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The Honolulu Advertiser
Posted on: Friday, June 15, 2007

Marriott will develop boutique hotel chain

Hawaii news photo - The Honolulu Advertiser

Gramercy Park Hotel in Manhattan is one of Ian Schrager's boutique hotels that offer amenities not found elsewhere. This Private Roof Club and Garden has a retractable roof 16 stories above the city.

PRNewsFoto via AP

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Hawaii news photo - The Honolulu Advertiser

Ian Schrager

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Lodging giant Marriott International Inc., which operates in Hawai'i under its own name and other brands, has struck a deal to develop a boutique chain designed by Ian Schrager, the entrepreneur known for his style-driven hotels.

The agreement is intended to give Marriott a presence in the boutique segment of the hotel industry, which it has been unable to crack even as rivals like Starwood Hotels & Resorts Worldwide Inc. have found a lucrative vein with brands such as W.

For Schrager, the hotelier who was behind hip properties like Morgans Hotel in Manhattan, the deal provides a new platform for his hotel design. In the new partnership, Schrager will focus on designing, marketing and branding the hotels. Marriott will operate them under long-term management contracts.

As is now standard in the industry, the hotels will be owned by third parties, who will pay fees to both Schrager and Marriott. Marriott declined to disclose the financial terms of its deal with Schrager.

Marriott and Schrager, who developed the concept of smaller, stylish hotels 23 years ago, yesterday said they plan as many as 100 hotels under the brand, which has yet to be named. Each will range in size from 150 to 200 rooms.

The initial hotels may be built in major U.S. cities like New York, Los Angels and Las Vegas. Other potential global locations include Paris, London, Tokyo and Beijing.

The partnership with Schrager represents an attempt by Bethesda, Md.-based Marriott to enter a fast-growing segment in the hotel industry.

Boutique hotels tend to be relatively small, feature stylish and plush designs, and provide more services than a traditional hotel. They also are usually much more expensive.

Chief Executive J.W. Marriott Jr. said the new brand "allows us to use our global platform and ability to create something completely new, different and original — the first truly global branded boutique lifestyle hotel on a large scale."

Schrager co-owned the New York nightclub Studio 54, but later served time in prison for tax evasion. He founded the first boutique hotel in New York in 1984 with former Studio 54 partner Steve Rubella. The style has since been copied by larger hotel chains, including Starwood Hotels and Resorts Worldwide Inc.'s W hotels.

Marriott, one of the world's largest hotel companies, already operates under brands that include Marriott, Ritz-Carlton and Courtyard.