Tuesday, October 09, 2007

State of the City's Hotels

Last night, we had the pleasure of attending the Urban Land Institutes's panel discussion on the current state of the hotel market. Why? Well, because we find it interesting. Especially when Ian Schrager's partner and right hand man, Michael Overington and the force behind the Dream Hotel, Jay Stein, are on the panel. While there wasn't much gossip, they had plenty to say about the New York City hotel industry. Below, a paraphrasing of what we heard.

Michael Overington:
At Ian Schrager, hotels are about giving the customer a personal experience. Their hotels have a soul, and design and service are their key to success. The company is currently looking for new opportunities in the City, but the insanely high prices [more on this below] has kept them from signing any deals. Neighborhoods under consideration: Hudson Yards, Lower Lower Manhattan, and somewhere in Brooklyn.

Jay Stein:
We have three star and four star properties. Our three star customers, we could really care less about. The three star guests don't matter. Our four star guests are the ones we like and need to keep as repeat customers. Repeat business is key. People don't want cookie cutter hotel rooms anymore. After many years of practice, we are ready to open big with the new Dream Hotel in the Meatpacking District. The cost of building was close to $1,000,000 a key.

That kind of attitude about 3 star customers drives us crazy. If we pay, treat us right, and make sure we want to come back. How can you trust the same person to know how to treat you at a four star level if they don't know that every paying customer deserves high quality service? You can't. As for Schrager, we don't know if that service commitment means the same thing to us that it does to them. As for new properties, Ian and Co. have always searched for bargains in hotel properties, and they are always willing to go far from established neighborhoods knowing his name will bring customers. But at $1 mil a room, even he can't find a place to go. For now. Lenders are still willing to lend, and with that Marriott deal all locked up, you can be sure he won't be sitting out for long.