|By Kathy Bergen, Chicago
TribuneMcClatchy-Tribune Business News
Jan. 21, 2007 - Playing king of the hill is a slippery game at the highest reaches of the Chicago hotel business, as long-running champion Four Seasons discovered when the Peninsula opened in 2001 and charmed its way to the top.
And now a bevy of potential challengers are waiting in the wings, with names like Shangri-La, Mandarin Oriental, Trump and Elysian.
With these luxury names, and others, expected to debut here in the next few years--and with Gen Xers moving into the driver's seat--the Four Seasons is shelling out $30 million, with more to follow, to dramatically update its classic Old World look.
In its first significant redesign, the 18-year-old property in the 900 N. Michigan building is seeking a sleeker, more cosmopolitan image it hopes will resonate with young affluent travelers without alienating established Baby Boomer customers--a tricky balancing act, indeed.
"I'm sure their intention is to knock the Peninsula back and to regain their premier position," said Mark Eble, regional vice president/Midwest for PKF Consulting.
"It's a common story," said Gisle Sarheim, senior associate with HVS International. "Existing luxury hotels, when faced with new luxury properties, will go ahead and redefine themselves."
The remake "is not in response to other hotels," said Hans Willimann, general manager at the Four Seasons, which remains open during the overhaul. "We'd have done it whether they were here or not. We just see what's in demand.
"Traditional beauty no longer appeals to the thirtysomething traveler--it might appeal to their parents."
Not that the Four Seasons is shedding its conservative, tradition-infused skin. It's not.
But the transformation will be striking to patrons familiar with the 19th Century English decor in the 281 guestrooms and executive suites and the lobby. Those areas are the first to get the new look.
Gone will be the sunny yellow floral drapes, with their tassels and fringe, in the suites and guestrooms. Gone will be the rosy upholstered chairs, the swirly floral wallpaper, the ornithological and botanical prints in gilt frames, the dark wooden pedestal tables with empire chairs. And gone will be the standard televisions encased in dark wooden armoires.
In their place will be a French Art Deco look from the 1930s, with sleeker, cleaner curving lines and more muted color palettes--a remake by HBA/Hirsch Bedner Associates that will be finished in late April.
Some rooms will have a "warm" scheme, incorporating beige, caramel, chocolate and rust colors, while others will have a "cool" look that uses oceanic blue, silver and taupe. The artwork will be Cubist, and the TVs will be 32-inch plasma screens perched atop credenzas with crotch mahogany veneer.
21st Century bathrooms
The bathrooms will be more 21st Century, completely clad in creamy Spanish marble, with dark cherry modern vanities topped with brown Italian marble, and polished chrome faucets. Glass doors will replace shower curtains, now considered terribly passe.
The French Art Deco look--with softer lines than American Art Deco--will extend to the lobby, which will be finished in about a month.
The decision to stay within a historical period, rather than go ultramodern, was deliberate. Traditional touches, such as the 59 crystal chandeliers and elegant flower arrangements, will remain.
"We have such a reputation of what we stand for," said Willimann. "We couldn't go and gut the place. We had to be true to the guests who enjoy who we are, and expand our customer base to today's customer."
As well, "we didn't want to replicate what's already in the market," he said. "Our intent is to be who we are--somewhat conservative, but modern."
The dramatic shift carries an element of risk, but it is a risk the Four Seasons had to take, observers said.
The Four Seasons operates within a rarefied competitive set that includes only a handful of Chicago hotels: the Peninsula; the Ritz-Carlton, also operated by Four Seasons; the Park Hyatt; and on the edges, the Conrad and the Sofitel.
Within this small world, the bar is continually raised. The Peninsula, for instance, recently redesigned its spa, its meeting space and the decor in its Avenues restaurant. "We're constantly updating our product," said Maria Zec, the general manager.
In recent months the Peninsula Chicago has continued to pile up accolades, being named top hotel in the United States in the Zagat 2007 survey and in the Conde Nast Traveler Readers' Choice Awards.
The Peninsula has "sort of eaten Four Seasons' breakfast a little bit," said Eble, of PKF.
Beyond the accolades, the Peninsula has slightly outperformed the Four Seasons on business metrics, he said. Toronto-based Four Seasons Hotels and Resorts runs and partly owns the property, whose majority owner is Chicago-based JMB Realty Corp.
"The Four Seasons needs to, at least, have the recognition that their customer is a new generation that probably responds to different cultural icons, and guessing which one of those is right is the magic," he said. "If they guess wrong, it's hard to fix, and superexpensive."
Another risk, said hotel consultant Ted Mandigo, is the possibility of "turning off the traditional customer when you court the avant-garde."
And there are other challenges. For instance, there are limits to what you can change in an existing hotel in which certain structural realities, such as plumbing, must be accommodated, said Sarheim, of HVS.
"Now, very often, consumers might have more elaborate and elegant bathrooms at home than in some older hotels with fairly confined and small bathrooms," he said. "A lot of new hotels have bathrooms that are almost the size of the guestrooms.
"And views are very important," he said. "If you can open up the bathroom, and allow daylight, that's a real luxury for consumers, and hotels are desperately trying to incorporate that in the design."
At the Four Seasons Chicago the bathrooms do not have views, but all the guestrooms look out on the lake or the skyline. And Willimann said the hotel is blessed with strong existing structural design.
Overall, the hotel's redesign "is a move in the right direction," Sarheim said, noting that it is in line with what the Four Seasons chain is doing nationally and with what some other hotel companies are doing or contemplating doing.
"The Gen X generation is becoming more and more active as consumers, and they typically spend more than Baby Boomers, which is why luxury chains are eyeing them," Sarheim said.
And the Four Seasons chain has a strong track record of reading the market, Eble said.
"These guys are the New York Yankees of the hotel business," he said. "No one even comes close in terms of talent."
The changes at the Four Seasons Chicago come during a strong point in the economic cycle. The ultraluxury downtown hotels had a 73 percent occupancy rate for the first 11 months of 2006, up 6 percentage points from the same period in 2003, according to Smith Travel Research. And the average room rate was nearly $325 in the period, up from about $255 in 2003.
And Willimann, the general manager, was brimming with enthusiasm about the remake on a recent afternoon.
Sound of drilling
Standing in a remodeled suite, the native of Switzerland, who has led the hotel since its birth in 1989, smiled at the sound of drilling and hammering on distant floors.
"I've been waiting for that sound for four years," said Willimann, with a sweeping view of Lake Michigan at his back. "It's like music."
The 'music' occurs only only from 9 a.m. to 5 p.m. Monday through Saturday, and guests are informed of the construction prior to booking. Those who want daytime quiet are referred to the hotel's sister property, the Ritz-Carlton.
And the 'music' will continue. After the $30 million first phase, focusing on the lobby, guestrooms and executive suites, the Four Seasons will redo its ballroom, starting in December and finishing in February 2008. After that it will focus on the 62 larger suites and long-term rental apartments, and food and beverage operations. A timetable and cost estimate for the multiyear plan has not yet been finished.
"Everybody changes their shoes and their suits," said Willimann. "And to be a luxury hotel, regular renovations need to go on."
Copyright (c) 2007, Chicago Tribune
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