When John Arnett became president of Kor Hotel Group in 2002, he was charged with turning the Los Angeles company into a leading boutique hotel operator. At that time, Kor only owned two Beverly Hills boutique hotel properties: the 43-room Maison 140 and the 86-room Avalon. Arnett worked to build a brand that appeals to in-the-know travelers. Today, the company owns and manages 13 properties, including the Viceroys in Santa Monica and Palm Springs, and its reach has extended beyond the L.A. area to Florida’s South Beach, the British West Indies in the Caribbean, and Mexico. Kor’s growth comes as Starwood Hotels & Resorts Worldwide Inc. has proposed a lower-priced boutique chain.
Question: What exactly is a boutique hotel?
Answer:
It’s a very broad category now. The term is used by brands as well as independents. For us, I would say there’s a very distinct and very obvious personality in our hotels sort of a sensory perception is evident from the moment you walk in. It starts with creative design. It is very personalized service and a high-level of extraordinary amenities. I think today’s hotel guests want to experience their stay the way they want to live at home.
Q: But don’t they lack the amenities of a full-service property?
A:
I think that’s a myth. A boutique hotel can offer every bit the level of amenities that larger hotels offer. It is very competitive. Amenities come in many shapes and sizes. I see special lanterns to accentuate a pool deck as an amenity. It is a sensory amenity. It is the mood that an amenity may create, which translates into everything from lighting to music, right down to the type of exercise equipment in your workout room. It’s not just soap or shampoo, it is a PlayStation concierge, an IT concierge, a floor butler. Those are the kind of things that are extraordinarily difficult to execute on a large scale.
Q: When you walk into a hotel, how can you tell whether it has style?
A:
The right vibe. I think it happens at the front door. You walk into an environment that has proper levels of music, proper lighting. You have staff who are attentive, who are anticipating your needs and then executing. I think that a fair amount of it starts with the design. Also, travelers are pretty inquisitive and observant, and they see these subtleties in design that create a bit of a wow factor. It is not about trying to be cute. It is all about the sophistication.
Q: Do you often stay at Kor hotels?
A:
Every week. I have stayed at all of our hotels. To me, I need to experience it as a guest experiences it.
Q: Do you check in incognito?
A:
As the president of the company, it is hard to be incognito. I may arrive without a reservation, knowing there is availability, but seldom incognito.
Q: How do you stay relevant as the boutique market becomes more crowded?
A:
We are going very high end. We are going to continue to drive the quality into our hotels, and our new products will reflect that. As an example, we are about ready to close on the Campton Place, a classic boutique icon in San Francisco that we are going to return to its former glory. It is extremely well thought of, and it is in need of some modest upgrades. That is the direction that our company is headed.
Q: So you’re looking at bigger properties?
A:
Where we may initially have taken on a 45-room hotel, we may not have interest in that anymore unless the economics are very unique. We would like to be in the 150- to the 250-room range. It is hard to make an 800-room hotel feel like a boutique.
Q: Assess the current state of the hotel market.
A:
In a word, healthy. Some regions are enjoying greater prosperity, but generally speaking we are beyond being in that recovery stage, we are back in the growth stage. Companies are trying to seize the moment and grow their brand.
Q: What about in two to three years?
A:
There is some new development. At the same time, there has been a movement toward conversion to condo hotels in particular. The net effect is that over time there may be fewer pure hotel rooms.
Q: What is Kor doing in this area?
A:
It is something that we are going to end up doing more of. We may do some conversions of our properties here in Los Angeles. It doesn’t fit into all of them, but in some areas, it makes a lot of sense.
Q: Name your favorite Kor property.
A:
That would be a mistake. They are all very unique. If you are going to have a meeting, then you might select one hotel over another. To have a quiet peaceful dinner, you might go to one as opposed to another.
Q: OK, what is your favorite non-Kor hotel?
A:
I would say the Setai in South Beach. They have some marvelous amenities there. I was very impressed with the yoga mats in the closet. They have fabulous slippers that aren’t your run-of-the-mill cloth slippers. Even the selection of waters in the rooms is impressive not just still and flat, a variety of other choices.
Q: How did you wind up at Kor?
A:
I was the senior vice president of operations for Kimpton Hotels. During the time, I met Brad Korzen, founder of this company. His vision of developing a hotel company was intriguing. We stayed in touch. The opportunity surfaced, and I took it.
Q: Why did you initially start in the hotel business?
A:
To pay for my college tuition. I went to the University of Denver. Not far from the school was a hotel, a Sheraton. I took a job as a night auditor. But watching the wait-staff in the restaurant walk out with big checks, I decided that that was a much quicker way of earning of living. So I began waiting tables. This was at a restaurant called the Hungry Dutchman. It was very embarrassing, actually. I had the little cap and the knickers and the white shirt, the red tie and the blue vest and the clogs. I just made so much money it was sometimes hard to get me off the floor.
Q: What did you do after college?
A:
I went to work for Hyatt Hotels. I started out as a corporate management trainee. They assigned me to a hotel in Washington, D.C., a big 350-room hotel. I was so excited I basically drove all night to get there. It struck me as odd when I drove up, and the driveway was dirt, the asphalt hadn’t been poured. I got to the front door, there was a tarp. The hotel wasn’t open. I spent the first few months just unloading tractor trailers. That is how I initially started with Hyatt. Then, I moved around. Every 10 to 12 months, you were moving to another hotel.
Q: How would you compare a boutique hotel company with a large chain like Hyatt?
A:
There is a very definite playbook with the very large hotel operators, and there has to be. That goes back to the need to deliver a very consistent look because there is a sense of security about being in that environment. In a boutique environment, at Kimpton and Kor, you are basically writing a playbook.
Q: What do you think about Starwood’s plan to develop a chain of lower-priced boutique hotels?
A:
Starwood really hit a home run with W hotels. It appears that this is a reinvention of the W hotel for a different market. W appeals to a certain demographic, and this is intended to appeal to another demographic. To me, it doesn’t dilute what we do. It just draws more attention to the boutique market.
Q: Is Kor now a major player in the hotel industry?
A:
I don’t know. I don’t think so. I don’t think we said to ourselves, “We have arrived.” We are sensing that we are recognized by both the development community (and) the hotel community as being a very formidable choice. The pace is picking up for us. Arguably, it is picking in general, but for us, it is picking up quickly.
John Arnett
Title:
President
Company:
Kor Hotel Group
Born:
1952, Eureka
Education:
B.A. in business administration, University of Denver
Career Turning Point:
First general manager position at a 350-room hotel before the age of 30
Most Admired People:
Arthur Ashe, Steven Spielberg and Howard Schultz
Personal:
Married, three children
Hobbies:
Teaching his children how to swim and ski
