Ian Schrager is plagued by a lifelong curse. Whenever he’s involved with a project, he can’t help but obsess over every single detail. For a perfectionist like Schrager, there’s always room for improvement. “It’s not a gift, it’s a curse,” he insists.
Sitting at the head of a conference room table in his New York City office in the West Village, Schrager admits to a visitor that he has made mistakes in his nearly 30 years as a boutique and lifestyle hotelier. Through his new brand Public, which debuted in October 2011, with the transformation of the Ambassador East Hotel in Chicago, Schrager intends to correct his missteps.
One of those mistakes, he says, was not having a brand name. “There was no reason not to have a brand,” says Schrager, who sold his company Morgans Hotel Group in 2005 to form the Ian Schrager Company. “I thought if I put a brand on something, people would think I was selling out. But as long as each property has integrity, it doesn’t matter.”
Schrager and his late business partner Steve Rubell introduced the boutique hotel concept to the world when they opened Morgans Hotel in New York City in 1984. The explosive growth of boutique and lifestyle hotels since then has created what Schrager describes as a “Frankenstein monster” in the industry. Schrager’s launch of the Public brand satisfies his desire to create a new genre of hotel, offering luxury service and a comfortable, stylish setting at an affordable price. He sees Public as a reimagining of the hotel space that is shared by successful brands like Courtyard by Marriott and Hilton Garden Inn.
“Instead of fitting into an existing category of hotel, we’re doing our own reimagining of it, taking the best from all the categories that are out there and rolling it in and making a new kind of product,” Schrager says. “How about being in a less expensive hotel and having just as much sophistication as a luxury hotel, and having really great service and having all the exciting food and beverage concepts? That to me is a new idea, a new class of hotel.”
He seized the opportunity to offer a less expensive product with mass-market appeal. “People are very much into value,” he explains. “I don’t think it’s about the cycle of the economy we’re in. I think there’s been a paradigm shift.” Schrager cites Apple as a big inspiration behind this strategy. “Steve Jobs brought this great looking, elevated experience to the masses. That’s what we want to do in this space.”
When Schrager chose the Ambassador East Hotel and its storied Pump Room restaurant as the first location for Public, he knew the project would be a challenge. The iconic property was built in 1926 in the heart of Chicago’s Gold Coast neighborhood, and in its heyday played host to celebrities such as Frank Sinatra, Marilyn Monroe, Elizabeth Taylor, John F. Kennedy, Dustin Hoffman, Led Zeppelin, David Bowie, and many more.
Schrager was aware that a lot of New York business people have gone to Chicago and failed, and he used to think Chicagoans would be gunning for a New Yorker like him. He recalls how enraged many city residents became when the Chicago-based Marshall Field’s department store chain was acquired by the New York-founded chain Macy’s in 2006. But after having spent more time in Chicago, where his wife, former ballet dancer Tania Wahlstedt, is from, he developed a better understanding of the city and its residents.
Draws to the 285-room hotel for guests and locals alike include the Pump Room and its new food concept by world-renowned chef Jean-Georges Vongerichten. By day, the Library houses a coffee bar, and at night it transforms into a lounge and bar. A candlelit backroom off of the Library doubles as a screening room, where original performances, poetry readings, and video installations can be held.
“Going into an icon that if I didn’t do the right way I would have been run out of town on a rail was fun for me,” Schrager says. “I think we did something that the people of Chicago embrace. If the people from the city you’re in don’t embrace and support that hotel, it can’t be successful.”
OUT ON THE ROAD
In the past, the perfectionist in Schrager caused him to sit on a new project for three or so years until it was stabilized and successful. Because of this, he believes his products became “a candy store for everybody else in the industry to come in and appropriate.” To avoid a similar fate with Public, he plans to quickly roll out a lot of properties. “I want to get out there fast,” he says, “before it becomes adopted by everybody else.”
Schrager already has two properties in the works in New York City. In spring, developer Durst Fetner Residential expects to break ground on a 600,000-square-foot mixed-use tower, just south of Herald Square, that will be anchored by a Public hotel. Schrager also is working on a second new-build Public in downtown Manhattan, but he declined to share specifics on the project. Both projects will take at least two to three years to complete.
There are faster opportunities with converted properties, such as the Crowne Plaza in London that the Ian Schrager Company won a $119 million bid for in October. A conversion such as this one will take about 14 to 18 months to complete. “We’re so into development and taking this idea and turning it into a silk purse, that it takes time for us to convert,” he says.
Schrager says his company is being aggressive about taking this new idea “out on the road.” He is already looking to expand the brand in cities like Miami and Los Angeles, and is open to international opportunities as well. Over the next 10 years, he’d like to open 15 to 20 Public hotels.
Having a fully integrated company, which owns, develops, manages, and brands hotels, as well as residential and mixed-use projects, provides a real opportunity to achieve product distinction, Schrager says. “And the hotel business is all about product distinction—nothing else matters.
“It’s not about the marketing, and it’s not about the finance, and it’s not about the reservation system,” he continues. “It’s all about having the best product out there and everything else seems to take care of itself. That’s our priority and that’s our culture.”
LESS IS MORE
Schrager says his hotels were never about design, but rather the attitude and DNA of the product. Instead of focusing on the visual surfaces, it was more important for Schrager to forge an emotional connection with travelers, and to be innovative. “The tool of design is to be used to create a really simple, elegant, understandable product that resonates with people—not because we like the chandelier,” he explains. Hotel design has greatly improved compared to 30 years ago, but Schrager says properties are all beginning to look alike again.
For Public’s design, Schrager opted for a restrained and understated approach, not wanting superfluous elements to obscure the essence of the product. His longtime design team, headed by Anda Andrei, spearheaded the pared down, purist look of the brand. “To me, less is better,” he says. “And it’s harder to do something simple.”
He quotes Leonardo da Vinci, who once said, “Simplicity is the ultimate sophistication.” Schrager strives to emulate that notion. Looking forward, he believes the hotel industry needs to return to the basics when it comes to boutique and lifestyle hotels. “Instead of looks and things that can be labeled, you have to instead rely on old-fashioned good taste and personal style, which is timeless and classic,” he says, “and you purify that by making it as simple as you possibly can.”
In December 2010, Schrager sold his interests in the Gramercy Park Hotel, which he had purchased and renovated in collaboration with artist Julian Schnabel in 2003, to focus on creating Public, as well as a new luxury brand.
The luxury brand, which has a name but will not be announced until Schrager finds a first location, is a smaller market than Public. Schrager sees the space currently dominated by brands like Ritz-Carlton, Four Seasons, Peninsula, and Mandarin as one that is ripe for innovation. While he says those brands are state of the art, he wants to create a luxury hotel he desires to stay in.
“It’s not that they don’t do a good job and it’s not that they don’t offer luxury service,” he says, “but it’s not something that emotionally connects with me. And I think there’s an opportunity there as well.”
The luxury hotels will have between 75 to 150 rooms and appeal to a new generation of travelers who can now afford and want luxury, Schrager says. And it’s not the definition of luxury that was dreamed up half a century ago. “We all demand updated products in retail and cars and every other aspect of our life,” he says. “Why not in our business? Why are we still doing things that worked for our parents and grandparents? Why aren’t we doing something for a new generation of people?”
A REPUTATION AT STAKE
When Schrager is involved with a project, he views the product as an extension of himself. “If it’s not well done or well received, it makes me look bad,” Schrager says. “I don’t care how much money it is, you have to do a great product and the money takes care of itself. I don’t know if everybody thinks like that in big business, but that’s the way I think. As long as I’m involved, to my dying breath, I will try and do as best and good a product as I can.”
Despite recent obstacles, Schrager remains fully committed to his partnership with Marriott on its fledgling lifestyle brand, Edition, which first debuted in Waikiki Beach in September 2010, and later opened in Istanbul in February 2011. The brand made plenty of headlines over the summer when Marriott lost control of the Waikiki Edition in August 2011, after the hotel’s owners and affiliated partners installed new management, changed the locks, and renamed it Modern Honolulu. This occurred a few months after the owner filed a lawsuit against Marriott and Schrager claiming that the Edition brand was represented as a fully supported new lifestyle hotel brand in the Marriott family of brands, but that it turned out to be a “nonexistent hotel chain.”
To prevent Marriott from retaking management, the owner filed for bankruptcy, freezing any other legal orders for the time being. Marriott said it would pursue tens of millions of dollars of claims for damages to the brand and its company in bankruptcy court over time. In October 2011, Tim Miller, managing director and senior vice president of Edition, shared Marriott’s plans to relaunch the brand using corporate funds. The Edition website lists properties “coming soon” in London, Miami Beach, Mexico City, Bangkok, and Barcelona.
“They’ve shown their commitment to the brand by making several purchases,” Schrager says. “They have a lot invested reputation-wise and a lot invested capital-wise. They haven’t bought hotels in many years and they bought a whole bunch of hotels in major markets now for us to do. So they’re really committed to it and so am I.”
It’s no secret that Schrager thrives on dreaming up new ideas, from his famed nightclub Studio 54 in the late 1970s, to a throng of successful boutique and lifestyle hotels, to residential properties 40 Bond and Gramercy Park North. With his two new brands, Schrager finds it even more exciting because he can revitalize the hotel concept again. “I still love what I do,” he says. “I’m not interested in just executing.”