Amid the flashy cars and nightclubs of the Sunset Strip, the Art Deco-style Argyle Hotel stands as a monument to refinement.

Erected in 1929, the elegant 64-room hotel is a throwback to another era in Hollywood, when John Wayne, Marilyn Monroe and other stars called it home.

The Argyle’s new owners are spending about $1 million to upgrade the hotel, hoping to capitalize on the building’s storied past. But compared with other old hotels around town, like the Regal Biltmore and Regent Beverly Wilshire, the Argyle’s owners face an additional challenge with just 64 rooms, it’s tougher to make their nut.

At a major hotel, for example, the salary of a high-paid concierge can be spread out among several hundred guests. At the Argyle, the cost is spread out among much fewer paying customers.

At the same time, prices at the Argyle are on a par with other luxury hotels in Los Angeles, ranging from $250 per night for a studio to $650 for a townhouse suite.

“The economics of a hotel with those few rooms are very difficult. There’s a lot of cost for the revenue you can generate,” said Chris Bonbright, president and chief executive of Ramsey-Shilling Co., one of the dominant real estate brokers in the West Hollywood area.

Lesley Carey, the Argyle’s director of sales and marketing, disputes that assessment, saying that large hotels “are always chasing the customer to come back” and that smaller places like the Argyle can do a better job of getting repeat customers.

But first, Carey acknowledged, people need to know the place exists. The real problem, she said, is that many people still believe it is a private, members-only hotel.

In the 1970s, the Argyle fell into disrepair and was threatened with the wrecking ball. It was saved by the St. James Club, a members-only hotel chain based in London, which bought the property in 1986 and spent $47 million to fix it up.

But the investment turned sour, and in 1994 the St. James group sold the Argyle for about $8 million to the Morgan Stanley Real Estate Funds.

Last October, a Taipei, Taiwan-based investment group organized as the Argyle Corp. bought the four-star hotel for around $16 million, said Elliot Eichner, managing director of Sonnenblick-Goldman Co., which represented Morgan Stanley.

“The way we’re competing is, we’re going after creative business clients. To get the rates we want to get, we have to have appointments, we have to reinvest on an ongoing basis,” said Jim Jablonski, general manager of the Argyle for Richfield Hospitality Services Inc., which manages the hotel for the owner. “We have to be fresh and luxurious.”

Occupancy was running just below 75 percent in late July considered strong in the industry but Jablonski said he expects that to increase to at least 80 percent in the late summer when business travel picks up. He declined to disclose revenues, but said they have been increasing in the past year.

Because the St. James did such an extensive renovation reconfiguring the apartments into suites and furnishing them with reproductions of original Art Deco pieces and carpets that were woven-to-order in Europe the current fix-up is more of an enhancement, Carey said.

The plan is to invest $1 million in the coming months to spruce up the guestrooms, lobby and restaurant. An exterior restoration will follow next year to return the fa & #231;ade to its original silver and gray.

“I think the architecture of the building is very special. It helps in its appeal. It’s the only building of its type on Sunset. A lot of people like to be associated with that,” said Carlos Lopes, who heads L.A.-based Unique Hotels & Resorts.

Bonbright noted the Argyle is also blessed with a great location, near all sorts of amenities. “It’s got a lot going for it, it’s unique and historic and has a wonderful aesthetic,” he said.

Of course, the classic hotel does stand out on raucous Sunset Boulevard, home to L.A.’s rock ‘n’ roll club scene. It’s a far cry from the nearby Hyatt on Sunset, which some dubbed the “Riot Hyatt” after bands like Led Zeppelin made it their home away from home.

Tony Melia, a founder of the West Hollywood Convention and Visitors Bureau, said the Argyle actually fits with Sunset’s eclectic mix.

“This piece couldn’t find a better home,” Melia said. “It’s appropriately different.”

Architect Leland Bryant designed the hotel, originally called The Sunset Tower, as a luxury apartment building in 1929. Now listed on the National Register of Historic Places, the exterior features floral friezes, mythological figures and other geometric ornamentation. White plaster palm trees that light up at night frame one side of the pool, which has a view of the city to the south.