Dec. 15, 2005 - The escalating battle for Chicago's luxury hotel guests intensified Wednesday as the upstart in town, the Conrad Chicago, hired away a top manager from an established heavyweight, the Peninsula Chicago.

Colm O'Callaghan, the No. 2 executive at the Peninsula for the past three years, will lead efforts to transform the upscale Le Meridien Chicago into a Conrad, a luxury brand just entering the Chicago market. Chicago now has four top-tier hotels: the Peninsula, the Ritz-Carlton, the Four Seasons and the Park Hyatt.

The former Le Meridien, a 311-room hotel at 521 N. Rush St., had struggled to establish an identity in the market. And the luxury field will get increasingly competitive in the next few years as a slew of luxury brands come into the market, among them the Mandarin Oriental and the Trump International Hotel & Tower.

"It's going to take some hard work to carve out market share," said Ted Mandigo, a hotel consultant based in Elmhurst.

O'Callaghan, 42, has 20 years of hotel experience, mostly in the luxury market. Prior to his stint as hotel manager at the Peninsula, he was executive director of food and beverage at the St. Regis in New York.

A native of Ireland, he grew up in the family business, a hotel in Killarney.

"I like to say, from lack of imagination I stayed in the hotel business," he said.

Conrad is a Hilton luxury brand, with a network of 18 hotels and resorts around the world, mostly overseas. The brand is being expanded in the United States.

In Chicago, the conversion will take place over the next few months, as amenities are added. Each room will have a 42-inch plasma-screen TV with an Internet connection, Pratesi linens and towels, espresso machines and a bedside electrical control panel that "will do everything except a manicure and a pedicure," O'Callaghan said. The cost will run several million dollars, he said.

The property also is expected to gain a high-end spa by L'Institut Guerlain, a French brand.

The hotel repositioning began last month after the property was purchased by an investment group led by Chicago-based Lodging Capital Partners LLC.

Terms of the deal were not disclosed, but people close to the deal estimated it was in the upper $80 million area.

[email protected]

-----

Copyright (c) 2005, Chicago Tribune

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected]. Singapore:M04,