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At a Renovation Cost Exceeding $125,000 per room, the Former
 Marquis Prepares to Reopne as the Hotel Zoso in
 Downtown Palm Springs

By Kimberly Pierceall, The Press-Enterprise, Riverside, Calif.
Knight Ridder/Tribune Business News

Nov. 10, 2005 - Hotel Zoso lacks a famous hotel surname, like the Marriott or Hilton, but it's aiming to be a haven for the hip and the leader among Palm Springs hotels when it opens Dec. 1.

The hotel's location is ideal -- a block from downtown Palm Springs and about two blocks from the newly expanded convention center. That is reason enough for Hotel Zoso to be the rate leader in an area steeped with price declines during the summer, industry leaders say.

"It's going to attract many more younger people -- younger people with money," said Robin Gans , co-producer of a weekend party that attracts more than 10,000 women to Palm Springs and coincides with the annual Dinah Shore golf tournament. She reserved the 163-room hotel at the end of March for attendees who purchase the group's VIP luxury event package.

"We really wanted to offer (attendees) a step above what we've offered them before," Gans said. "It's not your typical corporate hotel."

The hotel's delayed opening, originally slated for September then moved to Dec. 1, led to rumors of financial trouble and a possible for-sale sign.

But the only thing holding up the hotel's opening, company officials said, has been the construction of two new restaurants by the Patina Group. The restaurants are the first venture in the Inland Empire for the Los Angeles-based company. Hotel Zoso officials want the hotel done before guests arrive.

"We're going to do it right from the get-go," said general manager Les Utley.

He said renovation costs have exceeded $125,000 a room, or more than $20.4 million. Being a 4-star hotel in a 3-star city could be a feat for Hotel Zoso with its higher rates, said Ed Svitak, president of the Palm Springs Hotel and Hospitality Association and vice president of marketing and sales for the Palm Springs Riviera resort.

"It's not that they can't do it," Svitak said. "It bodes to be a big challenge."

Palm Springs' hotel market is healthy, but still not comparable to the likes of Orange County and San Diego.

Palm Springs' average daily rate this year is $118.90, according to Smith Travel Research, a leading hospitality statistics firm. Occupancy levels, though, still hover near 62 percent through September, close to 10 percentage points below San Diego.

"It's a new, fresh property, and if they can find the demand, we wish them all the best," Svitak said.

On any given February weekday during the peak tourism season, Hotel Zoso's rates are $289 for a standard room and $319 for a suite. On the same February dates, the Hyatt Regency Suites Palm Springs -- in the middle of downtown with similar amenities -- has rooms for $189.

Hotel Zoso's rate matched the Hyatt Grand Champions in Indian Wells, a resort hotel with a spa and golf course.

Hotel Zoso will commandeer the higher-end hotel business, said Alan Reay with Atlas Hospitality Group in Costa Mesa.

The hotel's past life wasn't so optimistic. Formerly the Marquis, the site was home to a bankrupt hotel no one wanted. In 2002, the hotel's owner filed for bankruptcy, citing mismanagement and the crippling effects of 9/11.

It took the bank 15 months to find a buyer. The Las Vegas-based USA Capital investment group paid $9.8 million for the property, and will spend millions more to renovate the hotel.

Today, Hotel Zoso is seen as a precursor to a new Palm Springs -- a hip, technologically savvy hotel in the middle of a city still hanging onto it s 1950s Hollywood glamour days.

If the snake-skin chaise lounges in the lobby and red-leather accents in the rooms are vague clues, the 42-inch flat-screen televisions and free wireless Internet in every room makes it clear who Hotel Zoso is trying to reach -- a young, hip crowd.

And if that crowd upgrades to a suite, they can plug their iPods into the hotel's stereos and lounge by the pool's bonfire.

"We're not locked into any niche or any pigeon hole," hotel manager Utley said.

Hotel Zoso could eventually become a part of Palm Springs' familiar nomenclature and history, illustrated by two walls of photos Utley points out in one of the hotel's hallways -- on one side, images of 1950s Palm Springs, and on the other, the city's present-day counterparts.


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