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Two New Hotels in Downtown Miami, Kimpton's 400 room Epic and Kor's 162 room Viceroy,
Bracing for a Much Tougher Business Environment than Anticipated
y Douglas Hanks, The Miami HeraldMcClatchy-Tribune Regional News

March 18, 2009 - As club music bounced from poolside speakers, guests at the Viceroy Miami's recent opening party could watch an elaborate light show 50 stories down: red and white ribbons of car lights from Brickell Avenue's rush hour.

The distant scenery served as a reminder that no boutique hotel has ever reached these heights in South Florida -- atop a high-rise in downtown Miami.

Viceroy and its fellow upstart, Epic Miami, offer a white-collar take on the open-shirt ethos of South Beach's boutique hotels. They're targeting business travelers looking for the stylish setting of a boutique but within the more sedate environs of Miami's office district.

"I think it's people who don't need the South Beach scene, who don't want to go to the clubs all night," said Michael Doneff, vice president of marketing for Kor Hotel Group, the Los Angeles-based hotel company that runs Viceroy. People "who are more comfortable in a little bit more urbane, sophisticated setting. It's not everyone."

Epic and Viceroy's timing probably could not be worse, as businesses cut back on travel and scrutinize expense accounts. They're replacing more affordable hotels -- the Epic stands on the old site of the once-decrepit Dupont Plaza hotel, and the Related Group's IconBrickell condo complex -- home of the Viceroy -- replaced a Sheraton.

The cutbacks are hitting the luxury hotel segment particularly hard, and both hotels are bracing for a much tougher environment than they anticipated. Kor CEO Brad Korzen said he expects Viceroy's revenues to be off as much as 30 percent from projections made before the autumn's financial crash.

The hotels' fortunes will test not only their business plans but Miami's larger goal of transforming into a Manhattan South -- a sophisticated metropolis admired for its urban offerings and not just the beautiful scenery and clubgoers found on the nearby coast.

"You could be looking down here at dusk and you'd think you were on Madison Avenue or Michigan Avenue," Epic marketing director Eric Jellson said from the hotel's 16th floor pool deck, with a rare view straight down Brickell. "Nobody since the Dupont was here has been able to see this view of what our city has evolved into."

But just as the condominium craze brought too many pricey apartments for the market to sustain, some worry hotel developers were too eager to pursue luxury travelers with new properties. Even before Epic and Viceroy, this decade saw hotels remake downtown's staid lodging market, with a Four Seasons and Mandarin Oriental planting their five-star flags within blocks of each other on Brickell.

"I don't know that there was room for another luxury hotel," Hyatt Regency sales director John Visconti said of Epic, which opened across the street. "I don't know if it's the right product at the right time."

When nightclub impresario Ian Schrager relaunched the Delano in 1995, the oceanfront hotel cemented South Beach's status as the leading edge of the boutique-hotel trend. Boutiques are loosely defined as small hotels with no national brand. But the term also gets used for hotels leaning more on design than the kind of marketing muscle and loyalty a major hotel chain like Hyatt or Intercontinental brings to a property.

Of the two newcomers, the 400-room Epic -- run by San Francisco's Kimpton Hotels -- attempts a more traditional take on the stylish Miami hotel.

Its sweeping lobby projects serenity, with infinity-edge pools and white-rock walls stretching 30 feet into the air. Richly stained woods and muted fabrics reinforce the hotel's refined version of boutique chic, as do the fedoras worn by bellhops at the front door.

Not so with 162-room Viceroy, the third incarnation of the Kor brand and the first outside California. Seating options in the lobby include a sky-blue day bed and a chair studded in marble mosaic. The look comes from Kelly Wearstler -- Korzen's wife, who reworked the Tides on South Beach (another Kor hotel) and is a regular judge on Bravo's Top Design reality show.

She wanted the Viceroy's rather narrow lobby to resemble a jewelry box, while the Club 50 lounge off the sky-high pool deck hints of Easter eggs, with pastel colors and plush oval chairs.

"One is Zen and one is Versace," Rolando Aedo, vice president of marketing for the Greater Miami tourism bureau, said of Epic and Viceroy.

Rooms at Epic and Viceroy start at between $250 and $300 on weekends next month, well above the $169 rate offered at the Hyatt and roughly in line with the $375 rate found at the nearby Four Seasons, according to prices posted on the hotels' websites for the first weekend in April.

Rates at the Delano start at $500 in April, then quickly approach $1,000. Miami Beach hotels generally charge more than their mainland counterparts: in January, the average beach rate of $230 a night was 21 percent higher than in downtown.

Both new downtown hotels face each other on opposite banks of the Miami River, but the condo towers and office buildings crowd most waterfront vistas. But the hotels see Miami's growing restaurant and nightlife offerings trumping the traditional allure of South Florida's coast.

"I think that during the daytime, seeing the beach and the water is a lovely thing," Epic's Jellson said. "But if you're in a meeting all day, you never see the beach and water. And you go back to your hotel room, and it's a dark hole.

"If you're staying downtown and you're in a meeting," he continued, "then you go back to your room and see the city come alive."


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