Urban Inns.

New boutique hotels market attitude, style as they target the young business traveler who wants a chic yet affordable alternative to the big corporate chains

A different type of hotel is rising above the crowded L.A. lodging scene.

Boutique hotels, shunning anything chainlike or ordinary, are transforming what formerly had been rundown properties throughout the area.

They're not your father's hotels. Geared to the young business traveler who wants something different, yet functional and affordable, these properties are marketing attitude as much as comfort.

Owners of intimate inns such as Beverly Hills Maison 140, Luxe Hotel Rodeo Drive and the Avalon feel that if they make staying in a hotel almost an extension of a person's lifestyle and taste, even the most discerning customer will return time after time.

"I think that people want a residential experience when they stay in a hotel," says Brad Korzen, CEO of Elkor Realty, which owns the Avalon and Maison 140 hotels. "Our guests want something unique and comfortable that they haven't experienced before. They want to feel on vacation even though they're working 10 to 12 hours a day."

Elkor renovated the former Beverly Carlton, a property that had fallen far from fashion and profitability. Now, its 88 rooms have been converted into the Avalon, mid-century reverent in design, chosen by Conde Nast Traveler in 2000 as one of the 36 best new hotels in the world. Rooms mix Eames-style chairs and wild 1960s bubble light fixtures with high-tech accessories like Nintendo game consoles, high-speed Internet access and fax machines.

In August, Elkor opened Maison 140, formerly the Beverly House. Interiors break traditional notions of hotel design: Vibrant wallpaper patterns share space with dramatically painted rooms (the hallways are black); rooms are furnished with art and vintage pieces culled from Paris and Palm Springs. No pastel-colored, cookie-cutter corporate hotel furnishings here.

"Each room has a unique design, like a great room in a magazine. It's not what they've seen before, but as soon as they experience it, they love it," said Korzen.

Although 80 percent of business travelers nationwide prefer to stay with a brand-name hotel, according to a recent Travel Monitor survey, the remaining 20 percent are being aggressively targeted by independent hoteliers and entrepreneurs.

"The majority of the world wants to buy a brand for predictability and convenience," said Peter Yesawich, a partner at Yesawich, Pepperdine & Brown, which researches and publishes the nationwide YP&B/Y ankelovich Partners Travel Monitor survey. "But that other pocket of demand is pretty resilient and seems to be growing a little bit. Those are the people that say, 'All the other products look alike, and that's not for me.'"

Entrepreneur Andre Balazs plans to open a version of West Hollywood's Standard Hotel in downtown Los Angeles this fall. Balazs also owns The Mercer in Manhattan's SoHo district and the venerable Chateau Marmont on the Strip in West Hollywood. The Standard boasts an 87 percent occupancy rate, well north of the countywide average of 74 percent in 2000.

Younger business traveler

"We're aimed at the younger business traveler, and there is no product in the downtown market that appeals to that traveler," says Balazs, who contends that his hotel will be convenient, sexy, and interesting. His firm is completely rehabilitating the 12-story former Keck building at Sixth and Flower streets, turning it into an urban resort, with 200 large rooms (350 square feet and up), a spa, two restaurants and a rooftop bar, deck and pool.

Balazs isn't concerned about the glut of hotel choices downtown, although he concedes that the dearth of downtown visitors during the weekend may be an issue.

"Part of the beauty to our positioning is that we feel that our product is so different from anything available," says Balazs.

Marketing for the hotel will combine word of mouth, press, traditional sales and positioning the hotel as an affordable and chic alternative, a destination unto itself, which is also a good place to do business. Room rates will start at $95 a night.

"We're not industry targeted. We're after an age and attitudinal market segment," Balazs added.

Most area hotels large and small are corporate franchises or held by large real estate investment trusts. For the boutique owner, competing with these well-known brands means offering twists in both style and front-desk attitude.

"The hotel is very, very different from the usual hotels I stay in," said London-based businessman Jonathan Blyth, an executive with the BBC, when reached at his Maison 140 hotel room. "It seems a lot friendlier than a lot of these bigger hotels."

When traveling on business, Blyth is most attracted to rooms that are comfortable, to places where "I can feel fairly happy and can relax with friendly service," says the executive.

In addition to the Avalon and Maison 140, Elkor Realty owns the Estrella in Palm Springs and is in the process of renovating Santa Monica's Pacific Shores hotel. Elkor purchased the block-from-the-ocean, 170-room hotel for more than $26 million and plans to spend another $14 million to renovate the property.

Scheduled for a 2002 completion, the Santa Monica hotel will remain open throughout the transformation.

Price competition

Competitive rates are a key to L.A.'s boutique hotels' international appeal. Korzen maintains that Maison 140 provides value, with rooms priced from $150 a night (including continental breakfast), compared to the minimum $415 per night room rate at the Peninsula across the street.

At the 88-room Luxe Hotel Rodeo Drive, which opened in September, the feeling of a very well decorated home away from home has been carefully cultivated with residential-style furnishings and a friendly, well-trained staff. After a year long, $15 million renovation, the hotel is a quiet refuge in the midst of Rodeo Drive's frenzy. Room appointments are luxurious with Frette linens, European chocolates at turndown, and high-tech touches such as direct dial, cordless phones.

But an excellent hotel product isn't always enough. Worldwide online reservation access to the hotel was a priority for hotelier Efrem Harkham. "We had to make it easy for people to find us, book us, and get a confirmation," he said.

Harkham, recognizing that online reservations were giving the big chains an advantage over boutiques, decided to address that situation. So his company, Luxe Worldwide Hotels, now operates a reservations center that services 220 domestic and international boutique properties.

Harkham has also courted travel agents that service the corporate luxury market. "We take care of travel agents and pay their commissions within 72 hours of their clients' checkout," points out Harkham.

A few of the larger chains, such as Starwood's W Hotel in Westwood, are copying the boutique concept with a goal of attracting a more affluent traveler.

But as Andre Balazs remarks, the hotel industry is rife with copycat efforts. He said that by making his new hotel unique, efficient, playful and comfortable, he expects it to appeal to people "across the board."