide segment. Now it's gone from maybe being a fad, if you want, I don't mean a fad but a trend, into a bona-fide segment, the boutique hotel business with everybody, I wouldn't say everybody, but many people in the industry trying to emulate some piece of the model, whether it'd be design, whether it'd be a chef-driven restaurants, whether it'd be adaptive reuse of historic buildings for hotel use, a lot of things that Bill Kimpton did and Ian Schrager, quite frankly, when they first started doing these type of hotels in the early 1980s.
I think a lot of people thought you had to have a brand to be successful [in the 1980s and 1990s], and they [Kimpton and Schrager] did not have a brand. It wasn't clear exactly how they were getting business.
I think that, Schrager in particular, when you add the fashion component to it and the fact that was in fashion places, Miami Beach and New York City, ultimately London, I think that your average person — and they only had a couple hotels — they just didn't show up for them.
Kimpton Hotels was known for its quirky, fun, great restaurant, design but not too cool for school. It was not the velvet rope of the W or the velvet rope of the Morgans hotels, which was Schrager. It was more welcoming and warm but still an interesting and eclectic bohemian kind of design. I think there's kind of an inside thing, that people who knew Kimpton, it was their little secret. Then when I came to the company, I think there were 29 Kimpton hotels, maybe 25, I forgot what, and most people didn't know what a Kimpton Hotel was. They had never even heard of it. The people that did know it, though, were very loyal to Kimpton, and they were very passionate about Kimpton.
Where I think Morgans Hotel Group with Schrager was much more about are you with the most fashionable people and the coolest people that know about Morgans Hotels and should you be allowed in behind the velvet rope? It's just a different orientation, a different way to be successful. I think they were successful with that. It just wasn't what Kimpton did.
Leondakis: There was a definite target audience in the crowd who wanted to be the in-crowd and wanted the nightlife experience, who wanted sort of the scene, loved that boutique, that velvet rope. That was a period in time where people thought that was super cool, a certain type of customer.
Then there were other types of customers, who didn't want that at all. They felt like "I don't want to walk into a lobby where I feel like I'm walking into a nightclub, I don't want to feel like I'm too old or I'm not dressed well enough or I need to be in all black to fit it."
Ian [Schrager], as I said, we [at Kimpton] were clearly differentiated from his hotels. Ian's stuff, and W, fell into the same vein. They were targeted as a sort of a super edgy, cool approach to boutique and lifestyle, with the sort of clubby bar part of it being played up. Again, we were really focused on ... We were a little bit different than that, we differentiated in that we were foodies, and we focused on great restaurants, great environments, but more food-centric.
Bill Kimpton, his idea was to have a hotel that welcomed everyone. I think Ian's hotels were aspirational and there was an exclusivity to them, even though it wasn't a private club, sometimes the lines to get in certain people got in and certain people didn't. The air of exclusivity was part of the experience at Ian's hotels, whereas Bill's were more inclusive and tried to appeal to everyone and make everyone feel comfortable. They were very relaxed and just warm, and intimate, and friendly, and easy to use. They both approached boutique in a slightly different way in that regard, but because of Ian's media prowess, I think the term boutique became associated, at that point in time in the '80s/'90s, boutique became associated with hotels that had nightclubs with rooms on top. That was how a lot of people thought of the term boutique.
I think that's changed today, but there was a point in time when I was with Kimpton where we were doing a branding exercise around the hotels, because they were all boutiques that were brands of one, and we wanted to associate all the hotels together as one collection so that people who loved one hotel could go to another city and find the other Kimpton hotels. There was a moment in time where we were playing with the term, "Kimpton Boutique Hotels," and we shied away from it because we were advised by some brand experts that the term boutique had really been too much associated with that nightclub feel of a hotel and that wasn't what we were and it would be confusing to the consumer.
DeFrino: When I first met Bill Kimpton back in this era of Kimpton, the word "Kimpton" never appeared on anything. It was more of the organization's name, less so than a brand at all. There was no endorsement brand. There was no logo anywhere. It was Bill who said, "I don't want my name anywhere. This is all about the individual hotel and that hotel experience."
Both of those — Kimpton and Schrager — I think very much reflected the place of in the country where they were coming from and the personalities of the players. They were very distinctive. To the point where Bill Kimpton didn't want his name on the hotels and it was the same thing with Ian. Each one of his hotels were named separately. But they approached the hotels from a different perspective.
Bill was not sort of interested in the nightlife part of the hotel business. Bill was very much of a restaurateur at heart. He really cared about great food and great wines and courted great chefs. That was the old saying if it hasn't been quote to you before, was Bill's heart was in the restaurant and his wallet was in the hotel.
Bill's passion was for these amazing restaurants and amazing food and beverage experiences. Each one of them had his mark on it and the hotel, he learned to be a hotelier sort of on the job and brought in some other experts around to help run the hotels. That was his angle. He wanted them to be very friendly and welcoming and very European and understated and not flashy. That wasn't his niche. It wasn't his lifestyle. He lived a very Northern California, take-it-easy sort of lifestyle.
He had more red cashmere sweaters than black suits, if you know what I mean, so it was the way he just approached life. His hotels reflected that. To this day we still are more relaxed, more I think inviting or open and we cast a wider net than some of the other hotel brands. That's all a reflection of how welcoming Bill was and how hospitable he was and how he wanted to be inclusive and not exclusive. That was his ... He wanted his rooms to be full and his restaurants to be happening. He wanted great wine and he wanted to be there to enjoy it all with his guests. That's sort of how it started. That spirit I think is sort of that true hospitality experience is what I think differentiates Kimpton from a lot of other companies is that sort of heartfelt care, that spirit of hospitality that Bill inspired in us 30 some years ago.
For me it's more important for somebody to walk into one of our hotels and say this feels like a Kimpton hotel, rather than come into one of our hotels and say this looks like a Kimpton hotel. That's what we're trying to establish or create with every new hotel is that feeling of friendly welcomeness. Maybe quirky design and a little bit of a sense of humor. The idea that we'll do anything to make you happy. You know you're going to get a highly committed restaurant experience. Innovative bars, creative wine list. That's all part of the experience that we're trying to create every time we build a hotel. It's hard and it's not entirely a scalable process but it's the charge that we're leading. It might be the hardest way to make a dollar in the business, frankly, but I think it's the most fun and most interesting.
Pinetti: I think that they [Rubell and Schrager] were looking a little bit more for the hip and the cool. They were a little more on the edge. A little bit more edgy, if you will. Where we tend to be a little bit more down the middle of the road.
I don't need you to wear a tight black T-shirt. I want you to be comfortable in my hotel, especially if you like sitting in a residential chair having a great high quality glass of wine sitting by a fireplace and mix in with people from every demographics from all over the world and every age group. I'm going to make you feel comfortable.
Our thing was more about comfort versus exclusive. Whether it's business or leisure, we have a very, very diverse following. It's a very inclusive and warmhearted and friendly. I think most of the other people that have come into our space felt like they needed to be a little bit more edgy to get, to compete and to get people away from the big box hotels.
We paid a lot of attention to demographics, psychographics, and emotional graphics. We have a pretty good grip on who our customer is. We actually take that one step further and in the positioning of each hotel, we actually have a muse for each property, so whether they're designing a room amenity or what we should be serving at the wine hour or the morning coffee and tea service, that's taken into account.
Depatie: You probably have to draw a distinction between the Schrager type, the too-cool-for-school hotels and the Kimpton or the Joie de Vivre hotels which were just more interesting personalities but very welcoming, very bohemian.
I think the cultural thing going on [at the time] was that the hotel business was under the impression that they should standardize everything, and Marriott was the one that really drove this through to everybody. That you should be able to wake up in the morning at a Marriott hotel and not know that you're ... There's nothing unfamiliar to you that wouldn't be exactly the same in the hotel at LaGuardia Airport. They enforced all these strict standards in terms of service standards, in terms of design standards, how the room was supposed to look, everything, and people thought that was really cool. It was sort of the Holiday Inn back in the day. Then really like the late '80s, early '90s, I think people started thinking, "You know what? I don't know if this is so great. This is kind of industrial. This is mechanistic. This is efficiency. We're forgetting people."
Kavanagh: Ian Schrager kind of changed everyone's perception of what a hotel could be. Hotels were either bland and generic big boxes or roadside motels or uber luxury, like the St. Regis or The Ritz-Carlton. It was just a total mind shift that a hotel could look like this, like a cool nightclub. I remember visiting New York and staying at one of Schrager's hotels and it was like seeing the "Wizard of Oz" in color.
Gerber: I knew Kimpton a little bit and knew Joie de Vivre. I think they were doing a good job but they were a little bit more, well … Ian [Schrager] was a complete risk taker. Ian would throw — I mean, hiring Philippe Starck to do your interiors and your furniture and stuff was very, very out there. I don't think Kimpton and Joie de Vivre were that kind of risk taking.
The other thing that was interesting about Ian, and then W after that, is that they felt like they were great at putting heads in beds and they thought it was better to leave the food and beverage to the professionals and people that only focused on that. They wanted the hotel restaurant to be just a restaurant, not a hotel restaurant. They wanted the hotel bar to be a cool bar and not just a hotel bar.
Kimpton, when they first started off were running all their own F&B [food and beverage]. I don't know about Joie de Vivre. I'm not that familiar with that brand. But I think Ian was a trailblazer and I think a lot of these people followed in his footsteps.
Petrone: I think for Ian, he was a master at public relations and portraying the hotel as theater. I managed his largest asset, which was the Hudson Hotel, a thousand rooms, a very busy hotel. A place where every week you're hosting Bono or Bill Clinton or Whoopi Goldberg or somebody. It was very busy. Four unions, 600 employees, four F&B outlets, very busy, lots of revenue. It was a very iconic hotel when it reopened in 2000.
Ian's sort of forte was public relations and also treating hotel as theater. It was sort of an experience, not as a hotel stay, but more of like you were going to the theater. It's going to be a theatrical experience. He had his own design ethics, aesthetics, rather and he had his own strong vision of how the hotel should be.
We thought at W maybe we could complement what Ian had in terms of the design and look with a little bit extra focus on service at W.
Radio Interview With Ian Schrager
1987: Chip Conley opens his first boutique hotel in San Francisco, The Phoenix Hotel
Leondakis: Well, Chip [Conley] started in 1987, and his first hotel was The Phoenix Hotel, which is a fabulous little hotel in San Francisco, which is really a motel that's been adapted to make it a cool hangout in the Tenderloin part of the city which is, "transitional."
It's kind of a large rock-and-roll hotel, you get a lot of bands that stay there, there's always something going on in the courtyard, local activities, music performances, yoga happenings, there's always a lot of stuff. It's a cool hotel, but I would say Chip came a little bit later and he was doing a lot of the same type of thing that Bill [Kimpton was doing], but it seemed to be on a smaller scale.
Chip Conley, founder of Joie de Vivre Hotels: I'd gone to Stanford undergrad and then Stanford Business School, and I went to work in the real estate field for Morgan Stanley and the real estate division between the first and second year of business school, and then for a real estate developer out of business school.
To be honest with you, what I found was that my life was sort of just two things. No. 1 was I negotiated with people, so my interaction with people at work was just constantly in negotiations and when I wasn't negotiating with people, I was in front of a computer doing financial spreadsheets on Lotus 1, 2, 3.
I really, over time, I found it all a little soul sucking, and what I was most interested in was looking at how I could take what I thought I could be more class act, which was to be creative and conceptualizing real estate. I liked real estate, but I found that what I was doing was so transactional that it didn't allow me to be creative. The second piece that I felt like I wanted was, I wanted to do something that had more of a sense of meaning and mission to it and something that was very people centric and about making people happy.
Ultimately, that's why I called my company "Joie de Vivre." It was just a daily reminder for myself that I was trying to create a little joy in my own life, and the mission of the company was the name of the company, creating opportunities for employees and our guests to celebrate the joy of life.
I would just say the only thing that was interesting to me, looking back on it, is what drew me to boutique hotels was not necessarily the opportunity but ultimately, it became clear that it was a whole new segment of the accommodations industry.
I'm a big fan of Richard Branson [founder of the Virgin Group]. He wrote the foreword for my first book and he once said to me the mantra he used as he was creating his company, and it was, "I am the market, I am the market, I am the market." That was his mantra. He wanted to create hotels that actually would totally knock his socks off as a customer and I think that's really what led me to create the first hotel and then every single time I was creating a hotel it was like, "OK, who's the person that I want to completely knock their socks off in terms of what that ... and usually, I guess I'm slightly schizophrenic so each one of these hotels felt like it was a bit of an extension of me as well.
Giving Boutique Hotels a Defined Identity
With Joie de Vivre Hotels, Conley started by theming each property after a specific magazine as inspiration.
Conley: I'll start with the magazine idea … I didn't know a lot about boutique hotels when I started. What I knew was that Ian Schrager and Bill Kimpton were starting to get a little bit of media in 1984-85-86 and 1986 is when I started developing the business plan, when I was still 25 years old. I finished the business plan on my 26th birthday, which is Halloween, and amazingly, within two months, I had closed escrow on my first hotel and I hadn't seen it yet. It was this broken-down motel that was in bankruptcy and foreclosed upon in the Tenderloin of San Francisco that ultimately I renamed it The Phoenix, as in rising from its ashes.
What I found with that first property, was that it was a troubled property. It was from a 1950's motor lodge in a bad neighborhood, and it was pay by the hour. It was a pay-by-the-hour place and so, as I started brainstorming what we should do with this place, I found that the core group of people who were involved with the project, some of them investors, some of them on the management team, we didn't have an alignment around what we were trying to create here. What was this going to be when it grows up after we do a renovation?
After a particularly disjointed meeting with the group, I, at the end of the meeting, just out of the blue, just said, "Well, if you could imagine a magazine that defines this hotel, the personality of this hotel and there were five adjectives that defined the magazine, what would the magazine be, and what would those adjectives be?
Our next meetings took place the next week. I told everyone to bring the magazine of their choice to the meeting. We had, I think, seven of us show up to the meeting and five of the seven people showed up with Rolling Stone magazine and we had not coordinated this.
The adjectives that came up were adjectives like "adventurous," "cool," "young at heart," "irreverent," "funky," and so, what we found is that it became a great organizing principle for how we can get aligned about what we're creating. The adjectives helped us to understand if we're going to renovate the rooms, how will the rooms be? Funky or irreverent? How will the staff be trained in such a way that they're sort of cool and adventurous? What will the restaurant do for this? What will the services we offer do?
What happened, over time, was sort of magical in that it was a great way, behind the scenes, to concept a hotel, to create a sense of soul in the hotel. The part that was magic was what I call "identity refreshment" and that was about six months to a year into the Phoenix being open, and it became successful pretty quickly, against all odds.
What we started to see is that the people who are coming didn't really fit a demographic. They fit a psychographic. A demographic would be what you look like on the outside; a psychographic is what you feel like on the inside, and we started to see that the kind of words people would use to describe themselves and why they liked The Phoenix, were words that you could use … that were basically the same five adjectives that you would use to describe that hotel.
What I mean by "identity refreshment," it means that when someone's staying at The Phoenix, when they check out three or four days later, they feel more funky, irreverent, and adventurous. For a certain niche of people in the population, feeling more funky, irreverent, or adventurous is something they'll pay a premium for, and it's more than just a lodging experience. In essence we were having a psychological impact on them. That became our operating model for the 52 boutique hotels that I oversaw, creating over my 24 years as CEO.
Boutique Hotels' Early Connections to the Local Creative Community and Culture
One primary way the early boutique hotels gained popularity was by connecting to the local community and culture at the time. For these hotels and their proprietors, it was as important to invite locals and neighbors into their lobbies, restaurants, and bars, as it was to invite overnight guests. Pioneering hoteliers like Conley wanted to make sure his hotels reflected a particular lifestyle and culture that people were seeking out.
Conley: Well, I think that one of the things that was very obvious was that when creative types were coming to San Francisco, they really had two choices of types of hotels they could go and stay at. They could either stay at a very generic — this is again 1986 to 1987 — they could stay at a generic Holiday Inn or Sheraton, or Marriott. Those didn't have any flavor and back then, again, the hotel chains were as beige as they could be. They didn't want to offend anybody. They thought that predictability was really what defined success, city to city. That each hotel had to feel exactly the same.
The other alternatives were independent hotels that usually were locally operated, but were just generally 10 or 20 years past their prime and in San Francisco they tended to be old, sort of Victorian kind of hotels that just felt like they were trying to attract a 75 year-old.
What was happening in San Francisco was, there was a growing creative movement of people moving to San Francisco. There was actually a very growing, significant growth in live music venues in San Francisco. Two blocks from The Phoenix was the Great American Music Hall, so that was our obvious marketing for us to go after, but a place called Slim's opened up, which was started by Boz Scaggs, and it was not far away from us; it was another venue that became very popular. The Warfield reopened as a venue for music, the Civic Auditorium just six blocks from us started actually doing concerts, the Fillmore reopened as a concert hall, so San Francisco became a live music mecca, and there's also a recording studio a block away from The Phoenix in the Tenderloin that actually got very popular during that time.
One of the cultural factors was that the music industry was starting to come back after having not been in San Francisco for a while. The music industry was big in San Francisco in the 1960's and early '70's and then it sort of went away and it was on its way back. Therefore, The Phoenix became the rock-and-roll hotel of town.
Pinetti: There are basically three things [that made us stand out to the local community at Kimpton]. One would be the experience that we provided, the uniqueness of our products, both the hotel and the restaurant. I would say that would be No. 1.
The other thing was our nonprofits that we were aligned with. Whether it was supporting the fight against HIV/AIDS and having fundraisers and offering up our hotels and our rooms to raise money. Whether it was the environmental program which we have, which is something that we've been doing since 1981, and in our affinity around animal rescue and just the whole idea of pets in general, which is why our pet-friendly program is still the strongest of any in the industry … and then also the fourth element that we were very involved in was the support for women's groups that helped out disadvantaged women get back on their feet, get back in society, and be able to take care of their families.
Our local support was initially based on participating within the fabric of the communities, where our businesses were and where our employees lived. As the awareness around that community work become more well known, people would start then to stay with us because of a shared value system.
The answer, simply, was shared values. People would come to our hotels because we had a value system that aligned with them, along with just being a cool hotel or the great restaurant providing really terrific service. Those are the things that put us on the map right away.
Leondakis: We always paid attention to what everybody was doing I think, that's just prudent in business. Everyone is your competitor, and looking at what other people are doing, and not just the boutique players, I always paid attention to what everybody was doing because anything can be a source of inspiration.
I think still, today, it's execution that defines us. Most people today say the same things to describe themselves in the boutique space. We're all using the words authentic and locally, inspired or locally connected, an immersive local experience, design-centric. Everybody says the same stuff, the winners are outstanding at execution. I think looking at what other people are doing is a good thing because I can inspire new ideas. You can riff off of that.
We did, but I would say we [at Kimpton] were very clear on who we were and who our customer was and why they liked us. We understood very clearly that our customer liked our inclusivity and the fact that we had a welcoming philosophy to all customers. We were early to come to market with an LGBT outreach program, with a marketing to women philosophy. We were early adopters of those types of outreach programs, and also with a diversity and inclusion effort for our employee base. I think, while we did pay attention externally, we were very clear on how we were different, how we differentiated from the rest.
Conley's Approach to "Boutique"
Conley: I think if there's something consistent about my approach to thinking about the accommodations world, including an Airbnb [Conley served as Airbnb's global head of hospitality and strategy from 2013 to 2017, and is now a strategic advisor for hospitality and leadership at the company], it's been thinking psychologically around it.
I've written four books and all four books have a certain psychological element to them. The last two are basically psychology books on some level and the idea of "identity refreshment" or psychographics versus demographics, or how do you create a great culture that drives employees to provide an amazing service experience.
A lot of this sort of came back to, instead of building a rule book and having a target market, you just go out and advertise to those people. So much of it was like, OK, how do you create incentives for employees to do the best work of their lives in such a way that it actually creates the environment where guests feel loved, appreciated, and a sense of "Joie de Vivre"?
Even Joie de Vivre was a silly name by traditional standards. It's a French phrase that most people don't know what it means. It's hard to pronounce and really hard to spell. It wasn't exactly built on the historical approach to calling a hotel company Kimpton or Schrager or Morgans. I mean, my approach was very psychological and very emotionally based, and so I think that that approach, over time, the idea of psychographics versus demographics, became a little bit more apparent to the industry.
One of the things that the Airbnb co-founder — you should really appreciate it — so when I joined [Airbnb], Brian [Chesky, Airbnb CEO and co-founder], he loved that the fact in my book, Peak, I talked about transactional leaders and companies versus transformational leaders and companies. Part of that is, if you're using Maslow's hierarchy of needs, again a psychology theory, it's based on the idea that instead of trying to just manage from the bottom of the pyramid based upon physiological needs and safety and security, which are important — but frankly from Airbnb's perspective we may never win there — anyway, we just have to get good enough there, so that people will move up the pyramid and then the transformation happens higher up the pyramid.
That's true with boutique hotels as well. Boutique hotels were never going to be as predictable and consistent as a Holiday Inn. Holiday Inns lived at the bottom of the pyramid; it was a transactional company with transactional leaders. The way a boutique hotel could succeed was creating a habitat that felt like it was the perfect "identity refreshment."
No one talks that way, but I guess it's feeling like this hotel is an extension of me. Ian Schrager once said, "It's not 'you are what you eat," it's 'you are where you sleep.'" The idea that "you are where you sleep" was, sort of from Schrager's prospective, it meant it's about being cool. His approach was it's always about cool and hip, in the know, and maybe even narcissistic. That might be four of the five adjectives that would define his hotels. He used the same adjectives over time. He wasn't using adjectives, but in essence, that's what his point of view was. "You are where you sleep, and you're cool if you sleep here."
My point of view was, "Gosh, why do boutique hotels have to only own 'cool?' Why is it cool and hip, why is that?" In fact, for the longest time, the boutique hotel world was pretty much, for 20 years, enamored with who could out-Schrager Schrager. Personally, I found that pretty boring because it meant you were just going after the same market of creative types and not going after other niches of independent travelers who wanted something different than the chain hotels.
1989: Steve Rubell, Ian Schrager's longtime business partner and co-founder of Morgans, dies at the age of 45 of complications from AIDS
Hanson: Steve's [Rubell] background was in the restaurant business. He always, kind of, had that hospitality view of the business. Whereas again, Ian [Schrager] was a lawyer so, you know, the difference perspective.
[When asked if Morgans Hotel Group would have had a different trajectory had Steve Rubell lived longer] Again, I'll answer the question, but I don't have much confidence in my answer. I don't think so.
I think Ian, again, was kind of the brains behind the business and got it all. It was more of their personalities resulted in kind of their allocation of their time and tasks. It wasn't that Ian didn't have the natural gifts of understanding trends and market appeal. You know, how to use public relations instead of expensive advertising, and how to appeal to celebrities. If I had to guess, it would have been a little bit more weirdness, I can't think of a better word, with some of the design and things if Steve had continued to be involved. What Ian did was truly spectacular on his own. It wasn't like there was a deficiency that held back what otherwise might have been.
A Period of Cultural Change
Hanson: I'd say if you watch VH1 or MTV and they have the 1980's programs, I mean it was big hair, big fashion. Again, Studio 54 was in everyone's thinking. Including, unfortunately, cocaine use.
The era of celebrity and flamboyance became the boom in the 1980s and ended in recession. I just think there was, again I'll use the word flamboyance, that was part of culture at the time.
I think the hotel industry, through these people we talked about, responded to that, rather than created that or contributed to that. The environment was, it was a ... again, I don't want to sound like an old curmudgeon talking about the good ole days, because they were actually very sad days with substance abuse and the spread of disease and so on. All of a sudden there was liberated view of everything that people couldn't understand some of the consequences of sexually transmitted diseases and substance abuse and not getting enough sleep and all kinds of things. It's very difficult to describe the environment, I'm sure someone could do a better job than I could. It was a bit of a wild, flamboyant time.
The tax incentives that were implemented by the Reagan Administration in 1981 and 82, [following that] there was a mild recession. I know some people didn't find it to be mild. It depended on what industry someone was in or the private sector]. To many people, those tax incentives created a real estate boom, a tech boom, the depreciation rules, the investment tax credit rules really fueled development.
The Tax Reform Act of 1986, how many people do you talk to that can talk about living through? Anyway, the Tax Reform Act of 1986 reversed most of those and was a significant reason why the country went into recession. It started to show in 1986 but really became apparent in 1987 to 1988.
Then there was the appearance of recovery, and then it was the Persian Gulf War in 1990. It's almost hard to remember for people even who were traveling at the time. People didn't want to be on airplanes. The concern was the airplanes would be destroyed, blown up, or shot out of the sky. It wasn't traveling convenience which we're all so focused on now. It was people not wanting to be on airplanes over safety issues during 1990 and into 1991. That recession started in late '86 really harnessed in 1987. There was some recovery but then we went back into very difficult economic period with the Persian Gulf War in 1990 into 1991.
Boutique hotels suffered more than others. There was an attitude at that time, which was probably justified, is that boutique hotels were, I'll use a generally used word, I don't mean to direct it uniquely at boutique hotels, but there's a term that people use called un-serious. Boutique hotels were kind of quirky and extravagant and fun, fun is not a good word, but I can't think of a better one. When companies were laying off people and earnings were suffering for companies. Should people really be staying in these, you know, kind of, flamboyant, unusual hotels?
Boutique hotels suffered more during that period but they also rebounded more as the recovery started in the late 1980's and again in the early 1990's after the recession in 1991, 1992. Or 1990 to 1991.
Chapter Two: A Boutique Movement Begins to Build
Slowly but surely, Kimpton, Schrager, and Conley begin to add more properties, and spread out beyond their respective coasts.
1991: Kimpton's Vintage Plaza Hotel and Pazzo Ristorante Opens in Portland, Ore., becoming Kimpton's first hotel outside of the San Francisco Bay Area
Pinetti: It's funny, too, because Bill [Kimpton], when he came to San Francisco, he just wanted to retire in San Francisco and did not really want to get on an airplane and he had a best friend from college that was living in Portland at the time who kept calling him and saying there's these great buildings in Portland, you got to bring your boutique hotel concept to the Portland, it's the best town. On and on and on.
We would go off and visit with this guy, and Bill is like "What do you think? What should we do? Let's try, we're killing it in San Francisco. We have a lot of our local clients in San Francisco come from Portland."
In 1991, we opened up our first hotel outside of San Francisco in Portland and then right behind that in '92 in Seattle, and then in '94, we went down to Los Angeles.
Once Bill was open to moving out of San Francisco, we basically then identified the cities where most of our business was coming from and that's how we basically determined future cities to go into was based on where are people coming to us from and if we open up a hotel there, they can actually then be involved in helping us make that hotel in their hometown a success. That's how probably the first 10 or 12 cities that we went into were decided upon: where were our customers traveling from?
We didn't really grow that fast. We did one or two hotels but our culture, because it was so based in empowerment and personality, if we were hiring the right people, which we got very, very good at, the culture was intact, quite frankly. The larger we got, the stronger the culture became. Because now I had more people and more cities delivering the experience.
Everybody in all the cities knew of all the other people in all the cities. Anytime we could get people to train or visit one of our other hotels that help keep the spirit alive. I get that question still today as we expand around the Americas and even going into Europe. What about our culture? It's like you know what? I got 10,000 people in the United States that come to work every single day exciting about working for this company and what they do.
One of the things we're very insistent on is that whenever we open up a new hotel or a new restaurant anywhere, some of the key management people need to be Kimpton people. I believe our new property in Amsterdam we're promoting a girl that has a history and a family connection there, that's where her roots are. No matter where in the world we go, our goal will be to put as many of our own people in those new hotels to help keep the dream alive.
DeFrino: When the opportunity came along to work for Kimpton in Seattle [in 1992], I jumped at that opportunity to be a general manager of a boutique hotel. It was interesting because I was coming from a lot of four- and five-star hotels.
The hotel that I went to, The Alexis in Seattle, was a four-diamond, four-star hotel. The second-highest rated hotel in the city behind the Four Seasons at the time. It was very much of a luxury position hotel. It was very high rated for the market but it was a completely different perspective on how to deliver that experience and how to basically build a service model and design a hotel and use the local experiences that make a boutique experience so great.
It was so much different than where I'd come from [The Ritz-Carlton] I found it to be refreshing. I was hooked about 19 years ago with Kimpton. Bill Kimpton hired me to run that hotel. He owned that hotel at the time. That's how I got in.
Coming from the environment I came from, the difference or the way doing business and the way of in the service style was drastically different, although sort of achieving the same satisfaction for the customer, and the same price point. It was an interesting way for me to enter the market. It showed me right away that this whole boutique thing is actually a pretty interesting model and a different way to get to the same end for a property. Great results and great service delivered by committed employees.
Ron Swidler, principal, branding, The Gettys Group: I remember we were at an event at the Beverly Hillcrest hotel, one of Kimpton's early hotels. It was an event put on by the House of Blues. It was drawing people of this creative class and it was as if the design community was opening their eyes.
This did quickly translate to the East Coast. Like the Time Hotel in New York City, one of the early boutique hotels. We were approached by a hotelier in New York to look at the competitive set of boutique hotels in Midtown, and there were 15 at the time. We toured every single one of them. If you look at that number now, it's got to be 10 times that. It just exploded. Then things moved down to Miami quickly as well. I think it went San Francisco to New York to Miami.
Leondakis: I started my career out of school with Marriott, and so I went through their Marriott training program and I was in food and beverage. I started in the bar side of the business, and then I got into the restaurant side. After a few years with Marriott, I joined The Ritz-Carlton where I worked for eight years in multiple properties, and I opened a lot of Ritz-Carltons. I was on the opening taskforce.
For eight years I was with Ritz until I landed at The Ritz-Carlton in San Francisco, and that's when Kimpton was really, in the early 90s, was really well known at that point. I think there were maybe 12 hotels in San Francisco at the time that had great restaurants, and they were well-known — Masa's, Kuleto's, Postrio, a number of really great restaurants. Kimpton had just expanded to Los Angeles, Portland, and Seattle, so it was still a West Coast, small group of boutique hotels.
Lawson: I think I realized, once we left San Francisco and we started growing in other states and getting properties and growing into the Northwest and Chicago, and all these other areas, that was when I realized that this is above and beyond this cool little San Francisco boutique hotel company.
I think part of understanding that, besides the growth, was the press that Kimpton got, both from a hotel and restaurant perspective. We did not do any marketing. Bill didn't want to do marketing. He was all about PR. We were in the press all the time.I think though, the growth, the type of press we got and also just the response we got from the marketplace ...
... When I first started in the company in 1990, people used to ask me when we talked about being a boutique hotel company, if the bathrooms were actually in the hotel rooms, or were they down the hall because in Europe a lot of the restrooms in boutique hotels might be down the halls. We were just full of companies that had guest rooms with bathrooms in our guest rooms and so over that course of the decade of the 90s, again, with the growth and the amount of disclosure we were getting, and the amount of customers, just our revenue generation that we were getting compared to our competition was astounding and it made me realize, "This is a big deal and this is actually going to continue to grow."
Schrager and Rubell's Impact on Transforming Hotel Bars and Nightlife
Gerber: I was a commercial real estate broker and my brother, Rande, followed me into the business, and one of his clients was Ian Schrager when he was developing the Paramount Hotel and so Rande was the real estate broker trying to find him a bar operator to operate this little bar at the Paramount Hotel. Rande brought him all of these cool operators but Ian, having had a ton of experience on his own, wanted to really do it on his own but he wasn't able to, so he ultimately turned to Rande and myself and said, "Look, why don't you guys lease the space from me and I'll tell you how to do it? I can't be involved in it, but I'll tell you how to do it." We thought it would be fun and we ended up opening at The Whisky Blue at the Paramount [in 1991].
Well it was pretty cool, he hadn't really operated a hotel bar, but he had operated, obviously, Studio 54. What he was doing, he created a hotel using the designer of the hotel who was Philippe Starck. Having access to Philippe Starck and David Rockwell to design your first bar was an incredible opportunity and then having Ian give us pointers and inviting his friends and all the people he knew from the Studio 54 days to this bar, it was incredible.
Ian had a great eye to detail so he helped us a lot in designing the place. He helped us a lot in cultivating the right crowd for it and curating the right crowd and it was a huge success from the first minute we opened. At that point there were really not any cool hotel bars. I think they were basically just a place that was a necessity in a hotel. If you were checking into a hotel and you wanted to grab a drink you'd go to the bar before you went someplace else. They were never a place for; nobody from the outside that wasn't staying in the hotel was going to hotel bars.
Typically, you had, since a lot of the hotels in New York are union, very often you'd have people that had been working in these bars for a very long time and were really just there, passing the time. I think that we really created the first bar that was a place that you would want to go to especially as a local to hangout and go to this great bar.
Keeping in mind, before the Whiskey Blue, there was no such thing as the cool hotel bar. You built a bar, and people who were sleeping upstairs would come down for a drink. There was nothing special about it.
Ian really turned the boutique hotel into a whole different entertainment concept and basically threw all other traditions out of the window in doing his hotel and we did the same thing when it came to the bar. The bar was a very unique, sleek, modern-looking place. The music was great, we had the bartenders and servers at the time in catsuits. It was very, very dim lighting but at the end of the day I think the most important part of it was and it holds true today is it's really the hospitality and the people that work with us, how friendly they are and how attentive they are to our guests. That really is what differentiates any bar in my opinion. It was true back then in 1991 and it's even more true today.
With the Morgans hotel [the first of Schrager and Rubell's hotels] it was very different. So with Morgans, we went and we took a basement space and there was actually no bar in Morgans. It was all servers coming in and taking your order and bringing it to you. We had one big common table in the middle of the bar but there was no actual bar to go up and place an order, so that was pretty unique for that time.
Then when we did Sky Bar at the Mondrian [in Los Angeles] and it was really the first outdoor pool bar around and that was a tremendous hit. It was built around a pool, it was all outside in L.A. You can do that because the weather is fantastic and we had people staying in the hotel just to be able to get into the bar.
I think [the hotel bar] was hugely important. The way we describe it all the time is that we develop great bars and restaurants we're great at that but at the end of the day the primary reason that the hotels want besides being great at operating those things, is really to get the hotel guests to make a choice to stay at one hotel over another. The way you do that is by creating incredible demand in your bar or your restaurant where you're at capacity. If you're going to a city and you want to come to my bar and you're staying in the hotel we're going to figure out how to get you into that bar or how to get you a reservation at that restaurant. Hopefully you'll make a decision to stay at my hotel versus the one could be a block away that's very similar. That's a very big part of it.
The other part of it is that if you're going to a city for the first time and let's say again there's a lot of people that have never been to New York and you come to New York. If the bar in the hotel is filled with a bunch of tourists that are from other places whether it be the United States or other places in Europe, and you're coming to New York you want to get that New York experience. If we don't create a bar and a restaurant that has that local attraction where there are those local; and I'm using New York as an example right now. That has a bunch of New Yorkers in it then there is no reason for the hotel guests to stay on property. They should go down the road to that freestanding bar that's got that New York vibe so they can appreciate New York.
The key to making these bars and restaurants great is to create freestanding bars or restaurants that the locals love to go to, that are going cause the hotel guests to want to go too, and that's going to cause the hotel guests to stay in that hotel.
Kimpton's Impact on Transforming Hotel Dining
Swidler: I remember a breakfast meeting I had with Bill Kimpton in the 90s and we were talking about the success of what he created and adding that F&B concept. He was talking about this chef-driven concept he had. The perception of the industry at the time was of flipping restaurants from a loss leader into a real investment, and this was really surprising the people on the ownership side, what he was doing here.
Walter Pisano, executive chef of Tulio at Kimpton's Vintage Park Hotel in Seattle: I started with Kimpton in 1992. Funny enough, I was here in Seattle. I actually just moved back from Washington, D.C. and this was my home.
I had heard about Kimpton coming to Seattle from a very good friend of mine, actually one of the founders of Costco. He was telling me about Bill Kimpton and his company and that he was coming to Seattle. I started to research it a little bit and was able to get a number, a phone number. I actually called and, sure enough, I think it maybe took me one or two calls and they actually connected me directly to Bill Kimpton, which I was pretty surprised and amazed. He actually picked up the phone.
I explained who I was and that I was in Seattle and that I heard he was coming to Seattle. Being the busy guy, it wasn't a long conversation but he was very nice. He said, "Well, you know, you're actually talking a little too high up in the chain. You need to be talking to Bob Puccini [coincidentally, Niki Leondakis' husband] who is in charge of the project." He was great. He gave me that name and then we all connected and kind of took it from there.
I'd gone out to San Francisco. Actually at that point, we had the Alexis hotel [another Kimpton hotel] here in Seattle. The chef at the Alexis, Emily Moore, I happen to know. It's amazing how small the city is and honestly even just the Northwest and San Francisco and Portland and all these connections.
Long and short, Bob Puccini called the chef at the Alexis and asked if I would go talk to her. I knew her. Of course I went and talked to her and she called Bob Puccini and said, "Oh my God, you should talk to this guy." Next thing I know I was on a plane going to San Francisco.
When I researched Kimpton, I saw that they had Kuleto's in San Francisco and it was a restaurant that was one of my favorites when I went to San Francisco. There was that connection. Then researching it and just seeing that the restaurant really wouldn't be a hotel restaurant. I had very, very limited hotel restaurant experience and that wasn't the direction that I wanted to go in. To be honest, I wanted to be in a restaurant, a free-standing restaurant.
Also, the gentleman, Bob Craves from Costco who recommended it, told me a lot about it and he's very much a foodie. He wouldn't have told me to go somewhere that he didn't think would be a good connection for me.
Typically, hotel restaurants, from my understanding, are just amenities for the hotel. What Bill always wanted was a restaurant. He was a banker and a businessman at first and traveled around quite a bit. He was one of those people that wanted to stay in hotels. He wanted to eat in nice restaurants. He wanted to make sure that they were treated as separate entities. The restaurant would always have its own private entrance, street level entrance. It didn't feel like a hotel restaurant. A lot of times your typical larger hotels are, even back then, I think things are changing or evolving but you would basically come down to the lobby and in the lobby you would look and there was your restaurant almost connected to it. Bill didn't want that. He wanted to have these separate entrances and make it feel more personal.
There were a couple of smaller hotels here [in Seattle], but typically, to be honest, they were pretty run down. At that point, nobody was really looking to buy them. I think the thing that Bill saw, he was a visionary, and he saw those opportunities with those small boutique-y hotels. Honestly, like I said, when I was looking for work it wasn't that I was going to look to go work at a hotel. Honestly, it probably would have been the last place because it wasn't really something that I really wanted to do at that level.
The thing that Kimpton always talks about is ownership and entrepreneurship. That was the thing for me that I think was really, that attracted me to the company and has kept me there so long is that, honestly, Kimpton manages it. We have different investors, but I feel like it's my restaurant. If you were to come to Seattle and talk to anybody, they would all think that it's my restaurant. That's how the perception has been from a business standpoint. I think that's been part of the reason why the business has been successful and why we're the chef-driven company here. That's what we believe that people want to see.
It was the chef-driven vision. A lot of times, in hotel restaurants, you wouldn't even know who the chef was or who the manager was. Not only having the chef-driven [concept] but we really talk about personalized service. We've always talked about that. Also, not being pretentious. That's really important. That's something that I always have imparted as far as with the servers and so forth.
I think the key to success early on was Kimpton really focused on the hotel as a hotel and that they really focused on the restaurant as a restaurant. We knew that there was opportunity, obviously, with the guests that are staying in the hotel, that they're going to come in and eat. I always felt like you cannot take advantage of that. Don't think that's an automatic that you have a 100-room hotel and you have a hundred rooms full, you're going to get all those people in your restaurant. That's not the case. You have to be out there, reaching out and connecting with the guests. In some cases, I go out to the lobby of the hotel every day and say hi to people once in a while just to connect. I think that's important. You have that loyalty.
Leondakis: I joined Kimpton in 1993 and I started in the restaurant group. I ultimately became senior vice president of the restaurant division where I was in charge of concept development and operations for all of Kimpton restaurants for a number of years. Then, when Bill Kimpton passed away in 2001, I assumed responsibility for the hotels as well as the restaurants. I was asked by the president of the company, a guy named Tom LaTour, who asked me to take over running of the hotel division as well. In 2001, I took over running the hotel group as well as the restaurant group. I ultimately became president and COO for Kimpton until 2012 when I left to join Commune Hotels as CEO from 2012 to 2016.
For all the years I ran Kimpton restaurants, it was an interesting way of handling restaurants. Bill was a pioneer in the industry in that regard where he didn't see restaurants as food and beverage outlets, as most people call them we didn't use the terminology outlets, they were restaurants or bars, and they were not run by hotel people, they were run by restaurant and bar people. I was the first person in food and beverage in the restaurant group for Kimpton who had actually worked in hotels before. The reason is he didn't believe in hiring hotel people to run food and beverage; he didn't think we'd do a very good job of it. That's because in the 1980s, in our industry, they didn't. The restaurants and lounges in hotels, in that era, outside of what Schrager did and Bill did, they were largely vanilla. Trying to be all things to all people, overpriced, underwhelming, just hotel F&B outlets.
I had this Ritz-Carlton background, and the reason [Bill] hired me is because he had acquired some more upscale hotels in San Francisco, a couple of them, including the Sir Francis Drake Hotel, which was a full-service hotel that needed room service and had banquet operations, and what was the Monaco in San Francisco, now The Marker Hotel. Both of them required a more comprehensive food-and-beverage program, so I got hired specifically for my background in understanding how food and beverage relates to hotels.
I happily fit into this organization of restaurateurs that were entrepreneurs and independent. Unlike most hotel companies, almost all, I didn't report into the hotel division. Our restaurant general managers didn't report, at the time at Kimpton, to the hotel's general managers. It acted almost like a separate company. We had separate financial statements.
That was Bill's way of making sure the restaurants were viable businesses from a profit/loss standpoint, but also that they were operated more entrepreneurially, targeting the local community as opposed to the hotel customer, believing that if the local community was coming to the restaurant and it was busy with locals, the hotel guests would want to be there. It worked, and that was true.
When I started with Ritz-Carlton there were four hotels, and when I left there were 40. I was there for a period of great growth; this was pre-Marriott acquisition. It was a fantastic experience for me because I learned all about the luxury side of service, and fine dining, and food and wine. I really cut my leadership teeth on how to work with Michelin-star chefs and learning how to manage extreme talent. That was really beneficial from a developmental standpoint, and in those early years, I think I got one of the best educations on hospitality and customer service and creating culture, and how culture can drive the guest experience. The employment culture can really drive the guest experience in a pretty powerful way. I gained a lot in those years working with Horst [Schulze, founder of The Ritz-Carlton Hotels].
A big difference from Ritz-Carlton to Kimpton was that in those years when Ritz-Carlton was growing, everything was really brand standard. There was the Ritz-Carlton way. That's been relaxed a lot these days, but at the time it was this is how we do things. Everything was a brand standard. Everything had to be approved at the corporate level and was very much centrally controlled in terms of how the brand was represented.
When I got to Kimpton, it was completely opposite. Each hotel was its own brand; there was no central brand. The hotels weren't branded as Kimpton at all, they were just a collection of hotels that were brands of one. It was a very entrepreneurial company at Kimpton, the spirit of just do the right things for your employees and guests and make money. It was really entrepreneurial. I found myself at first going "oh my gosh, where are the guidelines? How do I know whether I'm making the right decisions or not?" There weren't standard operation procedures for anything, and there weren't real boundaries. In a way it was great for me because it was so opposite what I experienced at Ritz-Carlton, I really learned to develop a much more creative and entrepreneurial mindset to conception and positioning each individual business within its market uniquely rather than relying on a brand to do all the work.
I was making independent business decisions for each situation at hand, which really serves each of the hotel owners quite effectively. Bill Kimpton had an attitude that, and he wasn't wrong, that a lot of management companies made a lot of money off the backs of hotel owners, and he didn't want to be that way. He wanted his investors to, as they should be, make the most money on the hotels they were invested in more than the management companies. He was very focused on us not building a brand on the backs of the investors. We never really branded the hotels until after he passed away. We got a lot of feedback from our customers that they liked the hotels, but they couldn't find other ones in the collection very easily and we realized we were missing a cross-marketing opportunity. I think the biggest difference was the entrepreneurial spirit at Kimpton, if I had to boil it down to one thing.
Bill really didn't like anything that's sort of a corporate standardization. He hated anything that would make people feel uptight or uncomfortable. He didn't want our restaurant managers, our general managers of our restaurants, in suits and ties. In the early '90s, people were wearing suits and ties. In the hotel business, people came to work every day in a suit and a tie, and he didn't want that. He wanted our restaurant general managers to look relaxed, and comfortable, and approachable. He wanted to restaurants not to feel like hotel restaurants.
We were opening the Grand Café at the Hotel Monaco, and I hired this general manager from another one of the big-chain hotels. He was a food-and-beverage director at one of the big-chain hotels, and I hired him with that background because we needed someone who understood the banqueting and room service component and how that inter-played with the restaurant. This restaurant was really important to Bill, this hotel was too, near and dear to his heart. We went to Paris, to this famous French brasserie, that we modeled the restaurant after. It was really important to Bill that it felt like an authentic French brasserie. I'll never forget one day shortly after we opened, he came into the restaurant and the manager was wearing a suit and tie. He went into the back and he asked the chef for a pair of scissors. He came back out and he took the necktie and he cut it off, he just clipped it right below the knot. He said "I never want to see you in a necktie in this restaurant again."
Lawson: We also had this really cool unique factor of our restaurants. Bill [Kimpton] was really the first person to make sure that he wanted hotel managers to run hotels and restaurant managers to run restaurants. At the time, the general manager of a hotel at our competitor's also oversaw the restaurant. There's nothing wrong with that, it's just that those restaurants felt like hotel restaurants. We had truly the hottest, most popular restaurant in San Francisco at the time because they were really run by top restaurant people who were out to offer a unique restaurant experience, just like we were out to offer a unique hotel experience. We were really bringing something to the market that didn't exist.
DeFrino: Bill Kimpton was also very committed to making sure that the restaurants were uniquely programmed and uniquely conceptualized for their market. We were in Seattle, he made sure that all the wines in the restaurants were Pacific Northwest wines. If it was an Italian concept, he made sure that he brought in the top Italian chef from maybe Napa Valley or from wherever he was drawing from.
He was very concerned with that creation of that experience. It was very intimate for Bill and the legacy we're trying to protect today is that each one of our properties continues to have that nature. Each one of them is individually crafted. Each restaurant is individually conceptualized. No two designs are the same, no two restaurants are the same.
An Outsider's Perspective on the Growing Boutique Movement in the U.S.
Sendlinger: In the '80s, I had a small travel business agency selling tickets to American soldiers stationed in Germany. On the side, I was also in the events business organizing incentives and events for companies, and I had my own event company. I was also organizing snowboard tours and combining that with concert trips into house music.
I was always fascinated by youth culture and its influence on fashion, music, art, and pop culture. Seeing the DJs mixing vinyl in the '80s during the beginning of house techno, my prediction was that DJs would be the rock stars of the 21st century.
I was close to these guys, but there was one industry event in 1990 hosted at The Paramount in New York, which was owned by Ian Schrager and Steve Rubell, and designed by Philippe Starck. By bringing all these DJs into this space, everything began to spread like wildfire, and everybody was talking about it, like, "Wow, this new hotel was so cool and affordable with a complete lobby scene and great bar."
The media was another thing. When the Paramount Hotel opened, there were all these pictures in every single magazine around the world.
So, as these DJs and opinion leaders were traveling around the world and talking about these hotels, I was booking travel for them, and they were asking for similar hotels in London and Paris, and they wanted to know, "What do you have in Cologne and Munich and Zurich and so forth?"
So it almost immediately clicked for me, and I had no idea what our business model was going to be, but I knew there was something bigger happening. That was when we saw there was a new movement among hoteliers who inherited businesses from their parents. They were rethinking design and going in this new direction, so what already happened before the opening of The Royalton and Morgans.
My partner in California was a friend of Bill Kimpton so one of the founding hotel members of Design Hotels was the Triton Hotel on Grand Avenue in San Francisco, which is no longer affiliated with Kimpton. And then Chip Conley started Joie de Vivre, and so in the Bay Area, there were lots of interesting small little hotels coming up. And then parallel to that, Chris Blackwell started to invest in South Beach Miami, so it was really between Schrager in New York, Kimpton and Conley in San Francisco, and Blackwell in Miami.
This was so unique in the States, for us, because it was driven by small chains, whereas in Europe, most of the interesting hotels were privately owned and managed, and they weren't as cool and revolutionary in their design, which Schrager and Starck brought to a completely new level.
It was the beginning of the '90s when the first hotels in Europe were subscribing to a very strong design message as well. The hotels were much smaller, like 40 or 50 rooms. I think the Claris Hotel in Barcelona was one of our founding members. It was little bit bigger with 120 rooms, but very edgy in its approach. And then after the 1992 Olympics in Barcelona, Barcelona was recognized as a design city. The design that was applied to the Claris was about new kinds of materials and fabrics and style and it was subtler than what Starck was doing in New York, but appealed to the same target group.
That's when we started with 20 hotels in 1993 as Design Hotels with a business model of becoming a distribution partner for the hotel, connecting them with our own GDS [global distribution system] codes.
My partner [in Design Hotels] had an incoming business in America, and my travel business was based in Germany near Munich. As part of our event and tour operator business, we specialized in sport and ski tours. My partner in California was a phenomenal skier and expert as an incoming tour operator for American ski destinations. So we founded the company [Design Hotels] in Sausalito, Calif., but I was living between San Francisco and Germany and going back every month.
Boutique-Style Service Emerges
Walshe: I can still recall the first time that I came to New York and stayed in one of Ian [Schrager's] hotels and it was at the Royalton sometime in the early '90s. I'd never experienced anything like it, despite having been in the hospitality industry my whole life. At that time, I was working for Kempinski where their hotels, irrespective of the size, were of a more traditional view.
To find myself in an environment where there was so much attention to detail in capturing the relevance of the experience to the time that the experience was happening in, I found kind of shockingly brilliant, if I can call it that. I came to realize that, in many respects, luxury hotel keeping, up to that point had been steeped in historical influences. You would find it you went to a European luxury hotel, for example; the staff would dress like butlers from the 1800s and it was a very subservient, conservative approach to service.
Suddenly, what Ian was doing in New York was 100-percent connected to the modernity of that time. That was reflected through the choice of the staff who worked there, the uniforms that they wore, and the accessibility of food-and-beverage spaces, having open kitchens for the first time. Hugely casual, but genuinely casual interactions with people who worked in the hotel whether it was people behind reception or service in a restaurant.
I think what struck me coming out of Europe and encountering this new boutique phenomenon in New York for the first time was the fact that casual in terms of approach didn't mean you weren't being serious about hotel keeping. That deliberate lack of formality in the interaction between the hotel and its guests, was really something quite profound and had a very significant influence on me.
I remember coming back [to Europe] and talking about that first day in the Royalton, and having had, and I still actually talk about it today, one of the best service experiences, because I'd also heard that ... You know the hotel business can be quite snobby. That people who weren't in this sort of boutique genre were being somewhat dismissive of it and saying, "Look, here's this nightclub operator who thinks he can run a hotel and he's staffing it with supermodels and beautiful people, and they've no idea what they're doing." Actually, my expectations were pretty ... I had high expectations for vibe and for design. Actually I had pretty low expectations from the service perspective when I checked in.
I remember checking in at The Royalton on that first day, and the person who checked me in was incredibly interactive and engaging. She was chattier than I'm used to at that stage in hotels. She said to me, "Where have you flown from?" I said, "I've just flown in from London." She said, "I see you're carrying a laptop bag. Do you have a computer with you?" I said, "Yes, I do." She said, "Well, I know that the power supply is different here in the U.S. than it is in the UK." She handed me an adapter for a UK power plug to a U.S. power plug. That was the first time, and I was traveling like 150 to 200 days a year at that stage, and that was the first time anybody had ever been that proactive with me during a check-in process to make my stay easier. I was utterly blown away.
I felt so guilty that my expectations of service were so low because I thought that all they were doing in this boutique genre was concentrating on design and aesthetic and I realized that they were putting as much effort into the personalization of service and being proactive. One of the thoughts that I took away from me that I then tried to take back to my own hotels was this kind of old service adage of don't speak unless you're spoken to being completely wrong. That people in the modern era increasingly wanted a service interaction with staff members whereby the staff member would create the conversation. Who would engage proactively with the guests, not wait to be engaged with. It was really quite refreshing.
Conley: I think the idea of culture, the idea that ... we called from the very start, 30 years ago, I called our front desk clerks at our hotel "hosts." The fact that I'm at Airbnb [where people renting out their homes are called "hosts"] now is sort of an interesting irony.
Ultimately, the industry sort of went to "associates," from employees to associates and front desk clerks to front desk associates and then over time associates sounded way too innocuous and bland. They realized, "OK, we need to come up with something else." Now, high-end hotels call all of their people hosts at the front desk.
I mean, 30 years ago, I was calling our front desk clerks hosts because why would you call someone who's on the front desk of a hotel a clerk? What you call someone in many ways defines what you think about them and so I think the idea that we're a little more intentional and conscious about helping employees feel that the work that they're doing is very noble and important and that therefore they are treated well was core to what Joie de Vivre was about as well.
The basic premise of the industry when I joined was the customer comes first and I pretty much took a page out of Herb Kelleher's book, one of the founders and CEO of Southwest Airlines and I said, "The customer doesn't come first. Actually, the employee comes first." The employee comes first because, in fact, if the employee has a great experience, the customer will be well served. Frankly, if the customer is well served, the investors are well served and that to me was the proper sequencing instead of saying, "OK, it's the customer that comes first."
Pinetti: Our mission for the company [Kimpton] is to be best-loved hospitality company on the planet earth. If your No. 1 way of selling and marketing is to make sure that a guest is so happy that they're going to come back and tell everybody, then my employees and the frontline they need to be fully empowered. Empowerment was a major, major part of our success right from the very beginning.
We would hire good people and smart people and we would let them do their thing. We would let them be in the moment with the employee. Even still today, I got some of my regular guests or even new-time guests and they're like, "You know, when I'm in one of your hotels, I can never, I never know who the managers are, because everybody can do anything at any time."
Nobody says, "Call housekeeping for a pillow." Nobody says, "I got to check with my manager." A major part was being focused on the experience for those initial guests and making sure that our employees new that they did not have to ask anybody permission or get approval that we hired them and we trained them and we let them go and that was a huge, huge success.
Even today, people will maybe copy our style and our design, but the thing that they can't copy is the ethos that exists when you're in a Kimpton hotel, because it's a heart and soul kind of an environment. The people love that.
Our spirit and our culture, that's the only thing that's the same in every one of our hotels. The rest, you don't know if you're going to be in 150-year-old Washington Monaco, the oldest building in the country, or you might be at the Argonaut in San Francisco, or you might be in one of our other historical buildings. They're all different but the experience, that's what we had in common. That's why you're hopefully talking to me and nobody else for this interview.
The sales guys and the marketing guys will see that we have competition but in the role that I have with this company which is to keep the spirits of the employees strong to make sure that they understand that the experience we provide every day on a personal and heartfelt level is what separates us.
I believe that we don't really have any competition. I believe that our competition is really ourselves. People can copy our hotels and they can copy our restaurants, but most all of the other brands out there, boutique or big brand box, they don't empower their employees. They are not in the business of providing genuine connections, they're not going to use the word connecting with emotional core.
They're coming from their heads, and we come from our hearts, and that is the one thing whether we got 2,000 competitors so to speak that say they're a boutique or lifestyle property, or they copy us until the end of time. They're not going to copy the heart and soul that we have which is really truly what differentiates us.
The fact that we had all those other people because it was cool. Even when Ace came out, they would always compare us against Ace. Well, the guy or gal that doesn't want to stay in a big box, that wants to go to an Ace or a W is very different from a guy or gal that wants to stay in a Kimpton. The more they separated what those other boutiques were compared to us, they were doing us a huge service in keeping us fresh in the minds of the traveler.
Lawson: I realized that this design of the property could be very unique. Now you see that all the time but back in the late '80s and early '90s, hotels always kind of felt like hotels.
Kimpton really had this high design. The different hotels that we had really had a different look and feel and it really was the first time where it almost just kind of psychological and emotional connection that Bill [Kimpton] was having with all of us as employees and really kind of coming out and he was always in the hotels and always talking to all of us. Always getting feedback from us on how things were going and what could we do better. We really had that spirit of a family and we were here to not just work, but to enjoy what we were doing. That really inspired that we were ourselves. All of the diversity that each one of us had as a Kimpton employee was something that he really applauded.
That really was different in the sense that a lot of our competitors at the time had very strict scripts in terms of how you interacted with customers. We did not, and still do not have that. It was really about looking at someone that talked from the front desk. Really just being smart and relating to people as human beings and getting a sense for what they were looking for, and really making sure it was an authentic experience that made people feel like we were approachable. That we were really out to understand what it is they needed from their day or their business meeting that they were having with us. It was very unique from being small hotels that were high design oriented but also this really focus on an emotional connection with each other as team members and our guests.
DeFrino: There's a level of formality, I think, that's expected at the big sort of traditional luxury brands all over the world. There's an expectation that there's sort of that white-glove experience. They deliver that very well and that's what they're known for. That's their wheelhouse.
For a boutique hotel, whether it's Kimpton or other brands, I think you see a level of relaxed service. Not necessarily less efficient or less professional but simply more relaxed, much less scripted and much more tailored I think to the individual needs of guests. Often times there are at least traditionally the boutique hotels are a little bit smaller. You have in some cases fewer guests to serve so you have the ability to make greater connections. That was what I noticed sort of immediately when I entered the deep fray was there was actually an opportunity for a greater level of connection between the hotel, its employees and the guests.
Also, I think the guests are different. Frankly, I think guests who choose to stay in boutique hotels versus traditionally branded hotels are. I think the customers who choose the boutique experience are choosing that consciously. I don't think they just fall upon us. I think they're making a decision to stay with our type of hotel versus maybe a big branded hotel or maybe a traditional luxury hotel or and now more and more they're choosing between the boutique operators because they're looking for a certain experience that fits their lifestyle. The boutique traveler has a different mindset and maybe a little bit of a different personality than the traditional travelers of days past.
Depatie: As you get all the way to where we are today, I think this idea of one-size-fits-all brand approach is really being rejected everywhere. People want more human brands. They want more brands that speak more personally to them. They feel more authentic, more genuine.
The big thing that we got rid of at Kimpton, we threw away the standards manual and everything. We had ideas of what general quality level you had to have. Generally, we had a standard about how people had to feel after they were at a Kimpton hotel, but we didn't tell people what to say. We didn't craft ... We empowered them to be who they were and that naturally connected with people and put people on a much more personal, relational state where they're in a very transactional, cold, removed state when they're traveling and often quite scared of what they were facing or where they are, or they're away from home, whatever. We were, at Kimpton, trying to take all that out of the equation. I think that's why we connected with people.
I think if you look at the up and coming brands right now, they're trying to be more human. They're trying to be more real. They're trying to be more genuine. They're trying to be more crafted. They're trying to be more boutique, bespoke, personalized. Now technology, oddly enough, is allowing more and more brands to actually personalize. You go to whatever your online thing is, it knows you. You expect it to know you.
Now technology is enabling this because, actually, technology was making everything more impersonal, and so we're trying to get back to it. Certainly where you sleep and where you eat when you're away from home, it's a very personal thing. If we can help make that less scary, more welcoming, more comfortable, more embracing, more fulfilling, all those things, that's what we're trying to do. I think it definitely worked at Kimpton. People coming up today are trying to look like that. They're trying to be like that, but authenticity is a hard thing to fake, so I think it's hard.
Schrager: You know what's funny, because everybody now that is working in the lifestyle space came to us. They have all worked for me and Steve [Rubell] at one time or another because when we started, it was the beginning.
I always found, when we did nightclubs, and then when we did the lifestyle hotels, that young people gravitate to something that they think is special because they want to be a part of it. So, everyone that I run into has worked for me one time or another. I have a lot of people that worked for me for a very long time. I have Michael Overington, who's my partner; he started out as a busboy for me at Studio 54.
The good ones. I have a bunch of other people that have been with me for a long time. So I have so many fond memories, like family. They're all like family to me.
Conley: I can't say that there was particularly any singular person or company that was a nemesis. I mean, Kimpton was clearly the company that we prided ourselves on trying to emulate and to surpass. In fact, when we were selected by the city of San Francisco to build the Hotel Vitale on city land across the street from the Ferry Building on Embarcadero … in 1997, we competed against Kimpton to actually win the right to take this land and endure four years of the entitlements process.
When we actually beat Kimpton we were 10 years-old as a company and we were the little guy. They were the Goliath and we were the David, but that was the moment that just said, "OK, the city of San Francisco has selected Joie de Vivre to do a 65-year lease on this piece of land to create what will be an upscale, maybe luxury hotel when in fact the roots of this company were an entire 1950's motel in the Tenderloin."
That was sort of a moment where Kimpton really woke up and said, "OK, these guys are going to be our primary competitors."
Schrager's Take on Boutique Design, With the Help of David Rockwell and Philippe Starck
Gerber: It was really incredible what they [David Rockwell and Philippe Starck] did, at that time they were still both visionaries, they collaborated together. The things that they came up with and the design that they came up with while it was very simple, it was basically a box with wood walls. Philippe had these basically metal garbage panels that he turned over and those became stools. He had these really cool lighting fixtures that he had designed and David really collaborated as the more local architect to coordinate with Philippe, because Philippe was over in Europe. It was a great experience, it was a very, very simple design that was really incredibly well received.
It was a different kind of thing. The room sizes of this hotel [The Paramount, Schrager's third boutique hotel] were very, very tiny, but Ian and Philippe were so creative in how they designed the rooms, that it really just worked. I think it was a great alternative; first of all boutique hotels very often were much smaller but it was really more about the environment. Let's say you'd never been to New York before. You were going to the Paramount hotel and you'd see, even though your room was small, you didn't really care because you had this incredible downstairs and you had a great restaurant and that's what you were going to the hotel for.
The Increasing Importance of Boutique Design
George Yabu, co-founder of Toronto-based Yabu Pushelberg group, whose early client list in the 1980s included Club Monaco, and later, Ian Schrager's EDITION and PUBLIC hotel brands: It was interesting about the early Club Monacos. We had juice bars in them, and all these points of animation, because we wanted to try to tell stories. So we would do things like a beach club-style experience with a riff on St. Tropez and the Mediterranean. We would do all these storefronts with different beach scenes, murals, and lifeguard stands, and sandcastles of casinos in Monte Carlo. It was just an imaginary connection to Mediterranean beach country. It's kind of interesting at that early, early, early period that we were thinking about conceptual experiences for the shops. I think that was really kind of a precursor to the boutique hotel evolution, and the experience, and this idea that hotels could tell stories through their design.
Glenn Pushelberg, co-founder of Yabu Pushelberg: We always thought in terms of experience and attitude and ambience, and how it changed during the time of day. You're building a construct of design based on scale and proportion and color, lighting, materiality, and focusing on mood and emotion, and emotional context. Because it goes back to people's aspirational lifestyle. It's a feeling. And I think the better shops have always done that, but at the time back in the late '80s and early '90s, this was a revolution for hotels.
When the boutique hotels first started showing up, it was all about design, and the more design you put into them, the more people were drawn to them. It didn't go much deeper than that. Then there came a point where the customer said, "OK, this is way too much."
So that kind of turned into a much more thoughtful process of design where hotels started thinking of the lobby as a social gathering spot, so there was more thought about who it was you were trying to attract, and the traffic you wanted to create. That was when you started seeing a shift toward thinking about the guest as a pivotal part of the design process.
Sendlinger: [In the early days of Design Hotels in the early '90s], I was going to the shows and talking to the hoteliers and familiarizing myself with hotel industry worked. I saw that no one was taking design-forward hotels seriously. It was just all these guys in suits and bland hotels. They were not taking design seriously. They never looked at pop culture or youth culture, and everyone told us you will never succeed having a hotel group that was vertical. You know, you need to have five stars and four stars and three stars, and I always said, "Look at the consumer today, they spend $15,000 on a watch and $7,000 on a bag, but they wear T-shirts from H&M's design division where they work with Stella McCarthy and [Karl] Lagerfeld."
And it was around the same time when Steve Jobs got back into power at Apple, and when he launched the first iMac. And I was telling everyone that design was going to become such an integral part of every successful brand. You cannot deny it, so it's just going to happen. Design is going to be more and more important in the creation of hotels. There was no reason to create ugly hotels. When you looked at the Courtyards and Holiday Inns and Hiltons and whatever they were building in the '80s, it was just like brown boxes with zero appeal, just to grow fast to meet the demand all around the world.
Chapter Three: Boutique Enters the Mainstream, and Two New Pioneers Emerge
As Kimpton, Conley, and Schrager began to expand their respective boutique hotel businesses, two other outsiders entered the space. And just like the pioneers who came before them, their respective styles and approaches originated, in some part, from the fact that they were situated on two separate coasts.
On the East Coast, in New York, you had a young upstart named Barry Sternlicht of Starwood Hotels, who was contemplating launching his passion project, which would eventually become W Hotels. And on the West Coast, in Seattle, there was Alex Calderwood, the co-founder of Rudy's Barbershops, who would eventually debut Ace Hotels.
Starwood Hotels & Resorts was borne out of Starwood Capital Partners, a Chicago-based real estate company headed by Sternlicht in 1991. In 1995, it acquired Hotel Investors Trust and Hotel Investors Corporation, a "paired-share REIT" (real estate investment trust) that allowed Starwood to buy up a slew of properties: more than 60 by 1996. It eventually became Starwood Lodging in 1996 and in 1999, the company changed from a REIT to a corporation.
Gerber: When Barry [Sternlicht] was the chairman of the Starwood Hotels, he wanted to start a boutique hotel brand. They owned at the time, Sheraton, Four Points, Westin, and St. Regis, and so Barry wanted to create a boutique hotel brand. He felt like the quickest and easiest way to do that would be to buy an existing hotel company. The only person, or the best in class at that point, was Ian [Schrager]. They started a conversation where Starwood Hotels was going to try and buy Ian Schrager's hotels.
Basically, [Sternlicht did this] because Barry had bought all these properties that he wanted to renovate and rebrand into this boutique hotel company. He felt like the quickest way to do it would be to buy Ian's company because Ian had the genius to do it already and he could go and do it quickly. Similar to what Marriott ended up doing with Ian for EDITION.
That's how the conversation started, basically. Barry said to Ian: "How do I do this?" Ian said, "You hire me, you hire the Gerbers to do the bars, and you hire some great designers and architects, and we just go."
That conversation was going on for months and months and months and, I'm not privy to the reasons that it didn't ultimately happen, but it ultimately didn't happen.
Barry came to us and said, "Look, I like you guys, I'm going to do this on my own now. Will you join me?" Rande [Scott Gerber's brother and business partner] and I made a decision to partner up with Starwood Hotels to develop the W Hotels brand and then ended up not being partners with Ian [anymore].
Ian is a very, very creative person but he's also very controlling, so we got along well enough, but when we had the opportunity to partner up with Starwood, Starwood bought an interest in our existing business and they gave us a going forward commitment to do three properties a year for the next five years.
The opportunity was just huge and we were also being given a lot more freedom because Starwood really didn't know how to do this and so they basically were turning to us to do it. As opposed to with Ian, Ian knew how to do it and he had a lot of opinions on what we should do and what we shouldn't do. We thought it was the right opportunity in our career at that point to partner up with Starwood and develop W Hotels.
Petrone: I think Barry's a brilliant visionary and he's just a smart guy and remember this was way back when ... He was at Starwood Capital and it was a small little REIT [real estate investment trust] in Arizona when it bought ITT Sheraton.
We all know Starwood is huge now, but Barry outbid Hilton hotels to buy Sheraton, Westin and all the other brands, so he was a very smart man. Not only on the financial side and on the business side, but also on the creative side because the credit should be given.
He is the one that came up with the W brand. I felt lucky to work on that team. I felt very fortunate. I felt like I learned a lot. I feel like I contributed my part. I did feel like we had a solid team. I was head of operations, Diane Briskin was head of sales and marketing.
Amar Lalvani, former global head of W Hotels development, now managing partner and CEO at Standard International, which runs Standard Hotels and Bunkhouse hotels: I started in the hospitality industry around 1996. I came into the business with this movement that had started and my first job with the industry was at Starwood Capital. That was right out of college.
I guess our role in what happened here was watching some of the pioneers of the business which, including people like Ian Schrager and people like that, and looking at it from more of an institutional perspective, whether that's good or bad. People have different views on that but we saw what they were doing and it was clearly something that was compelling and interesting that we liked personally.
I remember going to The Paramount Hotel for the first time. I guess it was probably 1995 or 1996. I couldn't believe what it was. It was just something that was so different and fascinating and felt like nothing I'd ever seen before and Barry [Sternlicht] was looking at that, that I'd seen that, and it was really his vision to create W.
I was involved in the early days of that happening and what we really did is turn some of the principles of what those pioneers did and turned it in to something that actually democratized in a way from the sense of wow we saw from the first Paramount hotel and some of those other early boutique hotels. There wasn't a lot of comfort to them; it was very cold and very hard and very beautiful. There wasn't a lot of light to them. There were working spaces in the roots and what we tried to do with W was take those principles and make them conducive to comfort and usability and turn it into, really for the first time, a global brand.
It was really interesting [at the time]. We didn't really know what was going to happen or what we were doing and I don't know if people know this story but there's all kinds of inspiration of why it was called W. Whether it was warm, witty, whimsical, all those words, some might say that's why it was. Some might say Barry's wife came up with it but I remember being there and one of the reasons was, in case it failed, you could always make it a "Westin." [laughter]
Petrone: There was one person between me and Barry. Guy Hensley was the brand manager, and he was my boss. Guy reported directly to Barry. I worked closely with K.C. Kavanagh, so I do know K.C. quite well. She was in public relations at the time at Starwood, when I was there.
It was kind of like a black box, like the Skunk Works. We were kind of like our own little brand and I have to give credit to Barry because he wanted to make sure that we weren't homogenized by the other brands.
Lalvani: It did take off immediately. People were really inspired by it. People who had not been to places like the Standard or places like The Paramount or places like The Royalton actually went there and said, "Wow this is really interesting." Because it did have great design, it did have great food, it had all those things. I think it worked. I think it worked almost immediately so we never had to revert to "oh let's just make it a Westin."
It took off immediately but I think it was definitely a tribute to Barry [Sternlicht] who had conviction about it and you were within an infrastructure of the hotel business that didn't understand it and to his credit, he totally carved it off and people like I were there. People like Brad Wilson, who now runs Ace Hotels. He was there and ran operations. We had an office in the city versus Starwood HQ which was upstate at the time when it moved to White Plains, N.Y.
He really took personal responsibility, hired people, that made sense, incubated it within its own four walls, kept the operations, the design, kept everything away from the infrastructure, and I think that was absolutely critical to have that autonomy and creativity. It would be very difficult to run a creative brand out of White Plains.
Setting up in the city and having that [separation], I think, was a very smart move. The other thing he did was very smart which he said we're not going to go out and talk to third-party owners and developers and sort of have that asset-light model without proving it ourselves. At that time, it was really about taking buildings.
Petrone: I'm guessing I was asked to join the brand because of the relationships I had developed and possibly because of all the different roles I had leading up to that point. I had already managed different types of hotels. I had managed, I had been hotel manager at a Ritz-Carlton that we converted to a Luxury Collection hotel, so I knew the luxury market well because I had been managing hotels like that including working at Mauna Lani on the Big Island of Hawaii, which Condé Nast had called one of the top 20 resorts in the world, at the time.
I had a lot of good field experience that worked. I worked in L.A. I had worked in corporate Starwood on pretty much all the brands, primarily Sheraton. I had established relationships with Ted Darnall, who was the president of Starwood. He was also a key member of Barry's upper echelon of the key management team.
I was good at operations. One of the key responsibilities I had was to establish the brand standards. What would W want to stand for because although each hotel was unique and indigenous to each environment, we did want to have consistent service and there were certain standards that we wanted to be consistent with. I also lived in Manhattan, I also embodied the W customer.
I was that demographic. I was ... That would have been 20 years ago, I'm 55 now, so I was 35 years old, and I had a lot of experience in hotels. I had lived all over the world at that time. I had lived in Moscow. I spent five years in Germany. I spoke three languages. I was living in Manhattan. I knew the foodies and a little of the fashion. That world was my world. That was sort of my tribe.
I think that helped as well. I was comfortable in that culture. I think ... Perhaps the reputation I was able to build and establish by the time they were looking for, to build a team. I was asked to join the team.
1998: Barry Sternlicht opens the very first W hotel in New York City
Kavanagh: I started at Starwood in September of 1998 as a vice president of public relations and I was brought on primarily to help launch and promote Starwood Preferred Guest (Starwood's loyalty program), which was still in its development phase, which would then launch in February of 1999.
Pretty quickly I started working on various brand work, including W. As you probably know, the first W opened in November of 1998 which was a few months after I got to Starwood. It was actually pretty funny, it was kind of like Apple because there was this tiny team that was hidden in a corner that was working on this project for Barry Sternlicht; it was Barry's passion project.
No one in the company knew a lot about what they were doing just that Barry had this idea for a new kind of hotel brand. I didn't even know where it was going to be located and I think most of us at Starwood found out about W by reading about the new brand in The New York Times shortly before it opened. There was no communication internally, there was no fanfare, internally, it was just like little secret groups off in a corner that was developing this brand that would become such a breakthrough. It was sort of funny to think about that in retrospect.
The W on Lex and 49th, our first W, the W in New York, when it opened … I'm trying to think of a good analogy … it was almost like opening a high-end designer store or an event during fashion week. It was not like a traditional hotel opening with the big giant scissor where you cut the ribbon. It wasn't like a traditional hotel opening where you had four guys in suits with a big scissor cutting a ribbon.
This was a huge party; tons of celebrities, tons of notables, tons of trendsetters, and it was covered not in the travel pages, but in the style section. As a result, there were literally lines around the block to come into the hotel in the first few weeks and I think within a month or two we had to replace the floor in the lobby because there had been so much wear and tear and we thought that was a pretty good problem to have.
We quickly associated W with music and with fashion and we put so many of our marketing dollars towards opening events which was a very different thing in those days, now that's kind of commonplace to have a big, sparkly flood studded opening event but in those days you just didn't do that with hotels. Again, they were really staid affairs with four guys in suits, with a bottle of champagne.
Petrone: My first experience with boutique hotels was with the launch of the W Hotels, and I was one of the original team members on that brand. I was part of a small core team that helped establish the brand and I think there were only a couple of concept hotels that were being opened, when I joined. I had already been with Starwood some years and I was at the head of the operation, so a big part of my role was helping establish the brand with the team.
Very much, the visionary behind that was brand was Barry Sternlicht. Much of the credit belongs to him in terms on what their brand stood for and he was good in making sure that our brand was separate from other Starwood brands.
We wanted to be different. We wanted to be fashionable. We wanted to provide a great guest experience, but in a little more of a hipper, more boutique type lifestyle environment. We thought those two worlds were not mutually exclusive. There were a few boutique hotels out at the time, this was in the late '90s, when we launched the W.
Although, Ian Schrager had a couple of hotels already out, I believe he had 10 or 11 hotels out at the time and there might have been a couple more boutique "lifestyle hotels" out there. There weren't many. There certainly weren't many with the big brands. Marriott didn't have any, Hilton didn't have any. Starwood, I believe, was one of the first to launch a lifestyle boutique brand from the big brands.
It took off like a rocket. It was successful right from the get go and our target demographic ended up being much larger than what we anticipated. We had thought it would be ages 25 to 45 and actually, what we found is, once we opened, all the suits, people that were even older than 45, 55, 65, all the suits that had previously been over at the Bull and Bear, the famous bar, at the Waldorf Astoria, were coming over to the original W. I think what we found is that human beings wanted to be around that vibe, that environment.
Lalvani: I was tangentially involved in the first W. Barry really took a passion for that and handed that out. David Rockwell did the first W which was on 49th and Lexington. He has a great design eye but, you kind of chuckle looking back on it because I think Pottery Barn was the inspiration for that. Having said that, that's the democratic nature of what I'm talking about.
Barry would be the first one to admit to that he looked at what Ian Schrager and André Balazs were doing and to bring it into a level of comfort and to a level of democratization. I remember there was a lot of Pottery Barn stuff that was the inspiration. It was softer, more feminine. If you look at the difference between something like The Royalton or The Paramount really which was hard and it was nightclub by and it was a lot of steel. I just remember that room was uncomfortable.
When you look at that first W, which was soft and it was Pottery Barn and it was comfortable beds and it was bright and it was airy. The restaurant was called Heartbeat, so it had a health factor. If you look at that original inspiration of the nightclub aspect that I was talking about and look at what we did with the first W, you could see that it was vastly different.
Having said that, it took design, bar, and restaurant seriously. That seriousness of intent of it being a place and more than a hotel, I think, was the common link between the two.
On the other side of the U.S., Alex Calderwood and his close friends and business partners Wade Weigel and Douglas Herrick were getting ready to open their first hotel. Prior to opening the first Ace, the three founders had launched Rudy's Barbershops and owned music/bar venues, among other pursuits.
Wade Weigel, co-founder of Ace Hotels: I really should start out with why the Ace happened. We were doing Rudy's at the time, Rudy's Barbershop. We already had four stores. I used to work with this guy down at the SoDo [South Downtown Seattle] district who — I don't know if he just inherited some money or whatever — he started buying these buildings. He bought this old building. He was a big fan of Rudy's.
He's like, "Hey, would you want to be in this building I did? Will you come down and look at this building and give me some ideas? I love Rudy's."
So I said, "Sure, I'll go down." Went down, toured it, I'm like, "Oh wow. I love this building." Knew it from the '80s and had always wanted to be ... I always thought the spaces were great because it was an old union mission.
I brought Alex [Calderwood, Ace Hotels' co-founder] down, we toured it, and the next day we called him and we told them we wanted the whole building. We had this idea that night of, like, "What would we do with the upstairs?" We're like, "We'll put rooms up there for people to sleep."
Our original idea was that we were going to make it where you went into a Rudy's and checked in, and then you could rent a room at the Ace. We didn't have a name at that time, but you could open a room up in the upstairs. How we justified that was we had several nightclubs that we were bringing in musicians and also I had the Cha Cha Lounge. It was full of musicians. It was just a common thing of "Where we are we putting these musicians up we could actually afford?" You're guaranteeing them, as they come through town, so much at the door and you're paying for their hotel rooms and there was really no place reasonable, or even fun or cool, that you weren't just embarrassed to put them up at some weird, divey hotel. We were creating that space, originally, for those people. Places to put our touring bands in.
That's where the concept came. It wasn't that we wanted to do a hotel. It was we stumbled across a great building that we thought, "Wow. Let's take the upstairs." We weren't looking for a hotel.
1999: Alex Calderwood, along with friends Wade Weigel and Doug Herrick, opens the first Ace Hotel in Seattle
Weigel: We originally opened with 18 rooms and added 10 later on, on another floor. There weren't bathrooms in all the rooms, either. We ran out of money. We originally had wanted to take all the risk, but we couldn't afford to open only but 18.
No [I don't know if we felt like we had the business chops to open a hotel], but we did. At that point in time, neither Alex nor I had houses, cars, kids, any really true expenses. I'm not even sure at that point in time if ... I had three or four stores open at Rudy's before I even quit my job waiting tables. I would do both. I'd work in the daytime at Rudy's and I would go and wait tables at night to make that extra money so I could build a new store. It was an obsession.
We really didn't know it [the hotel] was going to be cool until ... so, we had an opening party and ... I'll step back a little bit. When we built it, what we were trying to do was this ... something what we could afford and what we thought people like Alex and I would want. We wanted really clean, interesting building materials. This was our goal: Do something cheap using inexpensive, interesting materials and done in a minimalistic way and not over-designed, so no fluff. We hated fluff.
We had a huge opening party when we opened and we had invited Tyler Brûlé [now the founder of Monocle], who was editor of Wallpaper Magazine. In 1999, Wallpaper was the style bible. It was the design, style ... It was the shit. He was a big fan of Rudy's. We had invited him out. We also had Kim [Hastreiter] and David [Hershkovits, the co-creators] from Paper Magazine. They came out to our opening party and stayed at the hotel.
We had this huge blow-out party and everybody just freaked out. The locals freaked out on it. The press just ... Paper did a spread. The paper did a spread and then everything just followed. It was all the press that we admired. It was like, "Yes! Wallpaper Magazine?" It never stopped. It was almost like every month we were written about.
Next thing you know we have ... We didn't really think that we created some masterpiece or whatever, but all of a sudden, architects were coming from out of state. All the design school kids were coming. Because they were writing like it was something new. We just knew we were catering to ourselves and we wanted something simple. We just wanted an interesting place that we would want to crash, and I say crash.
W Modernizes the Hotel Lobby Bar
Petrone: We wanted to have fun. Everything played off the letter W. We had the whiskey bars, we partnered with Rande Gerber to do all the whiskey bars. Rande is married to Cindy Crawford and he had a very successful bar business and part of the concept on the W success was that we stayed true to our core confidence, which was the hotels. Then we let other people who had a stronger forte in food and beverage and bars do their thing.
Most of the Ws didn't run their own food and beverage. We partnered with famous chefs and different folks to manage food and beverage.
Rande Gerber was great. He partnered very closely with Barry Sternlicht. His vision was: Build it, they will come. His bars were magnets and he knew, between him and Cindy [Crawford, Gerber's wife], Cindy wasn't as much involved, but ... Rande just knew how to, what it took to have a very cool, fun bar that people would want to ... So all the bars, I think most the bars that we opened back then at the time were all Rande's bars. They would have different names, but they all started with whiskey. Whiskey Blue, Whiskey Gin, Whiskey Bar, but they all had the name whiskey in it. That was part of his brand. He had already had a lot of success before W partnered with him, but I think W helped expand his brand even more.
Gerber: I think when we first started off in the business we were taught by Ian [Schrager] and his door policy at Studio 54 was very elitist and so he felt like, in order to have the right kind of bar, you needed to have that velvet rope and tell however many people weren't getting in. That's kind of a hard thing to do. It wasn't our personality and I'd say we've come a long way from that. Now we want people to come in, people work hard for their money and we appreciate people spending their money with us. We have no door policies or anything like that. I think you also have to learn the business. There was a time back in the early '90s when we opened nobody was walking around with cell phones, so we had a very strict policy on taking pictures. You couldn't take pictures in our places, you couldn't talk about the celebrities that were in them as far as our employees go and we respected people's privacy.
We built our business on that. Celebrities felt comfortable coming to our place and not worrying about reading about themselves on Page Six. It's still our general philosophy but it's a lot harder to control now with social media and everybody having a cellphone. We still make sure that our employees don't talk about guests, we don't go to our public relations companies and talk about a celebrity being in one of our places, unless we have it approved by that celebrity, something that they're OK with. I think there's a lot of that stuff that you have to get used to in the hotel bar environment. Plus, there's some bars that we operate that are union. In those bars you have to treat the employees a little bit differently, there are more rigid guideline and the work rules and stuff like that, but we learn new stuff every day.
Lalvani: We thought that good design and good experience creation didn't just belong in that realm and if those things could matter other people could be brought in a more democratic way. We did have this concept that we called, in the old days, "W inclusive exclusivity."
There was still a feeling that it wasn't really interesting, compelling hot spot so to speak. We did with this, for example, with Rande Gerber. So we did, with Rande and Scott the first Whiskey Blue bars and those kind of things. But it was always very much of being genuine about that but also allowing it to be much more inclusive.
That was obviously we were in a larger hotel company and we launched it from within so we tried to keep the DNA and the spirit of what those boutique hotels were but allowed them to be more open and more democratic.
Aliya Khan, former W Hotels designer from 2003 to 2006, now VP of global design strategies at Marriott International: I think the beauty of what the W brand and its inception was — I don't know if you've heard the story, but it was really sort of Barry Sternlicht wanting to reinterpret that hotel experience. As some of the narrative goes, for example, the notion of a lobby. How a lobby is a wasted space, right? You sort of check in, you check out and he was like, "Well, why isn't this like my home? Why isn't it like a living room? Why isn't there a bar? Why aren't we activating it and animating it?" I think Barry really set the tone for something exciting, but I have to say, as someone who worked on the brand of things, I look at my sister brands who are completely compelling in their own way. They were still a little more traditional at that time. You know? Westin, for example. Or the Sheraton. Certainly in those days, I think even for the luxury products like the St. Regis and Luxury Collection, it was a more traditional notion of luxurious hospitality. W was the cool kid.
The First Ace Hotel: The Right Time, The Right Place for a Cultural Touchstone
Weigel: Belltown actually used to be a really amazing neighborhood [in Seattle]. It used to be where all the artists lived and there were several gay bars and it was like the arts district. It hadn't been that way for a while. It was an in-between time. There were new buildings going up. It just really hadn't happened yet.
All the artists had moved out. All the artists had already moved out. They'd been pushed out and it was at this in-between thing where nothing really cool was happening but they were trying to do something. It was a weird time in Belltown when we opened up.
Kelly Sawdon, former lead producer of Neverstop, Alex Calderwood's experiential marketing company, and now partner and chief brand officer of Ace Hotel Group: Yeah, I think the neighborhood, it took a lot longer, I would say, for that area in Belltown to really catch up. There were some music venues that were down in the area and some had offices in that area but it was still a little bit gritty. I would say a majority of the scene and where Rudy's was, where Neverstop was, there were a lot of the bars that were popular amongst people in that world and they were up on Capitol Hill. Aerospace [a club owned by Calderwood] was up on Capitol Hill as well.
That is where a lot of the, I would say, that scene was coming from, but Belltown was super close and because people that were coming into town wanted to see downtown and walk the fish market and get feel for the city on the water, they wanted to stay downtown or in the Belltown area because there were so many venues that were right nearby.
Weigel: Like I said before, we had bars. Alex [Calderwood] had Aerospace and he also had a company called Tasty Shows [this would eventually become Neverstop in 1996] that was producing shows and bringing them to different venues. I had the Cha Cha Lounge and Baltic Room, which were live venues. We constantly were bringing people in town and it was the right kind of a change when grunge was just getting older. All of a sudden, electronic music was happening also. It was this changeover in Seattle from grunge to electronic. Not like electronic ever took over grunge, but it was just something was happening, and that was electronic music.
Did we sit and make that plan? No. Did we see that was happening? No. We were just living it. That's the funny thing is that throughout the years, it's become bigger than it really was, than we ever thought. It wasn't that we had this big master plan of what was happening and how we were going to get on top of it. It was just that we were living it and it was what was needed. It wasn't a brilliant mastermind. It was just something we were living and there was a need that needed to be filled, to be perfectly honest. I wish that we were really that intelligent and we thought that out, but that's not the way.
Alex would have made it seem that way, though, if you were talking to him. He would have twisted it around with these beautiful, elegant words and made it seem like that's what happened. That's what he was good at.
Sawdon: I think Ace really started to develop and evolve through, I would say, Neverstop and through the non-traditional marketing events, really the music and fashion world that they were operating in. Alex [Calderwood] saw a need through Neverstop and also through a music venue that he ran in Seattle that there really just wasn't a lot out there in terms of great hotels for his friends to come and stay at when they were visiting in Seattle or musicians that were coming and touring.
Ace really started as a 28-room flop house at the time. An opportunity approached Wade [Weigel] and Alex and they knew what the challenge was when Alex had bands coming into town, when they were doing large events. They knew that there was this challenge to find interesting hotel concepts in the market and that there was definitely an opportunity there. That is really I would say how Ace came about. Ryan [Bukstein], I don't know if you want to add to that?
Ryan Bukstein, former cultural engineer at Neverstop, now director of PR and marketing for Ace Hotel Group: No, definitely I agree. I mean, and I can speak from my perspective when I was a student at the University of Washington, I first got involved with Alex [Calderwood] as an intern for Neverstop. What attracted me to it was looking at this company where they were doing events around town. They were concert promoters. They had a barber shop as part of Alex's entrepreneurial efforts, but they were doing everything, like anything they wanted and that was really interesting to me. I think that is what attracted a lot of other people like both Kelly and I and everyone else who worked for us and still does in our approach to engage in all industries that we are interested in with Ace as a platform.
A "Frustrated Artist" Finds His Muse
Kavanagh: Barry referred to himself as a frustrated artist. He would literally design bathroom sinks. He designed and sketched out the new entrance of the W Westwood in LA which is now the W West Beverly Hills. Our first W in Los Angeles, he literally sketched the arrival.
He was very much in the weeds and was criticized in the early days for being so in the weeds at the W but he knew, he knew what was being created at the W would have a halo effect for the whole company and would be bigger than just a handful of hotels. Obviously, he was proven right. He thought that design really mattered, something that's proven to be true so he spent a lot of time with design. That was the fun part of his day to go down to the design studios and hang out with the designers and work with them and go back and forth on color and the comfort of the bed, he spent a ton of time focused on the bed and he wanted to make sure it was the most comfortable bed you could ever imagine.
He was super engaged in this even though you've got to remember, he had just acquired ITT Sheraton and Westin. All of this, the whole development of W was going on within the very same time period that we were integrating the two giant hotel companies. It was quite a time. That W could have been born of such chaos really says a lot. I think it totally changed the trajectory of Starwood and made the company highly focused on design and innovation and creativity and so forth and so on, which has changed the future for us and made us what we are today. W, to this day, still has a giant impact on how we do business at Starwood.
Gerber: I think Barry's a genius. First of all, he let people do whatever, not whatever they wanted, but he basically, he didn't want to talk to the woman or the man that had been at Sheraton for 20 years and try and say, "do this boutique hotel," because he wanted people to come in with a fresh perspective on the brand. He really didn't want to take the quintessential hotel person that had been in the business forever and try and create this cool new brand. He went out and basically developed a whole new team, but in fairness to Barry, Barry is probably as hands-on as Ian [Schrager] and definitely had his fingerprint on developing the W brand personally. I would be with Barry when we'd go shopping for paint things and he'd decide, "I want the bar here and I like this light fixture." He was very, very much involved but I think Barry created a culture where wanted people thinking out of the box.
Barry Sternlicht, founder of Starwood Hotels, founder, chairman, and CEO of Starwood Capital Group: I still think individual hotels have to think about their brands in this 360-degree way, with programming, physical plans, activities, customers, specialization, it just raises the bar. And in this industry, you can't underestimate the importance of the people. [If you have a] great box, crappy service, nobody's coming back, and a crappy box and great service, you actually might get them back. Unless it's fatal flaws like your shower doesn't work.
But I think I like this industry. I do lots of things in real estate. I just don't do only hotels, but for me, this is a blend of design, art, brands, marketing, service, people, and I like all those aspects, so for me, this is the part of what I do that isn't work. For me this is just ... it's really fun to imagine and create. I knew what I wanted to do with this brand, and it's made a great team, and I helped execute it, and we've been working together forever.
We have our own design team in-house [at 1 Hotels, his newest hotel brand], and we work with these people, and they became famous after we do our hotels with them, they keep all of our design guys, many of them, had never done hotels before. So, they were like, "We're going to have to take an interest in them going forward."
Lalvani: Here's what has been great about this business and the people that are in on this base. I know it's true for André [Balazs], Barry [Sternlicht], for me, for Liz [Lambert, founder of Bunkhouse Hotels], for people like that. We've just done stuff that we liked personally and if it's just stuff we like to eat, drink, look at, the ways we like to be entertained and that authenticity shows through and we never did focus groups for W. We never tempered ourselves for W or for Standard and Liz doesn't do it either. That conviction about doing things you really care about, you love, and frankly for all of us doing things personally that we would use, I think is a big difference. I do see these bigger companies saying what might Millennials like or should we do this kind or we need a craft beer thing because that's what these people like.
For us it was never about that it's never been about that it's just doing things that we really like and then whoever follows, whoever likes it too, then great. That's fundamentally the true in all of these things that I've done with this group of people.
W: The "First" Boutique Brand
Kavanagh: I was so fascinated by what Barry was doing and I really responded to it because it felt like a hotel for me and people my age. I quickly gravitated to the W team and it excited me and we also quickly learned that we didn't have to spend a lot of money on advertising or marketing because W was such a great story so PR could really be the marketing driver to generate awareness from the new brand.
PR became the primary vehicle to talk about W and get people to try it and want to try it and want a W in their city and want other hotels to be just like W so PR was a pretty important part of the puzzle in those early days.
Barry always told this story, and I had a similar experience and I think a lot of people did. I think boutique hotels [back then] were so cool and they were fun to go in and have a drink and eat at the restaurant because they had great outside restaurateurs and a cool place to stay over a weekend, but if you were a business traveler they often fell short. You might have a great time at the bar but you wouldn't be able to get your fax in the morning.
Barry's vision was to blend together what was really cool and different about boutique hotels with the reliable services of a business hotel brand. That was his vision, that's where he thought W could be very different.
We used to talk in the early days about bringing together style and substance. It really seems to hit a mark because it was definitely appealing to trendsetters but it was also appealing to consultants from McKinsey who were young and wanted to stay somewhere cool but they needed to get their work done at the same time. That was kind of where we thought W brought something different to the table.
We also knew, and this is really important, as you well know, and very important to this day; Barry's intention was always to do W but the acquisitions of Westin and ITT Sheraton, were kind of opportunistic, but in his heart he always wanted to do W.
He quickly realized that to have the scale of these big brands and the infrastructure of these big brands and the loyalty power of these big brands would enable the company to grow W beyond New York and Miami and Los Angeles which were traditionally the strongholds of boutique hotels.
It was really kind of a breakthrough that you had the power of Starwood to help grow this boutique brand which grew really quickly. I can't even imagine how many hotels we had within two or three years. It was bringing this kind of boutique style and experience outside of New York City.
W brought a brand point of view to boutique. In the early days we really discouraged reporters and other folks from calling W a boutique hotel brand. We didn't necessarily want to be associated with boutique hotels because they had their own baggage — they were all style and no substance. We tried to talk about W as "style hotels" or "design-led" hotels but most people still call them boutique hotels, but we really almost wanted to take ourselves out of that category.
I don't think Barry ever really saw those other brands as competitors, per se, because he knew that we were going to be able to position ourselves; I think he was looking more toward the big brands like Marriott and Hilton and Hyatt and saying we can get people from your brand to stay at ours because this is exactly what they've been looking for.
I think he was looking for more of a psychographic from all different sorts of places and finally it was a brand that he created for himself and his friend and people like him and he knew there would be a market for that right off the bat.
One of our biggest problems in the early days was pricing. We had to keep raising the prices in the early days and we didn't know how much we could raise them. In the history of brands, it is very rare for a brand to be pulled up. We had envisioned W to be a competitor with Marriott and Hilton but very soon it was rising to the rates you would see at luxury hotels and we realized that what we had envisioned turned into something different on the upside. It's super unusual for a brand to be pulled up in the market.
Certainly, as you see some of the newer Ws in the last decade or so, in international markets they definitely are in the luxury sphere which was not what the brand was originally intended to be.
Swidler: I remember earlier conversations with Barry Sternlicht. He was talking about the premium people were willing to pay for design. Performance numbers of his W hotels were exceeding their expectations. They created this whole upper upscale category using design that just didn't exist before.
Leondakis: I think W, what Barry Sternlicht did with W, whether it's boutique or lifestyle because they were a little bit larger, I think that really brought the notion of this alternative hotel experience to mainstream. The business traveler who was in the Starwood SPG [Starwood Preferred Guest] loyalty program could now try this cool hotel, this alternative type of hotel. It introduced that loyalty points junkie to an alternative option. W was a very pivotal moment, I think, in our industry.
DeFrino: I think W was a very important brand for the boutique and lifestyle segment because it was the first branded boutique hotel where everything was named the same, everything sort of looked the same. Even though they were individually designed they had a true design point of view so that you knew when you walked into a W. They did it really well while remaining boutique.
Most importantly, they called them all Ws, so people started to identify with what a boutique was. They started to identify W. W gave the rest of our niche credibility and distribution in many ways. Although they were not the first, the way they went about it in sort of a less organic way, in a very directed and brand-centric way, gave the rest of the boutique segment some tailwinds. That was, to me, the most important part about W hotels.
Depatie: Then there was really nobody else on the map that I can think of until the last really 10 years when people started showing up, especially W. When Barry Sternlicht, mad genius that he was and still is back then, came up with W and really committed to it, then people started paying attention to the segment. I thought, "This is maybe something really real."
Ace Hotels' "Local" Style: Born Out of Serendipity and Necessity
Weigel: I'm not the person that sees it [the hotel's style] as this romantic, really thought-out thing. It's something that happened and it's something that reflects what our likes were. Alex [Calderwood] and I are not fluffy guys and we like simplistic. We love vintage. That's what was a natural thing. It wasn't something that we tried to go out and be like, "Oh we want to go out and be local and we're going to shop at these local stores."
It's what was available, it was what was there, it's what we loved. It wasn't something that was thought-out like, "Okay if we go there, we're only going to shop at local stores." That wasn't the case. It was the case of that's what was there. That's what we did. You know what I mean? It wasn't this thought-out thing like, "This is who we are. We only shop local. We only deal with this." But we believed in a community and what we would try to do is say, "Okay, this is the building we found."
Most of the buildings what came to us were not looked for. They were something that somebody says, "Hey, I have this building over here. Would you guys be interested in this?" Usually some place that was cheap, a dive, and nobody else wanted. We would look at it and say like, "Okay, this is really fun. This is really cool." We would figure out how we could be a part of that community and bring our people, or like-minded people like ourselves, would want to go. That was the difference between us.
Everybody else in the hotel industry was looking for that business traveler. It's either you have a resort traveler, somebody on vacation, or you have a business traveler. We didn't really go for that. We went for that person nobody else was really going for. The creative. That person that worked at a magazine. That writer, that artist, that musician, that ... Nobody else wanted those guys. They wanted that business guy who ... They have 50 employees and they were all going to come stay at your hotel on a regular basis and we didn't really go for that crowd. Nobody wanted them. We opened our arms to them and said, "Hey, look. We have something interesting."
How W Changed What We Think of as "Boutique" as a Lifestyle
Kavanagh: The early boutiques were definitely inspiration for W but the vision was to take W beyond the boutique space and marry it with the reliability of business hotels which is what we thought made it different and also to grow the brand globally rather rapidly. Again, in those days, boutique hotels were primarily found in New York City, maybe Miami, maybe Los Angeles but you certainly didn't have boutiques out of that golden triangle.
One of the other things that we did and have been able to do with great success that I think distinguishes W. For us internally at Starwood, it was really interesting because virtually from the opening of W it gave us permission to blow up traditional hotel conventions and to break the rules of hospitality.
I remember having so many conversations about armoires, of all things, and the died-in-the-wool hotel operators said, "We must have armoires in every hotel room because they hide the TV's," and Barry said, "Why should we hide the TV? That's ridiculous. No one wants a big clunky armoire in a hotel room." When was the last time you saw an armoire in a hotel room? The beauty of W was it looked at every hotel convention and just rewrote the book, whether it was the minibar or the way the lobby worked or what kind of restaurant you ran or where you put the bar or the beds.
W was the pioneer of the beds, and were, in fact, the inspiration for the Westin Heavenly bed. I think Barry sort of beat himself up that he didn't brand the W hotel bed because people loved it so much and he had put so much money in that bed that he said, "Let's bring the bed to Westin and let's brand it and call it the 'Heavenly Bed,'" and make a big splash around it and certainly we owe all our good hotel room beds a heavy debt to the W and other boutique pioneers.
W also broke the mold of what was then a very traditional hotel experience. It was very generic from one hotel to the next. I'll tell you a story, I think this was December of 1998 so, right after the first W opened. I worked on a speech with our then chief marketing officer, and his whole point of view, based on Barry's direction and the early success of W, was that we were going to create a real lifestyle experience and distinct design point of view around all of our hotel brands and we put up pictures of hotel rooms from Sheraton, from Westin, from Marriott, from Hyatt, from Hilton, and we had those little gadgets in the audience where you can vote and we said, "OK which one's a Hyatt, which one's a Westin, which one's a Marriott?" Well of course, no one could tell the difference because they all looked the same and then we popped up a picture of W, and it was like going from black and white to color. You just saw that there was so much potential for hotels and so many ways to express your brand and different lifestyles through design. I think that was a real lightbulb for our folks at Starwood and they ultimately brought that point of view to our other brands.
Petrone: The letter W, for example … The gym was called Workout. The concierge was called Whatever, Whenever. The pool is called wet. Again, it was a play on the letter W. We just wanted to be sort of whimsical and have some fun. We converted the living room, excuse me, the lobby into what became a social hub, a living room. Now you see it in all the hotels.
Back then, in the late '90s, as you may know, the lobbies were kind of a dead zone. People would go in check in, check out and get the heck out of the lobby. We created cozy spaces. We learned a lot from what Starbucks had done with creating an environment where people would want to socialize and hang out. We had games. We had books. We had fireplaces. We had fun. We had good music. We would address all the five senses, so when you walked into the W we attacked your senses. Your visual sense, was very pleasing to look at. We partnered with great architects, world class architects, at each W and we had great food and beverage. It smelled great.
We spent a lot of time on what different scents, scents meaning s-c-e-n-t-s, with the place, what you would smell when you went in, very floral or a perfume or a different type of scent that would be attractive to the environment. We had different types of music. The audio sense, as well, was thought of. How it felt. The type of furniture, the fabrics, the colors, so what you felt, what you heard and what you saw. That was quite the difference at the time to think about that because back then, all the hotels were kind of copying each other and just pretty much plain vanilla. Just to kind of wrap up the first impressions of the brand launch, we had a lot more success than we anticipated. Our ADR, or average daily rate, ended up being much better and much higher.
"Boutique" Versus "Lifestyle"
Hanson: To me, there's been some research that makes me feel that these are good definitions, but these are not industry promulgated definitions. To me, a "boutique" hotel is about the hotel. It has something about its architecture. Maybe about its location. Its history. The design of it or something that makes that hotel unique and special as opposed to a lifestyle hotel which is about the guest. It's appealing to the lifestyle issues of a guest. If it's someone looking for more health and pampering, relaxation. Is it someone looking for the kind of amenities and services that will be offered to meet their lifestyle. It's really targeting the guest issues and boutique is really about the hotel.
When W was launched, there were people saying this will fail. There can't be a boutique hotel brand. That's a contradiction in terms. It's an oxymoron. I said, "You've got to be kidding." The extent that people can have a loyalty to it not like a loyalty program, but just a loyalty to a hotel company that does something really well and special. Again, it's not that the rooms are going to be the same decorations, design, shape and all those kinds of things. It's going to be the nature of the experience.
Walshe: I think one of the things that boutique hotels did that a lot of hotels now do, but nobody had done beforehand, was to create the connection to the experience that you would have in the hotel and to the experience that you could recreate at home.
For example, one of the things that boutique hotels did before anybody else, and people like Ian Schrager put an enormous amount of effort into, was playlisting. The music that got played in the hotels and the restaurants and the public spaces was something that was extremely well thought out and people connected with. Then people said, "Oh my God, it looks like the hotel is playing my favorite album that I'd love to buy." The hotels went, "OK, you can do that."
You could buy playlists from the Standard in New York or where ever it may have been. You could put that music on at your dinner party at home and when people said, "Oh my God, your music is amazing. What is that?" You say, "Oh, no. It's the Standard playlist from New York," and representing elements of the boutique hotel experience in your own home environment because a real badge of honor. It became something that people aspired to do whether it was the music, whether it was buying the scent of the hotel in the candle that they burn in the lobby.
I think prior to that we hadn't ever really seen people wanting to take the hotel experience home. There was a very distinct separation that you lived at home and you went to hotels and you stayed there and you were away and then you went back home. I think that one of the things that the boutique hotel movement created that had never been done before was this fusion of the hotel experience with your home experience. For the first time people wanted their homes to look like the hotels they went to stay in. I'm sure that, and it did for people like Kelly Wearstler earlier, that a lot of the hotel designers who were designing boutique hotels also had very successful residential practices because people embraced that aesthetic style of hotel. It was very modern residential. It felt like the condominium you really wanted to live in. I guess that's a long-winded way of saying I think it created a much closer alignment between people's experiences in hotels and their experiences at home, or their lifestyles, and crossed over between both.
How W and Ace Built on the Legacy of the Boutique Hotels That Came Before
Gerber: [Barry Sternlicht] wanted to take what Ian [Schrager] had started and develop it into a little more of, and I say this loosely, "a corporate boutique hotel," meaning that there was a time when we were at the Paramount there were certain businesses that wouldn't let their employees stay in the Paramount. It wasn't the right image, it wasn't the right, everything about it was, you see those commercials on television for the Cosmopolitan in Las Vegas, it's just the right amount of wrong. That was Ian's kind of thing, they were out there a little bit and so a lot of these big corporations didn't want to be associated with that.
The other thing is that Ian's hotels were really about the social environment. It wasn't about catering to that corporate business person and so Barry thought you could mix those two things. He thought he could create this cool boutique hotel that was really fun from the public spaces and the food and beverage and the social aspect but also be able to cater to that business person.
This is going back to the time where he used to get a fax and they would bring it up to your room and slide it under the door. Well, in Ian's hotels it was 50/50 whether you'd get it or not and it was, who knows how long it would take to get it. Barry was; I want people to know that if they're at one of my hotels on business that they can expect what they would get as far as all of the inner conveniences of the Sheraton but just in a cooler environment. That was Barry's whole idea of creating this W brand.
Kavanagh: To me, the biggest thing was bringing design to the hotel space. In those days if you were building a four- or five-star hotel, you went to two to three architects, two to three designers; they were the go-to hotel architects and hotel designers.
Barry [Sternlicht] brought in people from outside from places like Pottery Barn and Ralph Lauren to reimagine the hotel space with a residential eye and with a very design-forward point of view. I think that that changed the whole point of way, they looked but also how they worked.
That crazy attention to detail; everything was to have a point of view. This is beyond 2000 and I remember even the signs that you said you couldn't smoke in your room were clever. There was a clever aspect to everything that they did and they really turned the hotel experience upside down and brought a design lens to the whole guest experience.
Bringing in the independent restaurateurs, turning the lobbies into places you might actually want to congregate, in the case of W, we turned our lobbies into bars, which people thought was crazy. Who would want to go into a lobby which is a bar? Well, it turned out a ton of people did because we had to change out the floors within the first month.
Petrone: Each W retained its own uniqueness and was indigenous to its location, so the W Honolulu looked very different than the W New York and the W New York looked very different than the W LA and maybe San Francisco. Each W was very unique to its surroundings. It wasn't a cookie-cutter brand like many of the larger brands.
One of the smartest things I think Barry did was he had us all canvas the market and go out and look at other hotels, but not only other hotels, but even outside our industry. We looked at different case studies. We had a chance to be with different folks.
Barry met with Howard Schultz from Starbucks. Barry was a really smart guy and was ahead of his time. He knew, even though he might not necessarily been the target market, he knew there was a niche that wasn't being served. What we did is we did go and visit all the many of the other Ian Schrager hotels, to kind of see what was working with them and what was not working. We thought that we could take economy to scale and what Starwood offered, in terms of economy to scale in size, and then add a loyalty program, like SPG, to a boutique lifestyle market that wasn't being served. To any grand scale.
When we hired people on the field level, we were looking for that persona, that type of person that felt comfortable in the non-traditional boutique lifestyle hotel. Now they are common, you see them everywhere. Everybody's got the cool hip hotels and whatnot. All the big brands have them now. Now they are more acceptable, they are not as unique and ... Back then, 20 years ago, it was quite radical, if you will. At the time, all the hotels were pretty much the same. They were pretty much plain vanilla, cookie cutter. You couldn't tell much difference between Sheraton, Hilton, or Marriott. They were all sort of the same. Very corporate, very traditional, very predictable. They wouldn't take chances, you wear whatever was on the uniforms or the way you greet the guests or how you serve room service. How the rooms looks like. What the food and beverage experience would be like.
A lot of the hotels back then ran their own food and beverage. It was hotel food. Nobody wanted ... It wasn't sexy, it wasn't fun, it wasn't unique. People would leave the hotel because they would go to a fun restaurant, a fun bar. We said why not keep them in here, we've got them, we've got them captive. Let's give them a reason to want to stay in the hotel. Let's create that sexy bar, that fun bar that ... An exciting place to hang out. They in essence then became destinations unto themselves. Where people who weren't staying in the hotel would want to come. Rande Gerber, with Whiskey Blue and all the bars, that was a big part of it. He knew how to get that crowd and create a scene where people would want to go out and have some fun and hang out.
We did go out and look at what the competition was doing. I don't believe Chip Conley was huge at the time. I met Chip in later years, but ... We later looked at Joie de Vivre and other brands after W had been very successful, but I don't recall how big Joie de Vivre was at the time in the mid-'90s when we were launching W.
We were aware of Ian Schrager because he had success with Studio 54 and the Mondrian and the Delano had already been out and were very successful. He had a couple hotels there in New York and which, ironically, I later ended up working for Ian, being the vice president of operations and I also worked for André Balazs. I worked for, sort of, the big three boutique hoteliers. I've worked for André and for Ian and for Barry. I kind of learned from all of them and saw what best practices each had to offer.
Khan: I would say "yes" [that W scaled boutique in a way others hadn't necessarily done before] but I was at Starwood. I would be curious to hear what someone like Morgans Hotel Group would say because there is everything that Ian Schrager did and how they grew that.
I think the beauty of W also is that when you were with a parent company like Starwood, there was a way to grow this in an intelligent way knowing that there was a lot of back support from the parent organization. I think those sorts of challenges are things that we didn't have to worry about, so you could truly worry about refining the experience, refining the good beverage, refining the operation to be this sort of differentiated product.
Weigel: I do want to say this, that the question about Ace being the first one for the community … I don't know if that's necessarily so. I do think that Ian Schrager was doing it. So was André Balazs and those are hotel greats. I think they're masters of what they do.
We were actually working on the Seattle hotel when André approached us and had no idea we were even doing a hotel in Seattle and wanted us to do a Rudy's barbershop. We did our first Rudy's barbershop because of André's vision of a community. We had to tell him, "We're doing a hotel, too, and we're actually doing it with a Rudy's." He was like, "Oh well that's cool" thinking like, "Oh, no competition. You guys are just little guys, big deal." He had that same vision of a community.
Schrager approached us too and was trying to put that thing together. They do it a little bit slicker but they're really good at that, too.
W Wasn't for Everyone — But That Was the Point
Kavanagh: I have one really fun personal story to share, and I think it says a lot about W. It was right after we had opened the W Times Square. It was right after 9/11. It was the first hotel to open in New York after 9/11, so I think it was October or November of 2001. My mother was visiting from Chicago, and I took her and my sister to the W Times Square to have a drink before we went to dinner.
She was, at the time, 70 years old. We walked into the lobby which was packed, packed, packed and loud, loud, loud and crazy drinks all over the place and music and tons of colors and she said, "This is the most terrible place I've ever been. We've got to get out of here." Then the whole night, over dinner, she said, "I don't know about this Starwood company, K.C., maybe you should go back to work for Hyatt. If this is where they're putting their time and energy, I don't think this is a good idea." I told her, "Well, mom, you're not supposed to like it," and promptly sent her back to The St. Regis, which she loved.
It definitely had a lot of detractors too. A lot of people just did not get it. A lot of the patriarchs in the hotel industry thought it was crazy and how can you have a white bed and how can you have a bar in your lobby and how can you not have an armoire because you're not going to get five stars from XYZ rating company and blah, blah, blah and Barry didn't care. He knew there was a market for this brand. I think he liked it when people of a certain age and stature would criticize it.
Swidler: Andrew [Fay, president of The Gettys Group] and I have this story that illustrates the quality of the people that Starwood was putting in their hotels to carry out the experience promise, if you will. It was moving from an experience from rather just lodging and taking care of basic needs.
I remember you checked into the W hotel and the bellman took your bags and he took a headshot out of his pocket to give to you. Starwood was hiring actors and models to work in their hotels. That was a different model, too. Thinking of the overall guest delivery experience in a very theatrical way.
Petrone: We found out in most markets that we opened, and I think I was there when we opened 20 to 25 different hotels when I was there, because I was there for a couple years, and they were the critical first couple of years for the brand. I was crisscrossing the world opening these hotels and everybody wanted to be a part of it because the minute we open it was the place to see and be seen. Everybody wanted to be a part of it for a number of reasons, not just for the food and beverage and the restaurants and the decor, the design.
It was a place where people felt like that's where they wanted to be, that's their tribe, if you will. With the ADR [average daily rate], we ended up competing against Four Seasons and Ritz-Carlton in many cities and we went head to head, even though that was never our target market. The luxury market wasn't our target, we wanted that niche. We were defiantly upscale, but not ... We didn't think initially we would be head to head with Four Seasons, but calmly found that in many markets we could demand those rates because that's everybody wanted to be.
It was a little bit of serendipity, a little bit of a pleasant surprise that the demand for that type of product was much better that what we anticipated. We were very pleased with the success and still are.
Khan: I have to say, interestingly at that time, we were a small group that was a really passionate group. It was a group of passionate decision makers. I think one of the best things that could have happened was that in those days, Starwood owned most of the Ws. So it was really Starwood saying, "All right, if we're going to do this, we're going to put the money into this. We're going to grow it and we're going to make it something." Now, when I look back at that and I think a little bit about it, I wonder if Barry could have pulled all of that off, had faith in third party ownerships. I know there were some joint ventures, but even, I think, the partners, if you will, were very aligned with their thinking of the tremendous innovative opportunity that W represented at the time.
Ace Hotel Heritage Documentary
Ace's Connection to the Local Community
Weigel: I think that building community was something that we were always into. That's from our background with Rudy's. That's what we found works well with Rudy's, and what we did well because we owned bars; we owned Rudy's, it was all set up about that.
We have enough businesses that we were able to build a community by either putting a Rudy's in it, doing a bar ourselves in it, or always wanting coffee, or something somebody else could do because we learned from Rudy's is that's what works so well.
If you're waiting for a haircut, what do you want? You want a cup of coffee. Or maybe you want to have a beer while you're waiting for a haircut. We always thought that was a really interesting place because it's a time when ... There's not very many times we get to go be going out and spending money that you can actually go and have a service that you need and you're part of a community. That was a big thing that we did with all our businesses. Does that make sense?
Because everybody else was going for that business traveler, what their philosophy was is that they want it to be familiar. They want the room to look the same of the last Hilton they stayed at. They want the same bedspread, they want the same restaurant. They want everything to be the same so that always feels like they're traveling to the same place.
That's what we hated the most about the hospitality industry. It was that the hotels ... It's like, "Ugh. Who wants to always see the same thing no matter where you go?" That's what they believe was the comfort for that old-school business person.
So we said, we consider ourselves creatives so we're like, "We need something for us." Something that we would stay in. Something where the creatives ... they don't want to see the same thing. They don't want to have the same experience every time they check in someplace so they're in their comfort zone. Take on the city, that's why you travel.
Sawdon: I think we really wanted to be a place that people in those cities saw as an extension of their living room or a place that they were welcomed. For us, we saw that as an opportunity to really bring in the energy and the culture of the city by having the people that live and work in these neighborhoods to be having meetings in our lobbies to be coming in for breakfast, to be coming in the evening for a cocktail. I think for us we saw that as a way for the hotel to really feel like it is connected to the city and so it was an opportunity for our guests to check in and recognize right away that oh, some of the people that are in these spaces are really people that live in the neighborhood. You really get an authentic sense of what a city is like if you have the people of that community that see the hotel and the lobby and the public spaces as an extension of the neighborhood.
We really like to collaborate and partner with people and we think people do in different industries do things better than we do and so we always saw that as our DNA to be able to work with best in class with a lot of different industries. I think our energy that is created in these hotels is about sharing. It is about really how do we highlight our friends and partners that we think or people that we are just fans of that are doing great stuff in these cities and so I think for us it is about really being a good partner and being a curator on some levels but also being there to highlight and support other groups that have a unique voice.
We think that the ability to bring in a lot of different really distinct and unique and interesting voices is what I think makes Ace feel like and every city is different but you still feel like there is a similar thread throughout but really gives it the authentic feeling of what each of those cities is, what the culture is in each of those cities. Ryan [Bukstein], do you want to add to that?
Bukstein: Yeah, no I think that is totally right on. It just blows from a real personal interest in this for us. The business came from what we were actually interested in doing like starting with Alex, we were all people that would go to cities and want to really dig deep and engage with the part of the city that locals were engaging with. A lot of that came from Neverstop too.
I think it is a big reason Neverstop was so influential; it's because we were traveling all the time with Never Stop and our travel would be to do an event or something like that but we would always like, actually it is a really cool example I think is the London hotel because when Kelly, Alex, and I were traveling for Neverstop, you would always stay at what was called the St. Gregory Hotel at that time in Shoreditch because we loved Shoreditch and because our friends hung out there and people we knew. There were bars that we were interested in and music.
It was the place we were interested and the hotel was just like a regular hotel but it gave us the connection with the part of the city we liked and that hotel is actually is what became Ace Hotel London, ironically. Kelly has more of that story but I definitely think it just represents for us that this is like a personal journey for us and all our staff and still is. The business gives us a great way to do what we are interested in personally with our business.
Sawdon: A lot of the things that we did were just instinctual and came from none of us coming from the hotel industry so I think there were certain happy accidents that I think just came about from our naivety and I think that there are some things that looking back, we were really fortunate that it resonated and connected with people in a certain way. Our Portland lobby when we first put the large couch in the lobby area not really knowing how it was going to be used just assuming that it would be hotel guests that were waiting for someone to come down or someone waiting for a hotel guest to come down and it really turned into a place that people would come from local businesses like Wieden & Kennedy an ad agency in Portland.
They would come and get a coffee from Stumptown and then have a small little impromptu meeting around the couch in the lobby. You saw how people were using the space there and as we started to work on both New York and Palm Springs, we started really thinking about that's a great element of energy in our hotel in Portland and how can we do something similar like that in New York but I would say there wasn't this like very strong point of view in terms of this is our business brand for all these different public spaces. It was how would we want to use these spaces and what do we feel is right and what have we seen with our other hotels and applying some of those same ideas and principles and hoping that they would work in these other markets.
W's Design Evolution
Andrew J. Fay, president of The Gettys Group: Making the industry focus on the importance of design as a differentiator, using design as a value creator, and a really thoughtful response to increasing the increasing sophistication of consumers is a part of W, and Starwood's legacy. They were very receptive to design and embracing it, and W was proof of that.
Swidler: I remember how controversial it was when the first W hotels stuck the bed in the middle of the room and pierced a hole in the bedroom wall and had painted wall, instead of a wall covering. It was dramatic design, a nightclub and retail design influence on the hotel environment.
The W was more focused on bar and restaurant as well. The bar was big, big component. The activation of public spaces, inside and outside, and there was a focus on artwork as well as part of the experience. And music, art, music, food and more dramatic.
Fay: At that time big global brands were focused on consistency so you could be at a particular brand wherever and have a very similar experience. The boutique community really figured out a more authentic, local, distinguished experience not consistent from hotel to hotel was the secret to success for them. Now the big brands have moved form that consistency approach.
Khan: When I joined [in 2003], the group at the time, or the group at the inception of the W brand, the very inception, was a group who was previously at Pottery Barn.
I think that the challenge for Barry, at the time, was "OK, I want to create this residential feeling environment that functions like a hotel."
What they did, and I thought a very smart way, was they created two basic palettes, right? One was about these darker woods and then there was a richer tone of color. Some of the hotels had the darker wood with red. Some of them had the darker wood with navy blue. San Francisco was navy blue. Red was the Court in Tuscany, as an example. So they built these palettes off the dark woods.Then there was also the lighter palette that was created.So for places like W San Diego, for example, where everything was white and this sort of lighter blue. These two palettes were built with the notion of sub-locations that were dark, depending on where they were, and some got the light.
In time, obviously with the evolution of every brand, after Barry, there came a number of other points of view and the thought then was, "All right, how do we start to individualize each hotel." Give it an identity, give it a character, give it something that feels right for the brand, but make sure that it feels correct to the individual location. So if you do this correctly, knowing that the service promise of W is consistent, W DC should not look like W Hong Kong. W Hong Kong should not look like W Barcelona. Because the design has to be a natural response to the building, to the location, to the culture, to the history, to the personalities of the locations that the hotels lived.
I think there was definitely an interest or passion that, like fashion, we wanted to push the boundaries a little bit. I think the bigger success of those boundaries is that they become more like focal points or accent points. That was us learning that it is about creating that innovative design, but you don't slather it everywhere. You kind of pick and choose what you do and how you do it and where you put it. But certainly, I think there was an interest in pushing the boundary or the envelope of conventional hotel design.
At the end of the day, I don't believe, no matter what as a designer, you can't make everyone happy. You can't work for everyone, right? On the one hand, the beauty of being part of nine and then 10 brands at Starwood is that in theory, there is something for everyone. The part where it would start to get a little bit challenging is that there were a lot of people who would try W, but it didn't necessarily resonate with that psychographic. I think they would find it uncomfortable.
I think from a tactical standpoint also, and this is in all good design, you listen to your consumer, you look at your guests' commentary, right? The guest experience commentary and start to understand. What are the biggest detractors in every hotel? How can we maybe start to fix them through design? We had some guests say, "Oh, the rooms at such and such place are too dark."All right, how do we lighten them up? How do we do it in a way that it still has the ability to go from day to night and be functional to sexy, but to do it in that way that understands both sides of the coin. Instead of saying, "this is only a nightclub" or "this is only an office."
Knowing that design is almost like a cost of entry experience now, I think the next thing that W tried to do is really to try and hone in on the personality of the consumer, the guest, try and understand the psychographic. What are their passions? What are their interests? What is really new, next and now and compelling in terms of bringing those types of consumers? I think it was definitely a much deeper dive into the personality.That's where I think it became very apparent that both design and brand philosophy had to marry in a very strong way.
Obviously, because I'm from there, I'm biased and I would say absolutely, yes, W brought this design concept into the mainstream. There might be others who disagree, but I think in my time there, just to witness, just to find that break, it went from an empty lobby to being a living room to having a personality to now there's activations that take place. There's music events that take place. There was a time when we had, we still have in fact, this heavy DJ program which becomes very compelling. You know, the DJs are new upcoming talent, undiscovered. It was really about finding these things that not everybody knew about, but it was more the secret underground of a location that was the personality. It was like, how do you use W to offer them a platform, but at the same time, use them to bring the new, the tech-seeking audience that we feel was so important to be a part of our brand?
Chapter Four: A New Generation of Boutique Hoteliers Emerges
Leondakis: Then we had André Balazs come into play, and then Viceroy came into play. All really great entrances. The way we thought about it, the more entrance there were into the boutique sector, the boutique and lifestyle sector, the more attention the public was ... There was more awareness of boutique hotels. When we first started marketing ourselves, it was like the consumer didn't know what boutique meant. As I said earlier, too many people associated it with the velvet ropes and the nightclub with rooms on top and we weren't that, so we struggled. The more people entered the boutique segment of the industry, the greater awareness we got and the less of a struggle we had to communicate to describe what we were to customers.
We were paying attention to all of those people, and I think there was a period in the '90s and the early parts of 2000 where design was ... It just became all about design. Everybody started to compete on design, and then the big box players were hiring the same designers that the boutique players were using, and now you start to see the big box hotels with high style and design. That really forced everybody ... It certainly forced us to up our game. We realized rather quickly that you can't compete on design alone, and I maintain that point of view today. Today, great design is the price of admission, you gotta have it in our sector, the public has come to expect it, they want to be wowed, but that's not enough because it's everywhere. Design has been so commoditized. The service execution, the programming of the hotel, the experience delivery really defines you, not design.
Walshe: Just to give you a perspective on what was happening in Europe at the time, I think you saw the emergence of companies in London, like Firmdale Hotels. You had then people like the Kemps who owned Firmdale, creating these collections of highly individual, but consistently individual properties in markets like London, where they would have three, four, five different hotel offerings.
I guess, for me when it did become a movement is when you started to have groups of boutique hotels that were highly successful in destinations. Which kind of happened from the mid to late '90s in the way I see it.
Then I think we also realized as an industry that there was a boutique hotel movement when, again it would be late '90s, early 2000 to mid-2000, you had some of the larger international hotel companies try to start mimicking what the boutique space was doing.
For example, with the emergence of the Park Hyatt product, you then had these very what had traditionally been much more conservative replication model based larger hotel groups, who realized that there was a customer to whom the boutique space was speaking. That they were willing to pay a premium for it. They tried to create hybrid product offering. I think that Park Hyatt is a great example of that. Interestingly, in my view, Park Hyatt have been more successful in what they've done internationally than domestically, but when the Park Hyatt in Paris opened, when the Park Hyatt in Hamburg opened, when they opened in Sydney in Australia, these were true boutique hotels in terms of size, design, uniqueness, individuality, excellence of service, but it was the first time we were seeing a boutique hotel experience that had an international brand name on it. I guess that proved that the boutique genre had become a movement, because when anything becomes a movement the big guys want to get in on the act.
Online Travel's Influence on the Growth of Boutique Hotels
Swidler: I think that another need for drama, for differentiation from that consistency you saw in design and experience from all the big brands was the fact that this was the infancy of the Internet. There were no Internet bookings back then. As a result, these hotels relied on word of mouth. There wasn't even traditional advertising and central reservation phone numbers then; it was a very different era. These hotels, because they were competing with established brands like Marriott, they needed to be bigger, bolder, and more different just to call attention to themselves. They didn't have the same channels that they have now.
I was just thinking about this infographic the other day that I saw from STR [a hotel data and research firm]. If you look at number of independent hotels in the '80s and '90s and track it all the way to today … I remember a time in the 90s where the conversation was that the big brands would eat up all the independents. It wasn't the OTAs [online travel agencies] and distribution systems you have now.
You were seeing a number of independent hotels getting renovated and being converted to the big brands. I remember predictions about the death of the independent hotel. They weren't seeing OTAs and those vanity sites that we have today.
If you watch the chart of independents start to fall or when they bottomed out — maybe the late 90s to the early 2000s the numbers start to go up. They maybe go up as the same line as the OTAs go up.
I remember going to an ALIS [Americas Lodging Investment Summit] conference in the early 2000s, and they said online booking would represent a very small percentage of bookings for the hotel companies. They didn't feel the threat.
But if you look at independents today, we have many clients who are asking us to do an evaluation of whether a hotel should be purely independent, soft branded, or branded. The numbers are quite compelling now as it relates to hotel owners and management companies and their ability to direct market to guests. It's a very interesting chart to see the number of independents compared to branded.
Fay: I remember we were meeting with Leading Hotels of the World in the early 2000s, having a conversation about their future. At the time it was just purely a marketing affiliation for small independent hotels who were looking for a way to leverage consolidated marketing spend. They were charging very little money compared to what soft brands charge today.
Remember also, and this is also indicative, you would stay in a Preferred or Leading Hotel property, and they would be promoting their member hotels in a printed bound book that was in your guest room. They were relying on print to promote the rest of their collection. Online distribution systems hadn't evolved yet. They were using kind of old fashioned tools to do it, looking back.
Sternlicht: I do think that with the advent of the Internet, small, individual properties can find their voice. We always debate whether it's easier or harder to build a brand in the Internet age. I would say it's easier. I'd say that people can find you, whether it's Montage, it's their 1 Hotel [Sternlicht's newest hotel brand], or any of these brands, like The Standard. If the execution is good, your affinity group will find you.
Pinetti: Once we were able to get hotels, to get "boutique" as a type of a combination in the airlines GDS system, the system that the airline guys use to book reservations or car rentals, that's when I knew it was a real movement. Normally, in those days, if you went to make a hotel reservation, you get luxury, convention, tour and travel. We're the guys who got boutique added as an alternative source.
What finally put us in the lime light was Google search because now people knew about small hotels, unique hotels, boutique hotels. Personal hotels, whatever keyword you could possibly think of, we owned it. As soon as search came out, we came out of the big boys' shadows so to speak and we were on an equal level, and for that most part. For the most part, our hotels don't run much below 80, 85 percent. We're full most of the time.
Sendlinger: We were one of the first hotel groups that had a website, which we launched in 1995. It was literally when I got my first internet access in Germany, but the connection speed was a disaster. It was really just about having the brochures online so you didn't have to send them from A to B, or make a copy and fax it. We knew, in order to be successful, we needed to convince the hotels to give us the GDS [global distribution system] codes. And in the beginning, it was all around GDS.
Our biggest competitor at the time was Leading Hotels of the World. There was Sterling Hotels, which was later bought and taken over by Preferred Hotels, but Sterling Hotels had some cool hotels. So, as we went through the 90s and building slowly this portfolio, we were making our own investment in CRM [customer revenue management] technology between 95 and 98, then we were part of the dotcom phenomenon and took the company public in 1999.
And that gave us enough money to really execute our vision and build Design Hotels. By the end of the 90s we had about 90 hotels, and then in 2001 we dropped some hotels that were fun hotels but didn't have a strong design mission, so then we had about 70 hotels. From then on, we grew gradually to the more than 300 hotels we currently represent.
2001: Bill Kimpton dies after battling leukemia at the age of 65
Interview With Bill Kimpton on Local News
Pinetti: It obviously had a high impact. There's no question about it. By then, we had about 30 hotels. We were in about 14 cities and so the people that worked for the company, they saw our other partner, Tom LaTour, and myself. They saw us all the time.
Even though they knew Bill was behind it all, most of the people in the field knew of him but didn't really have a chance to see or get to know him as well as the people in San Francisco [did]. When he did passed away, it was clearly ... It was like a speed bump but it didn't really derail the business. We recovered and we just basically kept things going. Yeah. It's always a moment when that sort of thing happens, but it did not derail us and we continued to expand.
The thing that I use a lot in my training is that the soul and the spirit that we use to open up that first hotel. Once you come to work for Kimpton, you're like it becomes part of your DNA. When you go through the orientation, you go through the training, you go through our road show, you go through all the leadership classes and things we do.
We make a big deal out of the DNA that started this company and that if you're here today, you're part of that legacy. You take the legacy forward, but you're inheriting a legacy, and regardless of who's here, that legacy is still alive and it's what separates us from everybody else.
Pisano: He touched a lot of people. Fortunately, we had a strong foundation of people here that knew Bill and we carry it along. I have a picture of him in my office. It's next to the announcement of him passing away and just talking a little but about him. That was one of the things that we did is, when that happened, is that was all sent out to all of us. It's in my office. I see him every day. I think that's the thing, at the end of the day we still have to think about taking ... He always wanted us to take care of the guests. That's, ultimately, what we need to do. I think that he was a business person for sure. A very successful one and a very smart, smart investor so forth, but you've got to take care of people. That's the bottom line.
DeFrino: Bill Kimpton's passing, it was an interesting time for our company for a few reasons. One is Bill was also a real estate developer. He was out very much focused on buying hotels and renovating old buildings and doing sort of the interesting things that he did and bringing in new designers. That was a big part of his role.
Of course we had reached a size at that point where there was a support structure around. It wasn't a one-man who by any means. It did give us time to sort of re-calibrate what Kimpton was going to be in a post-Bill Kimpton era, at which time we said we still want to be a developer of hotels. We still want to be in that part of the business and we'll still continue to raise funds and develop hotels.
Two is, we also think that we should be more considerate of managing hotels for other people. Although the majority of our hotels at that time were owned by the funds that Bill had raised and invested, we began to expand our reach into operating hotels for other companies and other individuals. That really spurred the growth of the management company and enabled us to become sort of the biggest national player in pretty short order. That was sort of a pivotal part of Bill
Bill left behind a group of people that he hired and that were committed to his way and many of them, including myself are still here today. The beat goes on in terms of the culture and the way Bill looked at this business. We of course had to evolve over time and have tried to keep that as our ballast, but we're also charged with being a cutting edge company and always being on the front end of trends and making sure that we're fresh and interesting and different for all generations, not just a legacy generation.
Although it was pivotal, it certainly was not the death blow at all. Kimpton actually grew, unlike maybe some other companies, Kimpton grew and prospered even more after Bill's passing than before. We did it in a different way but we actually accelerated our growth and our footprint around the country grew more and more.
Boutique Really Hits the Bigtime
Depatie: I would say definitely when I joined the company in 2003, as I mentioned, boutique hotels were nowhere on the radar besides maybe those certain areas of San Francisco and New York. Until people knew about Kimpton, they didn't know what it was exactly. Some people knew about Morgans Hotels and Schrager, but they kind of discounted it as a faddy kind of thing for maybe a Vegas or maybe a New York but not mainstream at all and not likely to be all that big.
Then I would say, by the end of the cycle of 2006 and '07, we had a pipeline of 25 new Kimpton hotels in 2007 before the downturn hit, so we had gone from 2003 of barely being on the map to by 2007 that a lot of people were paying attention to what we were doing. I'd really say between 2003 and 2005 probably, 2006, that boutique hotels started to become more noticed.
I remember there was an Urban Land Institute conference in San Francisco I'm going to say in 2005. I spoke at it in a breakout session about boutique hotels. I was on a panel with Chip Conley of Joie de Vivre who's now the main hospitality guy at Airbnb and also a guy from Marriott who ran their global brands. I remember this guy who didn't have any boutique hotels at that time, the guy from Marriott and somebody asked him, "How big do you think the boutique hotel business?" He said, "Well, I don't know, but I know that about 75 percent of our core four- and five-star customers are what we call transactional. They just want to get in, and they want to get out. They want everything to be exactly alike. They like that idea of conformity."
He said, "There's about 25 percent of our customers we think are what we are calling relational, that they actually want more engagement with the hotel. They want more design. They want more a authentic unscripted service." He said, "I don't know how big this business is but," he said "I know that 25 percent of our customers might welcome a boutique hotel offering." I think that was in 2005, whenever the ULI was while I was here in San Francisco in that time period.
It occurred to me at that point, I thought, "Oh my God, this is a big business." I think that's when people started to take notice.
When Barry Sternlicht came out with the first W, because of his reputation, I think people thought, "OK, that's interesting, but it's still a trendy, velvet rope, I'm not sure, nightclubby kind of thing. It won't last. Maybe one or two of these Ws will work, but I don't really think it's anything." But as we were watching the W thing, we thought, "This is really a validation of what we're doing here." There is demand for this kind of lodging, and it's bigger than anybody knows.
Based on that, we raised capital. We bought a lot of hotels. We built hotels. We found a lot of other like-minded developers that wanted the magic that Kimpton could bring and management and programming and design, and we found a fair amount of demand. Back at that time what I always used to tell people is I don't know how big the demand for boutique hotels is, but it's definitely multiples of the amount of supply that's in place. I think that's still true today. People don't know how big this business is, and there are a lot more players today, but I think it's substantially bigger than anybody knows.
I know Chip really well, and we tried to buy his company back at Kimpton back in the day. It just didn't make sense for us back then.
Lalvani: Before working with André Balazs and running Standard now, I came back to work with Barry [Sternlicht] in 2004. I was at Blackstone at the time, coming back to work with Barry in 2004 when W had gotten some traction in the U.S. but really hadn't gone anywhere internationally, so he asked me to be responsible for growing the W brand and the W business globally. So I moved out to Europe and did that and took over the W development to global. We got a lot done in Asia and South America and in Europe and Middle East.
To me that's probably where I had the most impact. It was primarily a U.S. phenomenon that had happened here with those pioneers and moved that to the rest of the world and translated that to the rest of the world and educated the rest of the world on what this phenomenon was.
I think clearly looking at a hotel as more than a heads and beds for the first time, was revolutionary. I think with Ian [Schrager] and André [Balazs] both having experience in venues — nightlife primarily obviously — they came at it with a very different angle it wasn't the rooms. There was something to do with interesting design in the rooms but it was really about entertainment and fun and style and part of that is actually culture that's created in those hotels and the people that they hired. We maintain that tradition until today; they weren't regular people that you were hiring.
It was a really fun process [to grow the brand internationally] and I went out to Europe to live in Brussels, which was odd but that was ITT Sheraton's old headquarters. I got there and they were having no traction in Europe whatsoever, and they said the companies just didn't get it. They said, "Wow, the W is doing so well in the U.S. but it has no traction in Europe." So I looked at it and I said, "Well what's going on here?" First, they were just saying if we're going to be in Europe we must be in London, Paris, or Milan.
First of all, they narrowed their cities and I said, "Of course that's where we're starting out, that's where we have to be." I looked at that and I questioned that a little bit and which was saying you know what this is not like we're building Standard today which is perfect, well curated, step by step, one at a time. This was a global company that wanted to expand its footprint and had a mission to do so. If you have conviction that you're going to be everywhere, let's start going everywhere and those high-barrier-to-entry markets will come when they come.
The first W that we did outside of the U.S. was in Istanbul. You may not think that's the first place to start but it actually has some edge to it. It had demographics that worked, it had a city that was super stylish. When we started opening our mind up, we did this temple, we did Doha, we did St. Petersburg, and we just started going because I had the conviction that we would get everywhere ultimately.
Then you know what? Barcelona came, then Milan, then London came. That simple shift in thought opened up the landscape and then started rolling. That was the time when we were working with third party capital partners. Starwood was not investing in every hotel because we didn't know those markets as well and with the team in NY didn't understand was that just because we think it's a great brand didn't mean a local property developer in Barcelona or in Istanbul or in Moscow has any clue what you're taking about because they're building buildings.
I used to go and talk to these old school real estate developers everywhere London or wherever and they would look at me like I was an alien and I would be showing them this cool video and how great the brand is and they had no idea what I was talking about. That education process had to happen and they needed to really find the people and discover the people that really connected with them.
The combination of they were too narrow in their focus on which markets and there wasn't people with enough passion to go out there and find the best partners. It was much easier for them to do a Sheraton deal wherever. When I did that and opened the mind up a little bit I think that's when it started to roll.
It became for me a constant challenge of trying to maintain the autonomy and creativity that very strongly allowed us with the realities of existing in a big corporate infrastructure. That became hard. I would also say, as a public company, you have a mission to grow. I think in one year I found and started 18 new W projects which is crazy. If you see and this is no disrespect to W because I think we built a great brand but if you see sometimes it makes a mixed bag of properties.
Some properties have a real cultural resonance and [there are] some that feel more mainstream. I think it's because we were pushed and rightfully so for the public company. We were pushed to grow very quickly and then by nature of a big company trying to be more efficient they centralized the operations so that the operations fell regionally instead of by brand.
So while we had this cohesive unit that was so exciting in the beginning, by nature of trying to run 50 of these things or whatever the number was 30. The more efficient way on paper and probably the more efficient way in reality was to rationalize the operations which to me lost some of the soul of what was originally there. I think those were the two struggles.
Editor's Note: Lalvani, along with another Starwood executive, Ross Klein, president of its luxury brands group, left Starwood in June 2008 to join Hilton in an unexpected move that would eventually result in a major lawsuit between Hilton and Starwood Hotels over intellectual property theft. Starwood alleged that Klein and Lalvani conspired to steal secrets from W Hotels to help Hilton create its own version of W, to be called Denizen. Hilton later paid $75 million to settle civil charges of corporate espionage, and Hilton had to agree not to launch or acquire a lifestyle brand like Denizen for a period of two years. It was veritable proof that the boutique hotel concept had indeed hit the mainstream.
2007: The Ace Hotel Portland opens
Weigel: No, there wasn't [this immediate plan to expand]. It was seven years until we did another hotel, from the opening of the Ace in Seattle. It was something that got a lot of press and it was really exciting for us, especially the Time magazine piece. It said something about "a chain waiting to happen." The press always makes something seem way grander than it is. Much more romantic.
I think we were too busy to start believing in the hype that was being written. We all had so many things going. We had thought about doing another hotel, but nothing ever really appeared. I don't think that anybody really wanted to run with these guys that did this 28-room hotel. We got a lot of press, but still, it was 28 rooms. Did they even know what they were doing? We didn't have a GM, we didn't have a CFO, we didn't have a CEO, we didn't have all those normal things that other hotel companies had. We had tried a couple smaller hotels and tried to raise the money for them and we were just really never able to do it.
We were going to start looking in Europe and we decided, "Well, let's go to Europe and do this. Let's do another Ace but let's do it in Amsterdam" is what we were thinking. Or Paris. That's when we hooked up with our partner Jack Barron. He was living in Paris at the time and he knew what was happening over there as far as real estate and stuff like that. He was actually going to take on that European hotel. He would run that hotel like Doug [Herrick, another Ace co-founder] did the Seattle hotel. We looked and looked and looked, and we actually never did find anything.
Then we actually had found the Ace Hotel in Portland and it was for sale. It was the old Clyde from that movie "The Old Drugstore Cowboy," in this seedy area at the time. We were trying to buy it. We lost it and the people who ended up buying it, that offered more money, were Saks. They bought it and they were big fans of the Ace. When they heard that we were looking at it, too, they approached us and said, "Hey, do you guys want to do this hotel?" It turned out to be a really great partnership. Those guys were the best landlords. The great thing about that is we still owned everything in it. It ran like a small business. We didn't have big operations, we didn't have all the powered staff.
After the New York Times article that came out for that, right at opening, all of a sudden, hotel developers were calling us and saying, "Hey, do you guys want to do something? Do you guys want to do something? Come look at this. Come look at this."
That's when we started the new company, Ace Hotel Group. That was just going to be a management company working with developers to manage other people's properties. The Seattle hotel and Portland hotel, we actually own those businesses. I still do. Myself and Jack and Doug, we still operate those hotels. The Ace Hotel Group doesn't have anything to do with those two hotels anymore. Only still the original owners do. We sold our rights to the Ace Hotel Group, which is owned by a Greek family. They run and have the rights to the name. We can use the name, but we don't actually own the name anymore.
Sawdon: It is the hospitality industry that we are in and it is about taking care of people and that has always been the number one biggest focus is like let's be hospitable, treat people as if it is a friend coming to stay with you. It is not about acting like you are their servants or it is about treating people as you would in your home and that is from when we opened Seattle all the way through to our latest openings in New Orleans and Pittsburgh, that continues to be the most important concept. We don't encourage our employees and don't allow our employees to be so laid back that they are not doing their job and taking care of guests. That is really the most important thing at the end of the day is that the guests feel like they are staying in the comfortable, clean hotel that feels like a friend's house that they are being looked after.
Bukstein: Yeah, and I think that one other thing on that note too is what I was hearing sounds like being messy and just shooting from the hip that would get us in trouble kind of a thing and I think that one thing to mention is that in some way it is because we didn't have experience and because we were younger and because like we were new in the industry, we had to pay more attention and pay more attention to detail and make sure the things we did were completely on point. Because of our ideas, we knew we had to act to keep them well because if we didn't then it would just be like oh, no one can stay there because the rooms aren't clean and this and that. We had to make sure that we didn't fall into the other...
Sawdon: We had more to prove, I think. For people in the industry it was we were a small company coming out of the Pacific Northwest.Our office grew from a creative team that were hard working people that were like producers in the film industry, you just have to figure it out. You have an idea and concept and you make it happen, roll up your sleeves and get involved in everything. Because we were a small unknown brand really at the time for most people in New York and most people around the globe, it was going into one of the toughest hotel markets and most competitive and going into a neighborhood that at the time really was under developed, underutilized, has amazing historical building stock but it was really a neighborhood that for the most part was ignored and forgotten about.
People would just drive through and saw it as a lot of costume jewelry shops and storage facilities or those types of industries. For us, it was having to really coming in as the underdog and really having to prove ourselves and show our partners and people in the market that we could play ball with them and that while we didn't have a single person on our team that came from the hotel industry from the side that we could play on the same field of all of those big players.
Bukstein: We were like this small hotel with a 28-room hotel in Seattle and 79-room hotel in Portland and we really thought of ourselves as a global brand even at that stage. That was something that came really directly from Alex, his way of looking at things that attracted Kelly and I, but it was fun to be in that position where it would take a lot of follow up to get someone to take us seriously and pay attention and then it would all be all about showing what our follow through was and then growing that way and now it has just changed a little bit too. Like there is still that element and it usually comes when we are trying to collaborate with people that wouldn't even think a hotel would want to collaborate with them.
It has changed a bit more to like now it is filtering through all the different requests we get and figuring which ones are the right fit but there is something nice about being there and being an underdog and I think we still look at ourselves as an underdog and try to find ways to make sure that the team is feeling that way because it leads to a lot better work in my opinion.
2009: The Ace Hotel New York opens
Weigel: I do think the New York hotel is extremely different than all the other hotels because of the large common space. We were so lucky because we were terrified of all that space. We're like, "What the hell are we going to do with this huge, massive lobby?" All we could think of was, "OK, we need a bar. We need this, we need that. We need coffee. What's going to fill it up?" Or you're going to walk in and you're going to feel like this huge vacant space that we hate. That we didn't want. We just tried put all these people together that we thought we could build this little community. We never even dreamed that hotel would take off like that. That's magical.
I do agree and I think the thing about New York and the thing about where the location is of that hotel, you got a little grit. When you go to New York, I'm sorry, you want a little grit. You have this gritty, off-the-chart neighborhood ... I mean, when we were building that out, sometimes I wouldn't feel comfortable standing out on the corner having a cigarette. Like "Oh my God. I'm going to get mugged."
Sawdon: I think it was a small 28-room hotel that the guys really didn't have any experience in the hospitality industry besides Alex owning the bar but really they didn't know what it meant to run a hotel. Early on, it was okay how to we make the dollar stretch further and on a small project like that if you are really involved in every tiny detail and decision and you are in there getting your hands dirty and being a part of actually building and creating that. That is really the same concept and same process that we had in Portland and then as we expanded and we were going from 79-room hotels to 275 in New York, obviously there is a different level of coordination. There is a different level of involvement that is required from more consultants than you would have on such a small hotel.
As we grew, we brought in partners that were like minded that were willing to take risks and to approach things from a design perspective that were unconventional and even a little risky like our project in New York. We spent a lot of time and money sourcing vintage pieces that took a lot of and that was a very strange concept for our development partners at the time and communed Roman and Williams the design firm we worked with on that project saw it as a great opportunity to really bring pieces into the hotel that had a soul and had history to them and being used and loved in their past lives. We continued to have partners from a design perspective that really are willing to continue to take risks that actually push us and get us out of our comfort zone and continue to. Those are the types of partners that we look for as we work on new projects if we are not doing them in house we try to find those types of design partners that are willing to take some real risks when they are designing with us.
Leondakis: I remember when Marriott launched Autograph Collection [in 2010]. That was a big moment because that was a signal that they really were going to be competing for the independently granted hotels. Then when we started hearing about all the other [big brands] ... Remember the big Starwood/Hilton/Denizen debacle?
Right around that time when the big chains were developing their boutique concepts — Indigo, Loft, all of these concepts. First W came as, I guess, a lifestyle hotel, then others followed. That was when we started to really see that the consumer was looking for this ... And it helped train the consumer that there are these alternative hotel experiences out there that aren't the sort of vanilla, predictable, not offensive to anyone but not appealing to anyone either. There was an alternative to that kind of hotel stay that was something unique and special and more of an experience. More of a reflection of a distinct point of view, whether it was Ian Schrager, or Bill Kimpton, or the interior designer or somebody, some visionary who had a distinct point of view, that these were much more interesting places to stay.
I think that coincided with where people, from a lifestyle standpoint in general, whether they were road warriors for their job as business travelers, or just occasional business travelers for whatever kind of work they do, the notion of work/life balance started to change. What balance meant wasn't about equal parts work and not work, or leisure, but integration. Integration of work and life. When people were on the road for a business trip they might add a day and explore a city, or take half a day and get to know the place they're visiting. Technology helped force that a little bit, but work/life integration as opposed to work/life balance coincided with this boutique hotel eruption or explosion in a beneficial way. People weren't looking anymore just for I want to know I'm going to get 24 hour room service and Wi-Fi that works and I can count on certain things because I'm on a business trip and there's no room for error, they were looking for more of an experience and something a little more inspired during their hotel stay because life matters, not just work and reliability, but something that was a little more creative and when they woke up in the morning didn't feel like they woke up anywhere and could be ... We've all had that feeling where you wake up in a hotel room like where am I today? What city am I in? You knew where you were because it was so distinct.
I think the confluence of those and some other things really helped elevate the boutique experience, and then of course another that came later. When the lending communities start ... When boutique hotels became more legitimate with the lending community, and it wasn't as difficult to get financing for boutique hotels. The lending community, initially, didn't really understand. Boutique wasn't really a legitimate segment.
I would say that's within the last 10 years we've started to see [lenders be more interested in developing boutique hotels]. I think what helps is having the Marriotts, the Starwoods, the Hiltons, the Hyatts, all launching their boutique or lifestyle products. That really created some awareness that there's something to this. One of the beneficial attributes of boutique and lifestyle hotels is when you're in a good economic environment, and you can drive average rates, in a boutique hotel, there's no limitation in the consumer's mind on what they'll pay for this brand of one. You can really maximize your average rate when the demand dynamics are in your favor. Whereas, if you have a brand, whatever that brand might be, a hard brand label on that hotel, there is a perception of a rate ceiling where you say I'm just not going to pay that for a fill-in-the-blank hotel, and so there's a limit on what you can do to maximize that average rate.
2013: Alex Calderwood dies unexpectedly of a drug overdose at the age of 47 during the early opening period of the Ace Hotel in London's Shoreditch neighborhood
Weigel: Well, I miss Alex [when asked if he missed anything about the early days of Ace Hotels].
Alex and I, we first met when we were just kids. We were boyfriends. We later became just best friends. We almost didn't have to talk when it came to any sort of business thing or ideas. I talk very jumbled, that stream of consciousness, in images. Alex was always able to translate it really concise and elegant. Some people will listen to me and say, "What did you just say?" I'd never have to say anything twice, Alex would ... or he could finish everything, "Oh yes, and do it white."
We just got each other. I hope that someday I'll meet another business partner that will have that magic that we create. I miss creating with Alex. It was really magical.
Chapter Five: The Lasting Legacy
In 2014, InterContinental Hotels Group announced it would purchase Kimpton Hotels & Restaurants for $430 million in cash. Today, the company has more than 60 hotels in more than 30 cities worldwide.
Pinetti: Today, there are 125 hotel companies that say that they are a boutique hotel operator. One-hundred and twenty-five. We did what we did so well that all these other guys copied us.
USA Today, a few years back, came out with an article highlighting the top 25 pivotal influences in the last 25 years. We were on that list. We were the only hotel company on that list, number six by the way. Right between roller luggage and the OTAs [online travel agencies].
We were on that list because we did three things. We created the boutique hotel concept. Number two, we paired it up with a chef-inspired restaurant, and number three we got credit for inventing or creating exhibition cooking at our third restaurant here in San Francisco. It's been a wild ride, but we were the guys [who were] there first, and it's very exciting and it's very exciting to still be the first in our industry, 35 years later.
Well, you got to hear what you got to think about. Big and boutique don't necessarily go together. An 800-room hotel with a lot of conventions that sells space, that calls itself boutique, I think that's more of a head fake, and I think they're basically, they're aware of our success and maybe some of the other boutique brands, but I think they're just trying to leverage into that space a little bit.
I think as far as milestones, I think the GDS was a significant milestone, we did that at every other boutique product benefited from that. I know search was a significant milestone for us and this web presence in general. I think a more modern day milestones for us is clearly social media.
We have some incredibly loyal followers, I guess, evangelists is what you would call them, that fortunately are very active socially. Just as being in the GDS was a boost, and being in the search was a boost. I think in the more modern time, if you look at what we're getting on Trip Advisor, what we get through social media.
I think that's the current, best to current opportunity for us for sure, to take advantage of. Really the only way we can take advantage of it is to keep doing our really great experience with our guests so that they're compelled and continue to post and tweet about us. The cycle doesn't ever change. The cycle is the cycle which is the tools we have available have evolved over time.
Leondakis: [Bill Kimpton] was a very humble person and he never wanted his name on the hotels. Like I said, in the early days the company was called Kimco, and we were just a management company. We didn't put his name on the hotels until after he passed. I think outside of the humility and not wanting his name on the hotels, I think he would be proud of the company that Kimpton became, because it evolved to a company that's still offered creativity and imagination in the hotels, each one unique and individual and doing the right thing for each investor group in each location, not a one-size-fits-all approach to how the hotels and restaurant concepts were developed or how they were operated to maximize the return on investment for those hotel owners.
It also stood for, in addition to doing unique concepts that maximize the potential of that real estate investment, the company also stood for and continues to do so today, being a great place to work for the employees. Offering lots of opportunity for growth and advancement and people have made careers out of that company, lots of people. The way it treats employees and offers growth and development to employees, personal and professional growth and development. I think he would be very proud of that.
A high level of personal service really mattered to Bill. He cared about customer service and customer comfort. I think he would be proud of the level of personal service that Kimpton Hotels provide, and the reputation for great service it has, I think he'd be very proud of that. I think he'd be very proud of the fact that his little hotel group sold for a $430 million price tag to IHG. In his wildest dreams I don't think he ever imagined that kind of a price tag.
Pisano: Yeah, I think a lot of people have looked at Kimpton and now they're trying to basically, more or less, copy the footprint. They want to get the opportunities and they think now it's great. In some cases, they're out there getting ... What's happening is you have this industry thing now going on with hotels. You have the small boutiquey hotels that are going after some local chefs. Then you have these big, what I call, Vegas-like hotels that are all going after the big name chefs that they want to have. You have your Wolfgang Puck and all these different people connected. Mario Batali and all that, that are connected to all these big, huge hotels that are happening. Here in Seattle we have had that happen a couple of times, with not a lot of success to be honest.
Seattle likes their local, home-grown chefs here. We've had, I don't want to name them all, but we've had a lot of celebrity chefs come and a lot of restaurateurs come over the years that I've had Tulio and that have left. There really hasn't been a lot of staying power here. From that standpoint, Seattle loves their home-grown. I think that's just general in the Northwest and possibly even in San Francisco. Yeah, there's a lot of boutique hotels out there. There's a lot of people trying to do that small restaurant feel to it. I think they're basically trying to copy it. Then there's that larger branch of hotels that are trying to draw the celebrity, big name celebrity chefs to their restaurants.
Ian Schrager's Legacy
Ian Schrager sold Morgans Hotel Group in 2005 and now, as the principal of his own eponymous firm, he continues to work within the hospitality space, developing new hotels with Marriott under the EDITION brand and his own company, including PUBLIC. Morgans Hotels Group was recently purchased by sbe in 2016.
Ian Schrager Interview
Schrager: I'm not big on legacy, frankly. The legacy is my children.
I like to think I've changed the industry, not only with the lifestyle hotel, but I think the entire industry has changed and evolved because of what we did, which is gratifying to me. I would like to do it again. Which is why I think I'm so hungry and ambitious. But legacy, I don't know legacy because I don't know, when I was growing up, Bill Paley, from CBS, I don't know if you remember him, but he was the one that started CBS with Edward R. Murrow, the news division, and he released the first long-playing record, we all know about the record industry. Not many people remember his name today. When I was growing up, he was bigger than life. So, you know about the legacy, it's just, you know, what I like? I like to be known as making a contribution, doing something different, carrying the baton a bit, and handing it off to the next woman. The only legacy is the children. That's your legacy.
Well, of course the most obvious [impact I've had on the industry] is the increased design to the willingness to break rules and throw out these accepted ways of doing things for many, many years and rethink them. The way we market the business model. And every, you know, people, when they think of us, don't think about the impact on the business model and the marketing, but we changed the business model and the profit margins because of the way we relied on the distinctiveness of product and with the distinctiveness of product, because it was special, you got a premium rate, and a premium in occupancy. And you had less marketing expenses because of that.
Lalvani: The spaces didn't look like hotels, they weren't lit like hotels, they weren't populated with people that would go to the traditional hotel. I would say that what was going on with the merger in a way between nightlife in the early days and hotels and that's when you look back in those days in The Paramount and The Royalton. These first initial ones were very much about bringing a party or bringing that type of nightlife and merging that with the hotels. I think we've moved a long way from there but I think what was happening in the nightlife business and the nightlife mentality and cultural evolution of the city is what merged with hotels at that time.
If you look back at The Paramount and The Royalton in particular, those always come to mind in that timeframe. You started to see the people populating those hotels and then you saw André [Balazs] with the Mercer in New York, I guess that was probably '96. That hotel lobby did not look like any hotel lobby that you had ever seen and it wasn't just because good design, it was because of the people that were hanging out there.
To this day since, the Mercer maintained that, and you could go in and this was why I talked about the nightlife business … One of the things you like about a great nightclub or a great bar or even a great restaurant is when you go in you see people you recognize and you see your crowd there and you see people that are interesting and that are like-minded. If you do that right it capitalizes it. It sort of perpetuates itself and there's a culture that's created around that. Those original ones were so good at doing that and it set off of itself and if you do that right, the design works, the people that work there, fitted so to speak, in terms of they're interesting or they're compelling, the people that go there are interesting or compelling. It becomes an ecosystem that lives and if you get that right it's pretty magical.
Walshe: I know the great fear has always been that the essence of boutique hospitality and boutique design could never be delivered with scale. I disagree with that.
If you think about the fact that the label "boutique hotel," from my understanding, came from Ian Schrager's company and when they opened a hotel and there was a quote that somebody said, "This isn't just a hotel. It should feel like entering a boutique." That's why people started talking about boutique hotels.
If you take the comparison to fashion, some of the most bespoke couture in fashion, which are pieces of absolute individuality, that are highly prized by very few people who are willing to pay a significant premium, come from brands like Louis Vuitton, from Gucci, from these sort of fashion brands. They're all part of extraordinarily large retail organizations, but within those organizations there's a commitment to maintain the integrity of the individuality of that particular product offering.
I think what Ian has done with Marriott in the creation and launch of the EDITION product is very faithful to the idea of boutique. The products are individually designed. They're very service focused. They've got vibrant food and beverage so they are a social culture in and of themselves. A social hub as much as a hotel. The flexibility within the public spaces and food and beverage spaces is phenomenal.
Do I care that it's Marriott that is the engine behind it? Should that be reason for us to say you can't consider the EDITION to be a boutique hotel because it's a Marriott hotel? No. I think it ticks the boxes and I'm, in many respects, glad to see that some of the larger companies are making a commitment to keep the idea of boutique hotel keeping alive because, ultimately, if that idea is the commitment to creating extraordinary guest experiences through highly individualized design and great service, then what could possibly be wrong with that?
Joie de Vivre's Legacy
Joie de Vivre Hotels comprises more than 30 hotels across the U.S. and is now owned by Two Roads Hospitality, the company most recently led by Kimpton veteran Niki Leondakis, who was just appointed to be CEO of Equinox Ftness Clubs in March 2017. Chip Conley remains a boutique hotel owner, and in the years since starting Joie de Vivre, he has also worked at Airbnb, helping the company develop its hospitality strategy. Today, he is an author and he also continues to serve as a strategic advisor to Airbnb.
Conley: I mean I think that the fact that we kept really ... First of all, we had an organizing principle that defined how we did business. Literally, it was such a successful one that ultimately I wrote the book PEAK: How Great Companies Get Their Mojo from Maslow based upon what we've learned and so the fact we had sort of a unique and iconic leadership approach that everybody in the company, 3,500 employees understood, helped us to have loyalty that was off the charts in terms of our leaders and our employees which led to having incredible loyalty from our customers and our corporate accounts.
I remember during the dot-com bust that 75 to 80 percent of our hotels were gaining market share and it's really unusual for boutique hotels in a severe downturn to actually gain market share versus a chain. The chains usually do better during a recession, just a broader distribution strategy. I think what it really said to us that we were pretty darn good at building great relationships within the company, external to the company, and ultimately that led to having really great relationships with our investors.
I think we're a very emotionally aware and intelligent company and that that served us well. Yes, beyond that, sure we created some really cool and interesting hotels and we competed across the full spectrum of customers not any singular demographic or psychographic.
Lastly, I think a hotel company can either be product line diverse or geographically diverse. I think it's really hard to do both. Holiday Inn was geographically diverse, and the product line standardized. We were geographically standardized, it was only California, and our product line was diverse so every single one of our hotels we thought of as a piece of art and different. Unlike Kimpton or Schrager that eventually chose to actually crank out multiple Monacos or Palomars, we said every single hotel's going to have its own name and be different and we were going to just own California. We became, by far, the largest independent hotelier in the state and I think that geographic specialization meant that we had a really targeted, focused and successful ability to market for the most iconic state in the union.
That worked to our favor. It was when John Pritzker bought my company, he hated that idea. He was like, "That's limiting and we need to go out and expand" and so towards the end of my time as CEO, we opened our first hotel outside the state which was in Chicago, Hotel Lincoln, and now the company has hotels elsewhere. I do think they actually lost something on some level because they've lost some of that local flavor. I'm a big believer that people want to live like a local as guests, they want to do that in boutique hotels as well as Airbnb and the more you expand to other markets, the less well you are acquainted with what's going to make for a really unique hotel in a particular market.
We had hotels in, at one time, in Laguna Beach, Long Beach, Huntington Beach, Venice Beach, Santa Cruz, and Big Sur. Six coastal markets in California, but each one was dramatically different than the other ones and that they fit the particular profile and part of the reason that I think we succeeded is because the locals within that market could see that the Shorebreak in Huntington Beach or the Irwin in Venice Beach were pretty different hotels and each one felt soulful and unique to its location.
Walshe: One of the people I think who picked up the mantle from those very early creators of the genre, a guy who I have an enormous amount of respect for, and have spent time with, is Chip Conley. I think that Chip then built on what others had done and thought not only was there an opportunity to take the boutique hotel idea and the boutique hotel genre, but to maybe take the luxury component from being a capitalized "L" to a lower case "l," and make the boutique hotel experience available in a more cost effective manner. I think that the portfolio that he built, particularly in San Francisco, showed that the boutique hotel approach was on that could be applied very successfully in a three-star, a four-star, and a five-star environment. Whereas initially those boutique hotels that came to market, the kind of the ones I talked about, the Blakes Hotel and the Royalton and others, were at the higher end of the price point. I think Chip was somebody who then took that to the next level of making it more appealable to and more available to a mid-market audience. He's somebody else I think has been profoundly influential. Somebody who has been extremely generous with his time and his views.
W Hotels continues to grow, and its portfolio is expected to grow to 75 properties worldwide by 2020. In 2016, Marriott International purchased W's parent company, Starwood, for a record-setting $13.3 billion, thereby forming the world's largest hotel company..
Barry Sternlicht left Starwood Hotels & Resorts in 2005, but continues to be active in the hospitality space as the founder, chairman, and CEO of Starwood Capital Group where he is focused on growing the 1 Hotels brand.
Kavanagh: Starwood became so emboldened by W and so fascinated with the success of this little brand that started in New York City that we brought this kind of perspective to all of our other brands. We thought "Wait, if we can do this at W, why can't we do this at Sheraton or why can't we do this at Westin or why can't we do this at the boring select-service phase?" So sometime around the year 2000 we embarked on this huge program to create what we called distinct lifestyle brands within all of our brands and to redesign our brands and take them out of the generic landscape that had dominated for so many decades. This is obviously something that has been often copied, and I think every hotel brand is in some way a lifestyle hotel brand today and I think that really does have its roots in the birth of W.
I think honestly no one has caught up. We're now how many years in? Eighteen years in and there is no boutique brand at the scale of W that has the global breadth that W. In a lot of ways, the industry hasn't yet caught up and it is a formula that maybe it seems like it's easy you can just walk into a hotel and see what's neat and try to copy it but there's a real formula, a real secret sauce to W that others in the industry have found it very difficult to replicate.
People started to realize this wasn't just a sea of folly probably in the early 2000s when we started to grow and started to grow globally and owners said I want a W here and I want a W there. Clearly there was demand for this and it wasn't just a demand in New York City, there was demand in all parts of the world. If you take a concept like W and it could be interpreted so brilliantly in all different types of global cities and environments.
One of the other problems we had with W was that owners said "I want a W in Topeka and I want a W in Wichita" — I don't know I'm doing all Kansas — "I want a W in Sioux City, Iowa, or whatever" and we realized that we wouldn't be able to financially create a W in secondary and tertiary markets, which is exactly what led to the birth of Aloft. We saw there was, obviously, this huge desire for fun and design and entertainment and music and sexy hotels, not just in major cities but everywhere that people traveled, and that really led to the creation of Aloft.
Petrone: There's an oxymoron called mass customization, which those two words don't necessarily fit together, mass customization is an oxymoron, it's not how you can customize an experience when you are talking about masses.
One of the lasting legacies of boutique hotels is they delivered a unique experience for everybody who visited them. For some people it was the spa experience. For some people the memorable experience was the dinner they had that night. For other people it was the great sleep they had on the W bed or the vibe they had when they had their conference there. Everybody had a sort of a unique experience there and this was very consistent with the admin of the Gen Xers and the Millennials, all of whom had grown up a little more spoiled than the baby boomers. Baby Boomers, like me, when we wanted coffee, we had two choices, coffee black or with milk. Now, Millennials and Gen Xers go to Starbucks and have a thousand different choices for coffee. When I was growing up, I would buy a CD or record with 10 songs on it. Now, Millennials they go and get an iPod with 10,000 songs.
Everything was customized to the Millennials, whether they wanted coffee or songs or ... We extended that to hotels. What do you want out of your hotel experience? We had a lot of memorable experiences, for example, the mention of the concierge department at the W is called Whatever, Whenever. We lived that creed, so whatever you want whenever you want it we will get it. We had some crazy requests. One woman was on her honeymoon in New York and she wanted us to fill her bathtub up with chocolate, so she could take a chocolate bath with her new husband, so we did that. All the newspapers picked up that story and we got a lot of — K.C. [Kavanagh] might have told you — we got a lot of great press at a W because we would really do some things that stood out, not something that Marriott or Hilton would have done, but at W that was common. We would customize the experience as embodied by the name of our concierge service, Whatever, Whenever. Nothing was too outlandish to request. As long as it was legal and as long as it was clean and healthy, we would do whatever the guest requested. Those were some of the great memories I had in addition to meeting some fantastic people, working with some great people.
Let's face it, it's fun being around creative people. When you are talking food and beverage, you're around some real creative chefs. Some of the best in the world. We partnered with Robert De Niro, the famous actor, because he had a chain of restaurants called Nobu and we had put Nobu in a couple of W hotels. How much fun is that? You are partnering with really, not because they're famous, but because there's reason they're successful, there's a reason they're famous. It's usually because they're creative, they're smart, they get it. Whether we were dealing with architects, world renown architects, or world renown designers or world renown chefs or world renown bar experts, like Rande, you get inspired and motivated by being around people who are the best in their game. If that makes sense, like if you love basketball, you probably want to hang out with Michael Jordan and ooze whatever you could off of him. If you like hockey, you probably want to be around Wayne Gretzky and pick up ... If you love fashion, you might want to be around some of the big fashion houses in Paris. In other words, and that's what it felt like at W.
One of the lasting legacies is that, you know, one plus one equals three. When you put all these good people in their individual fields together, the sum is greater than the parts. Right now, all the brands, 20 years later, they recognize that, Marriott, Hilton, Sheraton, they will recognize that the average daily rate at the boutique hotels — that's where the future was. That's where the Millennials, who I mentioned earlier, were spoiled; they wanted that. They didn't want to stay at a Hilton or Sheraton or Marriott, that was their dad's brand. That was too plain for them. That was too homogenous, too predictable. Now everybody recognizes that because the boutique brands get a higher daily rate, average daily rate, than the brand, in most cases.
Now I don't know if it has gotten to a point where it is saturated and boutique brands are not special anymore, but certainly, when I was there is was a great run in the boutique and I was in sort of the beginning of the boutique run and it was good for 10 years.
Khan: Oh, I think definitely the notion of the living room and the living room bar [is a lasting legacy from W Hotels]. Today, you can go into any little hotel, I mean there's so many in Manhattan now. Tiny little select-service hotels and they have all activated a social component of food and beverage in some way. They all have a bar, even if it's a tiny little bar. A lot of them now have rooftop bars. I think that was definitely something that came from that W effort or initiative, back in the day. I'd say that's huge.
You know, a hotel room is a hotel room and I know, certainly, trends in hotel rooms have changed. We had the moment where the bathroom was much more exposed to the bedroom. We've had this idea of a conventional desk going away from being a conventional desk to now creating workspaces where you can use a laptop and an iPad without a large eight-foot-long desk. I think those sorts of things certainly have had their place, but if I had to pick one defining thing, the first thing that comes to my mind is the W look.
Ace Hotels' Legacy
Following the death of co-founder Alex Calderwood in Ace Hotels in 2013, the company has continued to grow the hotel's portfolio, despite an ongoing lawsuit over the rights to Calderwood's ownership stake in the company. There are now a total of 10 Ace Hotels around the world.
Weigel: Ace Seattle's still there and it still is what it always has been. There's always really interesting people staying there.
My son is off to college and he worked there, prepping the rooms after the housekeepers do it. He'd prep the rooms or make sure the guests ... Everything in the room was just right for the check-in of the guests. He just fell in love with Ace. He was like, "Oh my God. This is so cool." He's stayed in them his whole life but actually working there and getting to deal with the people that stay at the Ace in Seattle ... it's pretty magical.
It's still really interesting people: musicians, architects, people from Vancouver, Portland that just love to come up and stay there and go out to eat, go shopping, hang out, party for the weekend. It's still a really magical place. I don't really feel like I lost anything.
Bukstein: I guess, for me, I have a little pet peeve about the industry kind of pigeonholing us as a Millennial hotel, like a niche in the hotel industry that says, "Oh, they need to figure out how to market to the Millennials and that is what they have been all about." I think that for Kelly [Sawdon] and I and for Alex [Calderwood] in the beginning, and I think for all of the people that work with us, we still look at this as like a creative project and something like completely unique for us, almost like a band or an artist would look at their music. I think that in some ways we want to be careful not to take ourselves too seriously by any means but it is also like we do this for the love of it.
I don't know if that is one thing I always wish came through more when people talk about Ace is like looking at the plenty of data out there that shows that like all the partnerships we do and all the people that we collaborate with and all the decisions we make that are based solely off it being a great experience and representing what our brand is all about rather than making extra money that I think is something that is really important to us.
Sawdon: Yeah and I would say that also, when we really got to a place that we wanted to focus on growing and expanding that is when we really started searching for, I think we spent a lot of time trying to find the right partners for every aspect whether it is people we collaborate with. But even in the industry, we were very selective and specific about who we wanted to bring in to help lead the charge especially from an operations standpoint.
In 2012, really finding [Brad Wilson, the current CEO of Ace Hotel Group] and knowing that he had the right sensibility and understood what we were trying to do as a brand and that he could come in and be a partner with us and really allow the things that were working and successful resonating to really continue to grow and evolve and not come in with these preconceived notions of who we were and trying to put his fingerprint on everything. He has been a great partner that Ryan and I have really enjoyed working with because I think he is really supportive and understands that while we don't come from the hotel industry or the typical route for people in the hotel industry that what we were doing was working and it felt fresh.
Bukstein: Yeah, I definitely want to echo that and I think it connects back to what I was saying too which is how the Ace brand really developed to crystallize what this brand was all about first and like the core values in what we are interesting in creatively and culturally and just like emotionally about our work and then Brad joined up based on that and has worked to help us all to grow that with that as still holding onto those core values where I think a lot of the hotel industry has started to see that there is money in what we do and maybe started to divert their efforts to creating like the millennials brand or whatever. It is just we reject that we are part of that because we feel like what we do is so different and not just like an arm, like a niche-off a hotel brand, and I think Brad has really understood that and helped to grow with that in mind.
Sawdon: I think, for us, we have put a lot of ourselves into [the hotels] and it has been a great, amazing ride and I think we come to work every day and are surrounded by really intelligent creative people that keep pushing us. We love it because it seems like a continuous educational process. It is exciting and we feel fortunate.
Design Hotels' Legacy
In 2015, Starwood Hotels added Design Hotels as its 11th hotel brand and now that Marriott owns Starwood, it's become one of Marriott's 30 hotel brands. The collection is now comprised of nearly 300 hotels worldwide.
Sendlinger: Every hotel that applied for membership [by the late 1990s, early 2000s], which had like a red sofa in the lobby, started calling themselves a "design hotel." When this becomes a potential burden to the brand, we firmly believe that good design is the beginning of every good product and experience in the 21st century. Then we need to look at the other things that really define our product, so for about two years we were looking for the right term to use but by then we had already received over 200 applications every year from hotels that wanted to join and we could have easily become a 1,000-hotel group, but then it would have diluted the portfolio.
So we said, instead of growing wider, and going for a business model like Mr. and Mrs. Smith or Tablet, let us rather stay deeper and stick to this model where we help hotels to not only distribute online but help them to position themselves and help them to make a difference in their destination. Help them with their brand, their communications, and their global sales activities.
So therefore we created this criteria about what a hotel needs to comply with in order to become a member in Design Hotels because the hotels were saying, Give us a book of standards about how you choose us. But it is very subjective because there is always innovation out there so if we create a standard on what exists, we might exclude the ones who are pushing the boundary even further. So I was able to convince them that we are going to create this culture in our organization that everybody who works in our company will learn how to judge a hotel by going through the lobby, listening to the music, talking to the managers at different levels, looking at the way they're communicating, looking at their Web presence, and so on, and this all together at the end of the day always points back to the person who initiates the project.
Many of these people who don't have a hotel background sometimes make the hotels a bit weaker in the classical service departments but on the other hand they make it so much more exciting on the experience side, the art side, maybe the food and beverage side, to learn more about the destination. I would say 90 percent of the owners are really movers and shakers in their neighborhood.
So the common denominator is really the originality of the creators, of the owners, of the investors. This is continually happening. The word that brings them all together is "originals." What everyone is looking for in this experience economy is this unforgettable moment, you know, and that why we came up with [the tagline] "Made by Originals." People with fantastic taste and when you think about a global chain. We can speak like a local in Seoul, or a local in Nairobi, or a local in Zurich. We can choose these people, the creative directors, who have made their neighborhoods into important destinations. And as the hotel becomes more and more important, the more luxury becomes accessible to everybody, the more the affluent traveler is searching for the hidden and secret spots, that's why we're well set for the future.
Walshe: I think boutique hotels have both changed and stayed the same. I think the true boutique hotel has the attributes that I talked about in that commitment to individuality, to design, to great service, and to guest recognition.
I think, in an ever increasingly competitive marketplace that boutique hotels have realized that it's really hard commercially to make it on your own. Boutique hotels typically were standalone hotels. Independent hotels or part of very small groups. They found themselves challenged from a distribution perspective. I think one of the interesting evolutions that came after the creation and launch of the boutique hotel genre was the idea of collaboration. We saw marketing consortia come together with the advent of groups like Design Hotels.
A true boutique hotel, especially one that had a reflection of modernity, or something that had a contemporary take to it, didn't fit comfortably with the Leading Hotels of the World. It didn't fit comfortably with Small Luxury Hotels. The established and marketing consortia. I think the industry kind of created its own. Again I think, the Design Hotels group of collaborative and independent hotels was one of those phenomena.
Then what I think we saw was people realized that the distribution of those hotels required specialist intermediaries. Now there's a very, very successful group of high end travel agencies and online, in particular, travel experiences that only talk to the boutique hotel segment. Here in the U.S., Tablet Hotels would probably be the forerunner. In Europe, out of London, it was a company called Mr. and Mrs. Smith.
The boutique hotel movement isn't just about the boutique hotel experiences themselves, but it's about connection to market. It's about the evolution of distribution and accessibility. I think that there's a customer out there who knows that they like boutique hotels, who's not willing to compromise on that individuality to go to the larger branded hotel experiences, and is looking for a purer form of communication and distribution that companies like Tablet and Mr. and Mrs. Smith have spoken to and have created. The boutique hotel movement is much wider than a hotel now. I think it's about the entire travel experience.
The Outsiders Have Now Become Insiders
Schrager: We were treated with such skepticism, because we were outsiders, and everyone used to think only people who wore black and lived in SoHo came to our hotels. So, it's sweet after all this time, to get this recognition.
Hanson: When budget hotels were new, they were kind of modern versions of old motels. People said, "That's not really the hotel business. Then when all-suite hotels were launched, again same thing, well those aren't really hotels, that's something else. Then conference centers. Then extended stay hotels. These new concepts kept being launched. Mostly by outsiders. Almost dismissed as "they don't compete with us." Sounds a little familiar when we talk about Airbnb these days, I think.
The boutique part was also dismissed and I remember being on panels where it came up in the questions in the panel after a speech. I remember people saying, "We don't know how big this will be. It's unlikely it can't get to be 5 or 6 percent of the supply." I remember really getting chastised, and being told, "You know people don't like these hotels. People don't like when they stay there. They don't know what the rooms will be like. They don't have a normal reservation system. Corporations with their negotiated rates will never have their guests stay in these because they'll have to negotiate these individual hotel deals. They won't know about safety."
What's so interesting today is when the brands will never share with you their proprietary research. Often I read there's no research on the following subject. Well, there's plenty of research. It just isn't published. The brands are going in and keeping it to themselves.
The brand research, and I've been involved in some of it, is that travelers kind of have two relationships with boutique hotels. I'll use boutique to include lifestyle hotels, though they're a little bit different in my view. There are people who only stay in boutique type hotels because they want a different experience each time. They don't want to see the same arch in a hotel room in New York as they do in Miami as they do in San Francisco, or Honolulu either. Then there are ones who have a really mission oriented decision. Meaning if I'm going on a business trip and I really need to not have to worry about is there a business center. Can I send and receive faxes if I need to dot this? Those kinds of things. I don't want to stay in a kind of quirky hotel. I just want a good basic hotel. Then for other traveler, they'll go out of their way for some kind of experience which often means boutique hotels.
There are very few people coming up in to the brand surveys that say I only want a very standard hotel, meaning every city the room size, the design is the same, the art is the same, the food and beverage outlets are the same and so on.
Boutique and lifestyle are — I'll just use the term boutique — have almost become the new, to use the economic term, taste and preference for consumers. Not that the old-fashioned brands and traditions will ever go away, but it's been a dramatic mix. If it used to be, when I said this will be 5 or 6 percent, if we look at the consumer taste and preferences, it's kind of like approaching 50 percent. It really is quite a transformation launched by these two organizations [Schrager and Rubell and Kimpton].
There were people like Barry Sternlicht, who again, didn't have the bias of what's the hotel industry like today. If someone graduated from a hotel school, any place in the world, they would have taught about what the hotel industry is. Frankly, not a lot about history is taught anymore in hotel programs.
You know, I think it was very easy for people to have a very time limited frame of reference. Someone like Barry Sternlicht, who was an outsider and frankly had the personal situation where he was staying in many of the world's great hotels, could maybe ... I never talked to him about it, but maybe he saw the same thing I did and returned to something that had been moved away from in the hotel industry with these great individual hotels. Yet, moved forward when he bought the race track REIT to launch sponsored lodging. You know, he had to find a way to grow a hotel company. Therefore, a brand. He saw this new thing.
He had Sheraton. He had Westin and Four Points. He had some things going but to really have a special effect on the industry ... It's easier to launch something new sometimes, than to try to reposition something that exists.
Marriott purchased the Renaissance brand thinking it could be repositioned to be Marriott's boutique brand. Again, the world had an image of Renaissance and there were existing hotels in the hallways, in the rooms, in the lobbies existed already. In creating W, it was almost like, we're not going to have the same people in the same place doing the same things. These will be new hotels. Even if they're conversions, we're just going to start all over with something, you know, new and different. It also, by the way, attracted a caliber of employees. It was dedicated to this unique, kind of, special service. These weren't just regular hotel jobs, this was in something really new, different and exciting.
Those three [Ian Schrager and Steve Rubell, Bill Kimpton, and Barry Sternlicht] to me, are the story. There are others, but they're the preliminaries to me. Others kind of went from there.
The Enduring Legacy of Boutique Hotels and Where They're Headed
Leondakis: I liken what boutique hotels have done for the hospitality industry to what Chardonnay did for the wine industry. If you go back, and I can't pinpoint when it was, in the '80s maybe, you'd have to do some research, I'm going back to remembering when my mother stopped ordering the house white and would say "I'll have a Chardonnay." When people got a little more sophisticated about ordering wine by a varietal, and a particular varietal that they understood, it elevated people's understanding of wine, and it just moved people into becoming more knowledgeable and more sophisticated wine drinkers.
I think boutique hotels have done a similar thing for hospitality in that they have elevated the consumers', the travelers', expectations of design. Back then, it used to be just "Wow design," like "Wow entertain me, wow surprise me, wow impress me." Now, it's "I want all that, but I want it to be comfortable." I think the traveler today has kind of moved past the "wow me," but "I want it to wow me and it better work." It better be comfortable, it better be functional.
I think boutique hotels have elevated the guest expectation of the overall hotel experience. They want great design, they want it to dazzle them and be supremely comfortable, and functional. They want power outlets where they're convenient, they want good lighting, they want great customer service. Boutique hotels, because they're smaller, have the ability to provide a more personal level of customer service that's more anticipatory than reactive. Boutique hotels have raised the customer's expectation of the service experience and they've also raised the customer's expectation of restaurants, bars, and nightlife. There's an expectation that I'm going to go to a hotel today, and I want to stay at a hotel that has a great place to have a drink or a meal, and I don't want to go to a hotel that has a three-meal coffee shop any longer.
I think the last piece is it has elevated the guest's expectation of relevance to its neighborhood, to its market, wherever it is, that I'm going to discover an experience where I am. Whether it's Tribeca, or it's the Financial District in New York, or the Tenderloin in San Francisco, or Union Square in San Francisco, or Fisherman's Wharf in San Francisco, or it's Lincoln Park in Chicago, or Brooklyn … these neighborhoods, that this hotel is going to give me a glimpse into the place that I'm visiting, and I'm going to feel like I'm there when I wake up in the morning and I'm staying at this hotel, I'm not staying at Anywhere, USA chain hotel. To boil it down, it's elevated the guest expectation of the hotel experience.
The experiences in boutique hotels have really influenced how people live their lives. People have these great hotel stays and, again with Westin and the Heavenly Bed, people wanting to buy that bed and bring it into their home, for example. Boutique hotels have done the same thing. People wanting to buy that lamp, or buy that mirror, or buy that bed throw and bring it in to their home, I think people have looked ... A lot of consumers with the rise of design in the '90s and 2000s, consumers looked to boutique hotels. I definitely learned this in research about women travelers in particular, for design inspiration. They took a lot of that inspiration into their own homes in doing their own home décor.
The same thing with, as chefs have over the last few decades risen, you know that celebrity chefs, they've become the rock stars of our culture today and now mixologists, people are bringing that into their life. Everybody is ... I want to say it differently, but look at Instagram. How many food photos get posted? Everybody's a foodie and everybody wants to take a piece of that lifestyle experience of having a great restaurant or bar experience and recreate that at home, or share that.
I'll sum it up by saying this: Boutique hotels have brought hotels back as being social centers in their communities. It was that way a long time ago. In the early '80s when I started working for Ritz-Carlton, whether it was Teddy Bear Tea at Christmastime or Easter Brunch in the ballroom, and even go back into the '70s, there was a period in time where hotels were social centers. You think of the grand dame hotels, where people went to celebrate something, they were social centers in the communities. Then in the '80s and '90s, nobody would go to a hotel restaurant as a local if your life depended on it. They were just horrible. Boutique hotels have brought back that hotel as a social center once again.
Lawson: I think where we've evolved to is, boutique hotels are the real deal. Some of the highest rated, most beautiful hotels across the country and the world are boutique hotels.
I think, besides the high design and this focus on having it be something that feels approachable and people feel like they're part of this community when they're at a boutique hotel, there's also this restaurant and bar scene that's really been evolving. Also, when you have a boutique hotel experience now, you don't have to forego any of the things you may have had to when it first came on the scene. All the things that you need, like if you're a corporate traveler in terms of technology, or amenities, it's the same with leisure travel, you get that now when you're at a boutique hotel. You don't have to go to the big brands for that.
It's really starting to curb the whole community of travelers no matter why they're traveling. I think it's evolved in the sense that the world is looking for different, more folk experiences. They want things that feel local. They want something where they don't feel part of a chain. They want to collect experiences as they travel around the country and the world and the boutique segment of hotels really feeds into and delivers on that need and that desire of the traveler in a way that other big brands cannot.
Whether that's whole neighborhoods, both in cities like Chicago and San Francisco and New York, but also for places like Milwaukee and Austin and Winston. I think people are kind of looking to this boutique segment of the hotel and restaurant industry frankly are kind of looking to us to set the pace on what's cool and delivering on that from a design, food, and beverage perspective.
Walshe: There were people who did boutique hotels because of their passion for great design and great service. Those hotels have survived and are still relevant today, in some cases, 20, 25, 30 years later. The original Morgans hotel, The Royalton today, the ones I've talked about here in L.A., the Blakes in London, they're still highly performing, very successful businesses today.
I do think that we got into a wave of hotels that opened after the initial success of boutique hotels who then decided the way to become successful was to try to be cool. They've typically not survived. A phrase we use at Viceroy is that if you go to a party, typically the least cool person in the room is the person in the room who is trying their hardest to be the coolest person. I think the danger for hotels is this: On the back of this boutique hotel phenomenon that emerged, it was about creating special vibe. It was about creating interactive service. It was about very highly personalized recognition. People misunderstood that and some people thought it was all about quirky design. People who designed hotels for the sake of design rather than designing hotels for the sake of guest experience. I think there were casualties along the way, but the people who got it right curiously are the ones who we've been talking about and they're still around today.
DeFrino: They expect a certain level of efficiency in service. We've set the bar a little bit higher. Now what you're seeing I think is a lot of the traditional brands that had been able to operate in a very narrow box for a long time are now having to become more design-driven. They're having to have better food and beverage. The rooms now have to have cotton sheets and interesting designs and big flat screen TVs.
I think what we've done is we've set the bar a little bit for everybody. We're now, at least in the U.S., probably globally, a good hotel and not just replicate a design. You can't do two of the same and you can't have a resort in Florida with pictures of hunting dogs on the wall. People are just a little less tolerant of that sort of generic hotel experience.
The big brands have reacted to it and are doing their best to sort of keep up. It's very hard. Like I said earlier, it's very hard to scale what we do. It's very hard to ... Since we are committed to non-replication, that just runs contrary to what a brand is charged with or a branded experience. Like I said, we're trying to brand the way you feel, not the product or a generic level of service or maybe programming around the hotel. Certainly not restaurant or bar. Each one of them has to be different and separate as far as location and target customer.
Depatie: I think the legacy is boutique hotels changed the one-size-fits-all brand standards, to have this exactly rigid approach to the hotel business. I think it's a new kind of luxury that's a little more, not about familiarity, but a little more relaxed standard and more authenticity. I think people are searching for this authenticity, searching for this human connection and people that are able to do that, a lot of them came out of that boutique hotel business, and so I think it's informing, generally, the rest of the hotel business. How far it goes, I don't really know, but it certainly has an impact.
The other impact being design, that you can let great design come in. Back in the day, when I first came to the company, Target was having designers come and design tea kettles and things like that. That's so cool. That's really great. We were just part of that, that people wanted and then ultimately went from wanting to demanding great design. Certainly Apple computers is a great purveyor of that. Great design matters, and so I think that's what's going on with the hotel business right now. If you could say a legacy, I think it's a call to be a little more authentic in the service standards. The other one is the design ethic that's coming into hotels.
Then maybe the other one would be restaurants. Hotel restaurants were getting a very bum rap certainly in the late '90s when these things started to take off in a big way. Back in the '60s and '70s, hotel restaurants were great. Then they were terrible. I think we're getting back to this idea that hotel restaurants can be terrific with a great chef. It can't be hotel F&B, but with a great chef, it can be a great restaurant that happens to be by a hotel.
I think what's going to be weird is that boutique hotel brands will start to really become more dominant. I think the endorser brands, the Autograph, the Curio, the Tribute, those will become much bigger collections because the underlying brand machinery is so strong and there's a lot of independent hotels that are going to need that extra help from a big brand distribution system, so I think you'll see those collections grow and become more understood and more accepted and more desired.
I think you'll see a probably continual move toward more design, more authenticity, more unique attributes in chain hotels, that they'll try to mirror with what they think customers want which they're getting in the boutique space. Then I think you're just going to see boutique brands, like a Kimpton, where IHG's in a 100 different countries because they have an opportunity to be a couple hundred room, a couple hundred hotel international brand that people know. I think there's probably a couple other up and coming, maybe it's a Virgin, maybe a couple of these brands that are going to establish themselves.
One thing that's kind of weird about boutique hotels, though, is it's hard to mix the brands. Like Virgin and Kimpton, you just couldn't merge them together. They don't go together. I think, for example, Two Roads now, which is Commune, Joie de Vivre, and Thompson — they don't go together. I mean you can't make the Joie de Vivre into Thompsons and you can't make Thompsons into Joie de Vivre. They just don't mix, so all you're getting when you merge the two together is some benefit from the back office and things like that. It's really hard to build a really large brand in this space. It takes time, and so that's interesting.
Kavanagh: I think that there's a little boutique in a lot of hotels. I think you see elements of boutique hotels in every hotel that you go to, even if it is off the interstate. There's a little something that owes a big debt to boutique hotels. I think a lot of the conventions of boutique hotels have become more commonplace which means that boutique hotels have to constantly keep evolving. I think that's one thing that the industry has gotten. If you're operating a W you can't necessarily operate on a traditional renovation cycle.
You have to keep things fresh. We would do seasonal refreshes and we would change the soft goods and we would change the pillows and we'd change various elements of hotels very often which is something very different. Everything changes so fast now and we all have so much access to great design all over the place that keeping that design edge and keeping ahead is really important.
Petrone: I stayed in a couple Marriotts recently and I spent the summer in Europe and Japan and ... you see boutique hotels everywhere. Everybody wants to do a boutique hotel, a boutique brand. They are popping up everywhere, which is great, I think. They're recognizing, that you've got to be special, you have to be unique, you've got to be fun, you've got to be ... It's not just a box where you're there for three days to have a corporate meeting. Even in the standard brands now, the Sheratons, the Marriotts, the Hiltons, you see their lobbies becoming more of a social hub and they are spending a lot of time and energy, and money making sure the spaces and environments are inviting to people.
From an anthropological point of view, humans like to be social. Even if they are in business travel they don't want to go up to their hotel room alone and watch a movie. If they can, they'd like to hang out. Starbucks has proved that. A lot of times, people go to Starbucks and hang out all day, sitting, reading emails, working on the computer or not even drinking coffee. The environment has to be inviting enough. We are social animals, we humans. I think Barry [Sternlicht] and other folks who were the forefront of the boutique brand explosion recognized that humans are social animals, but you have to build it and they will come. You have to give them a reason, create a space to make them want to get out of their room and go into the living room, as well called the lobby at W, or the bar and hang out and spend money and stay in your hotel and not go elsewhere.
I'm proud of my time [at W Hotels]. I'm glad of the experience I had. I have very fond memories, I learned a lot and I think it's still evolving and I think the technology is certainly taking it to a new level. I'm excited to see what the next 20 years will bring. Where people's iPhones will be their room key and how virtual reality may become a big part of the experience. I was in Japan this past summer and they have all kinds of different kinds of hotels there, from pod hotels to hotels totally managed by robots.
For me, I think in our lifetime we will see hotels in space. I'm just excited to see where all this goes and a lot of that is driven by technology, but I'm glad we were in the eye of the hurricane at the time. You don't realize what you are doing at the time, but then when you look back with the hindsight of time and the benefit of a little time and space you can look back and I had ... I feel very proud and very fortunate to been involved with that whole enterprise and that whole sort of brand. The brand explosion of boutique hotels 20 years ago.
Gerber: Well, I think that people like to experience things that are similar to their lifestyle or completely not similar to their lifestyle. Sometimes if you want to go to a hotel that's going to be completely out there with a great club maybe in it and other times you might want to go for that luxury in the Four Seasons. I think those are two things but I think the most important thing still today is the uniqueness of the food and beverage offering, because at the end of the day I'd say that every hotel whether it be a big hotel or a boutique hotel they all know now that they need a comfortable bed with comfortable seats, great showers, great towels, four different kinds of pillows. If everybody's offering all of that stuff inside the box why do you choose one hotel over another? At the end of the day we're told by the hotel companies is that the differentiating factor is the food and beverage and the public spaces. That's why people are making choices to stay in one hotel over another.
Lalvani: There was an energy and an excitement and it was sort of pioneering in what it was, and everybody thought [W] was the cat's meow and it was so cool and fun and enjoyable to be a part of it. I feel that with Standard, I feel that with Bunkhouse.
I think we're taking all we did to the next level in so many ways but now the differences are slightly more nuanced. There are a lot of things that we're going to take to the next level with Standard and Bunkhouse that the industry has never seen before and I'm excited to go there.
But there was this moment in time where it was everything, and it was the most exciting place and most exciting place in New York, opening people's minds and opening people's eyes to something they've never seen before.
To the outside observer, a hotel may just be a hotel and nothing more.
But it's clear the importance of boutique hotels, and their incredible influence on how we travel today, is immeasurable, as seen from the stories shared here.
Before boutique hotels, a hotel was meant to simply offer you a comfortable place to stay. After boutique hotels, a hotel was expected to offer you so much more: it became an experience, a change in the way you feel when you travel, and what you expect to have.
Nearly 30 years before the hotel industry's current big disruptor, Airbnb, boutique hotels were addressing an unmet need of ours: a desire to stay somewhere that was different and unique. To stay in places that reflected our personalities, or those lifestyles we aspired to have. To experience something we hadn't yet experienced before in a traditional hotel. Therein lies the power of boutique hotels.
How we got to where we are today is the culmination of the hard work of a number of people who simply thought differently. Big names like Kimpton, Schrager, Sternlicht, and Calderwood, and countless others who worked with them, too.
And, truth be told, while the stories in and of themselves are as unique as the hotels they produced, there are a few lessons to be learned here as well. Perhaps the biggest is this: The most impactful disruptors often come from outside, and their influence draws from the culture of their times — art, music, design, food. And they know exactly what we need, even when we don't know ourselves.
And that's something the travel industry, especially those in the hospitality space, needs to heed.
As Ian Schrager himself recently told Skift, "[Hospitality is] a ‘me too' industry, and it's unfortunate. I think they'll wind up getting into the same rut they were [in] 30 years ago, but it'd be a lot of different colors," he continued. "But it's a ‘me too' industry. Maybe because it's so capital intensive. I don't know why, but it's an industry that lags the cultural growth curve rather than leading it like the technology industry does. I think the industry is at a crossroads again. They were at a crossroads when I got started last time as well [referring to the early 1980s]. I think it's under siege."
So here we find ourselves at a crossroads yet again. But if there's anything the history of hotels, and the history of boutique hotels in particular, has proven, it's that the hotel industry is in a unique position to reinvent itself yet again — to take the building blocks of what was started with boutique hotels and to continue to evolve. And we, for one, certainly hope it does. — Deanna Ting
About This Project
Skift Hospitality Editor Deanna Ting, along with contributions from SkiftX Senior Editor Greg Oates, interviewed more than two dozen people who played instrumental roles in the history of boutique hotels spanning from 1981 to present day. In the process, they recorded more than 24 hours of interviews upon which this series was based. In addition to interviews, Skift collected archival materials from participants and institutions involved, and those items appear here with their permission. Additionally, we’ve included some external source materials to provide an even deeper context for what was discussed here.
To produce this feature, Ting was aided by members of Skift’s editorial, production, and development team. That team included (in alphabetical order):
Photo and Video Credits
The Clift San Francisco / Morgans Hotel Group
Morgans Hotel / Morgans Hotel Group
Bill Kimpton and Vincent Price / Kimpton Hotels & Restaurants
Mondrian Los Angeles / Morgans Hotel Group
Delano South Beach / Morgans Hotel Group
Ian Schrager’s Interview on “Here’s the Thing” with Alec Baldwin / WNYC
Mondrian Los Angeles / Morgans Hotel Group
Chip Conley / Chip Conley via Eric Luses/San Francisco Chronicle
Kimpton Journeyman Hotel in Milwaukee / Kimpton Hotels & Restaurants
Niki Leondakis / Two Roads Hospitality
Bill Kimpton and Vincent Price / Kimpton Hotels & Restaurants
Kimpton Gray Chicago Hotel / Kimpton Hotels & Restaurants
Kimpton Mason & Rook Hotel / Kimpton Hotels & Restaurants
Barry Sternlicht / Starwood Capital, 1 Hotels
W Paris – Opera / Marriott International
Ace Hotels founders / Ace Hotels Group
Ace Hotel New York / Ace Hotels Group
W Barcelona / Marriott International
Ace Hotel Portland / Ace Hotels Group
Rudy’s Barbershop and Ace Hotel Heritage Documentary/ Shan Nicholson on Vimeo
W Barcelona / Marriott International
W Maldives / Marriott International
Avalon Beverly Hills / Kor Group
The Standard, Hollywood / Standard Hotels
Bill Kimpton TV Interview from “Bill Kimpton Stories” presented by Kimpton Hotels & Restaurants
Avalon Beverly Hills / Kor Group
The Standard, Miami /Standard Hotels
Avalon Beverly Hills / Kor Group
The Dwell Hotel /Design Hotels
In Your Face Interview with Ian Schrager / SHOWstudio / YouTube
Ace Hotel Seattle / Ace Hotels Group
Avalon Beverly Hills / Kor Group
The Standard, Hollywood / Standard Hotels