Given the lack of sites for construction of luxury hotels in the prime L.A.-area hospitality markets of West Hollywood and Beverly Hills, hoteliers are scraping the skins off old hotels and building new ones on their bones.
"People are finding existing properties, upgrading them and repositioning them to higher levels," said Mark VanStekelenburg, vice president at PKF Consulting in Los Angeles. "There are not enough sites in these markets."
Plus construction costs these days make building a luxury hotel from scratch a daunting proposition.
The most recent example is the transformation of the lackluster Wyndham Bel Age, which shut its doors in May. It reopened April 1 as the dapper London West Hollywood.
The former Argyle is another example of the hotel revival trend on the Sunset Strip. New York hotelier Jeff Klein spent more than $40 million to acquire, refurbish and restore the Argyle into the chic Sunset Tower Hotel.
Meanwhile, SBE Hotel Group, a subsidiary of SBE Entertainment Group, is transforming the Le Meridien on La Cienega Boulevard into swanky SLS Beverly Hills Hotel. The SLS will be the first to launch in the line of hotels SBE plans to develop across the United States, Mexico and the Caribbean.
LaSalle Hotel Properties, which recently made over its Le Montrose Suite Hotel in West Hollywood, snapped up nearby Grafton on Sunset and has scheduled its makeover.
And a fully redesigned Mondrian will be unveiled this fall.
The boom is driven by wealth. The steady increase in the number of high net worth individuals "has resulted in a growing global affluence that is fueling demand in all areas, from extravagant hotel room amenities to haute cuisine and spa services," according to Ernst & Young's 2008 U.S. Lodging Report.
The London West Hollywood is the California cousin of the London NYC. Both hotels are owned and operated by Blackstone's LXR Luxury Resorts & Hotels. Blackstone acquired the Bel Age, established in 1984, from Wyndham International in 2005.
"With the success our London NYC partner, LXR, saw a good opportunity to take a valuable hotel location and product and make it a lot more modern," said Vincent Mercurio, the London's general manager.
Standard guest suites start at $225 per night and top out at $529 for a 1,700 square foot one-bedroom suite.
Michelin-starred chef Gordon Ramsay, star of the reality show, "Hell's Kitchen," is slated to debut his first West Coast restaurant, along with a 24-hour in-room dining menu, in June at the new hotel.
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