Posh hotels bloom under dark economic clouds

Tag : animal prints
In total, the hotels contain about 960 rooms, though only theMontage is considered new construction. The others are renovatedand rebranded hotels that had pulled rooms off line for severalmonths during their overhauls.

The projects, either boutique or luxury offerings, were all plannedand funded when the economy was booming, only to reach completionnow, when nervous consumers are reluctant to spend money andtravel.

But analysts and hoteliers said demand has far outstrippeddevelopment. Room rates are still rising and the customers keepcoming.

"Los Angeles is one of the best areas in the entire country tobuild a hotel," said Alan Reay, president of Atlas HospitalityGroup. "It's that strong. These hotels will open extremely well andbe very profitable. People paying $300, $400, $500 a night arereally not worried about gas prices."

All four properties are in the West Los Angeles market, which is"historically healthy" with a track record of customers willing topay for quality, said Bruce Baltin, senior vice president of PKFConsulting in Los Angeles.

Hotels in that part of town had occupancy rates of about 75% lastyear with an average daily room rate of $298.50, Baltin said.Although occupancy is projected to slip a hair to 74% this year,average room rates are predicted to rise to $315, proof that themarket remains strong, Baltin said.

Last year, Los Angeles County had occupancy levels at 77%, anall-time high, Baltin said. Occupancy remains strong but is down acouple points this year.

"The challenge with building a hotel is that it takes years andyears and the exact environment you're going to open up in, youdon't really know," said Mike Depatie, chief executive of SanFrancisco-based Kimpton Hotels. "In the short term, it's a bit of arough sea. But everybody's investing in the hotel business for thelonger term."

Depatie said Los Angeles was a difficult city to build in --particularly in markets like Beverly Hills, Santa Monica and otherpockets of West L.A. -- because the approval process was long andtedious. Once open, though, the market is favorable.

"I think we've got a bit of a tiger by the tail with this hotel,"Depatie said, noting that Hotel Palomar was helped by its visiblelocation on Wilshire Boulevard in Westwood, a mile east of the 405Freeway.

The hotel has about 260 rooms, with an introductory rate of $249.It is a former Doubletree Hotel, but the rooms were largely guttedand redesigned. Aimed at customers from the entertainment industry,the property is getting much of its clientele from New York, with alot of business travelers. Splashes of turquoise and red enliventhe modern rooms; and animal prints run throughout the hotel,including Kimpton's signature animal-print, Turkish cotton robes.

At the all-suite London West Hollywood, on North San VicenteBoulevard near Sunset Boulevard, General Manager Vincent Mercuriosaid the hotel was seeing "pretty steady demand" headed into itsthird month of operation. The recent opening of British chef GordonRamsay's restaurant -- "Western European with subtle Asianinfluence" in Mercurio's words -- is likely to boost business.

"It doubles or triples the foot traffic and it's great exposure ofour property," Mercurio said.

Most of the guests, he said, were trying to mix business withpleasure. International tourism is also picking up -- and with Webrates starting at $249 a night for at least 750 square feet ofspace, the hotel is a steal for people used to paying double thatfor rooms in New York or Paris. The London West Hollywood is theformer Bel Age Hotel.

Like at the Palomar, business at the London West Hollywood is beingdriven by the entertainment industry, Mercurio said. "There was afall-off earlier with the writers strike, but we have a lot ofthese entertainment- and film-related production business," hesaid. "There's a draw here that I think is working in our favor."

The SLS at Beverly Hills, designed by Philippe Starck, is the firstin a new chain of luxury hotels imagined by Nazarian, chiefexecutive of SBE Entertainment and best known for Los Angeles hotspots Hyde and S Bar. The hotel, which is to open in August, willbe managed by Starwood.

Montage Beverly Hills -- a new property expected to compete in thehigh-end luxury class along with the Four Seasons and the PeninsulaHotel -- is scheduled to open in November.