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Morgans Hotel Group Plans to Leverage the
 Iconic Delano into a Nationwide Brand
By Douglas Hanks, The Miami HeraldMcClatchy-Tribune Business News

Sep. 19, 2006 - The Delano has dropped plans to add 70 rooms across the street from its oceanfront South Beach property, a senior executive said.

Instead, parent company Morgans Hotel Group will open a more affordable hotel there at 17th Street and Collins Avenue, its fourth South Beach property.

"We should have different experiences at different price points for different audiences," said chief branding officer Tim Miller, a former general manager at the Delano.

To that end, Morgans plans to push rates even higher at the Delano, one of South Beach's priciest hotels.

This summer the company launched the first major redesign of the Delano's 195 rooms since Philippe Starck created them for the renovated hotel's 1995 debut by nightclub impresario Ian Schrager.

Morgans hopes to leverage the iconic hotel into a nationwide brand. The company, which went public in February, plans a 600-room Delano in Las Vegas and is opening new versions across the country of its best-known hotels. Last month, it announced plans for a South Beach Mondrian, named after the company's high-profile Los Angeles property.

Its latest addition -- the former Plaza South group home -- would give Morgans its fourth South Beach property, and its first one off the water. The Plaza South has 77 rooms, and Morgans has preliminary approval from Miami Beach to add 16 more as part of a rooftop addition.

"They're believers of the South Beach market," said Scott Berman, a hospitality analyst for PricewaterhouseCoopers. "Their followers are typical South Beach-goers."

But while the Delano once set the standard for stylish, celebrity-friendly hotels attracting top rates, it now faces competition from the Ritz-Carlton, Setai, Hotel Victor and the Shore Club, which Morgans manages but does not own.

Though its $474 average room rate led Morgans' other U.S. properties, it was second-to-last in terms of room-revenue growth, up 9 percent last year.

The move to renovate the rooms, create a basement lounge and improve the spa is designed to satisfy big-spending travelers at a hotel often tagged as stylish and hip, but also lacking in five-star amenities and comforts.

"We just feel as we grow the Delano as a brand, we want to bring it up a level," Miller said.

Morgans hired designer Tim Andreas to add a "splash of color" to the Delano's notoriously stark white-on-white rooms. The bathrooms also are being reworked to give guests more space. The changes should be finished in time for December's Art Basel festival, when hotels command top rates.

Starck has signed to design the interiors for a rival hotel announced for the old Ritz Plaza, across the street from the Delano.

But Miller said Andreas will pay "homage" to Starck's look while still updating it. Starck's whimsical lobby -- with its oversized furniture and two-story drapes -- would remain, as would the basic theme he brought to the rooms.

"When you say Delano, people think white. We want to keep that," Miller said. "The lobby is all Philippe, and we'll leave that."

Miller's comments on the Plaza South property represent an about-face for Morgans. As recently as last month the company told investors it was using the Plaza South building at 1690 Collins for "new guest rooms at Delano."

A Morgans spokeswoman said Monday that other Morgans executives were not available to comment on the Plaza South plans. In an e-mail Monday following his Saturday interview, Miller said decisions regarding the Plaza South "have not been finalized."

"Although one of our original considerations was to somehow incorporate those rooms into Delano, we are looking at other options so as to keep the Delano experience all inclusive within its existing footprint," he wrote.

The hotel also discussed moving its small rooftop spa to a larger space there, allowing it to beef up its offerings for that increasingly popular guest diversion.

But Miller, who rejoined the company in June, said he argued against the move. Dividing the hotel on either side of Collins Avenue would defeat the Delano's "barefoot chic" ethos, where shoeless guests can walk from their rooms to breakfast to the beach without a worry.


Copyright (c) 2006, The Miami Herald

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