Boutique hotel trendsetter Ian Schrager on serviced apartments and airbnb

Piers Brown By Piers Brown
Uploaded 16 June 2016

Ian Schrager is the man widely acclaimed to be the original creator of the boutique hotel.

The ex-nightclub owner and co-founder of the groundbreaking Morgans Hotel, one of the iconic hotels that helped propel the boutique hotel movement back in 1984, he's highly respected for his foresight and continual innovation in hotel design and guest experience.

I remember being surprised to hear that Bill Marriott had convinced Schrager to work alongside the Marriott behemoth to launch the Edition lifestyle hotel brand a few years back - if it worked it would be a masterstroke by Marriott, which was craving to reach out to a design, attitude and experience-led guest. Many, including myself, were sceptical at the time, not based around their respective business acumen, but the ability for a true entrepreneur respected for creating a burgeoning hotel category, to work in harmony with a large hotel operating brand known for a more conservative approach.

The industry needn't have been concerned as five years in to the collaboration, the relationship is envied by Marriott's competitors. The partnership continues to be based on the growth of the brand and successful roll-out of some stunning hotel and restaurant spaces over the last few years.

Numerous accolades and awards have followed, and the Edition brand is regarded as the 'jewel in the crown' by many. The food and beverage revenues have been healthy too, with The Berners Street Tavern at London's Edition being the highest grossing revenue restaurant throughout the whole Marriott portfolio - I'm sure the prowess of world renowned chef, Jason Atherton has been instrumental too.

So, when the 69 year old Schrager talks, people listen and they listen to every word. This is exactly what happened when Schrager addressed the boutique and lifestyle hoteliers at the BLLA conference in New York last week.

Schrager highlights serviced apartments

Speaking to interviewer CNN Money's Vanessa YurkevichIn, Schrager touches on his new found love of serviced apartments ,and that he likes what he sees, with a glint in his eye - the hospitality sector takes serious note.

He's surprised serviced apartments aren't more popular in the U.S. "Serviced apartments never took hold in this country, but it does very well in Europe and in Asia but for some reason it doesn't do well here. It's not the rental pool where you buy something and sell it. It's a real home and a real hotel. Makes living in the apartments completely effortless with room service, maids. It's just a great way of living. Everything you want and everything you need."

Schrager's probably not aware of the size of the various markets (the US corporate housing / serviced apartment sector is markedly larger than any other), and there are acute differences in definitions and the level of consumer understanding for serviced apartments across the world, but one thing's for sure - his timing with hospitality trends has always been spot on.

"I'm working on 215 Chrystie a really cool serviced residential building in the lower east side, downtown Manhattan," says Schrager. The 215 Chrystie project is his third collaboration with British architect John Pawson and Swiss architects Herzog & de Meuron 

"Airbnb is coming after our children"

Schrager cited some strong opinions on Airbnb, having experienced the lodging service in Miami. These were at odds with Hilton CEO Christopher Nassetta and Marriott CEO Arne Sorenson who seemed to discard any thoughts that the short term rental lodging incumbent is having a detrimental effect on the hotel sector at the CEO 'coffee talk' press session at NYU Hospitality Conference earlier in the week. 

 "Airbnb is a major, major threat and I can't believe how many in the hotel industry are in denial about that," Schrager continued, "they (Airbnb) are coming after our kids. It's to provide a unique experience. They can't do that. You (hoteliers) provide a fun, elevated experience. That's not something that Airbnb will be able to do," Schrager said.

He added, "I have stayed in an Airbnb. I wanted to see, you know, what it was like. I'd gone through all the stages, with companies saying it was for Millennials - which was wrong. They [Airbnb] want to be in the hotel business. They want to provide chefs … they want to provide house cleaning. They want to provide everything we provide. It's really disruptive to us, and we can fight them and it's good, but you're not going to be able to stop them. I think the way we can compete is we need to have an elevated experience."

What did he think of his Airbnb in Miami? "I was staying in a house of somebody that was after my kids so I didn't enjoy it. I just wanted to see how easy it was to get in there. It's not the same thing (as a hotel). It doesn't have the same graciousness and hospitality that we in the hotel industry have. It's a really major, major threat. More of a threat than the OTAs (online travel agencies) are to the hotel industry."

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