Ritz-Carlton Mellows Out

Ken Lerch’s life at the Ritz-Carlton is a lot easier these days.

He used to spend much of his time telling the Laguna Niguel hotel’s guests--many of whom pay more than $250 per room per night--what to wear.

And Lerch is not a fashion consultant--he’s a doorman.

Ever since the hotel opened two years ago this month, however, doormen at Orange County’s landmark hotel were saddled with the task of nicely--very nicely--telling men who entered the lobby after sundown to put on their jackets and ties.

But now the sun has set on that policy.

Men dining in the hotel’s ultra-posh restaurant, appropriately called The Dining Room, still are asked to wear a jacket and tie. But guests who just want to waltz through the lobby--or enjoy a nightcap in the lounge--no longer need worry about sporting a coat and tie.

On its face, this softening of dress codes at the Ritz-Carlton might not seem earthshaking. But it is one of many recent signs that the $100-million hotel is adjusting to the enigmatic California life style.

“We are not just a resort hotel,” said Henry E. Schielein, who was named a Ritz-Carlton vice president and general manager of the Laguna Niguel hotel six months ago. “We are a resort hotel in California.”

John Toner, the hotel’s marketing director, said the posh hotel began by “trying to make the California scene change. Instead, we changed.”

The adjustment has not been easy. Nor has it happened by accident. It comes only after scores of guests have asked that the hotel rip a few pages from the rule book.

And it comes because the Ritz-Carlton, less than two hours by car from Hollywood, is seeing among its clientele more and more of the Hollywood crowd--which generally likes to be surrounded by pomp but to dress in Levis and Reeboks.

The Ritz-Carlton has evolved from a traditional-but-posh business hotel to a weekend mecca, not only for the Los Angeles jet set but for international celebrities. “It is one of the most successful hotels that I’ve ever seen open,” said Joseph G. Kordsmeier, a lodging industry consultant based in Carmel, Calif.

Some industry analysts say that the Ritz-Carlton’s reputation has already surpassed that of the highly acclaimed Beverly Hills Hotel. Said one Orange County hotel executive who asked to remain unidentified: “The Ritz-Carlton will someday be as important a landmark to California’s hotel industry as Disneyland is to the state’s amusement industry.”

Unlike Orange County’s other luxury hotels--which depend heavily on weekday business and lure weekend customers with bargain-basement rates--the Ritz-Carlton is booked solid most weekends without resorting to rate cuts.

Although it has refused to relax dress standards in its fanciest dining room, the hotel has adjusted to California’s more casual dining tastes. California Cuisine--which features fresh local produce--has found its way into The Dining Room, which once was graced only by the haute cuisine of France.

Outdoor Barbecue

And the hotel recently installed a permanent barbecue by one of its pools, where guests who don’t want to dress up can dine in swimsuits and sandals. The hotel also is in the process of converting its dressy nightclub into a more relaxed grill where hungry and casually dressed patrons can order such basic meals as steak and baked potato.

Still, the true flavor of California isn’t just in its food. The environment is an important lure and, if sunshine is synonymous with California, Ritz-Carlton’s executives want to provide their guests with more of it than ever before. So they plan to replace a series of tiny patios with an expansive sun-tanning terrace facing the ocean. After all, the managers say, virtually every guest who checks into the hotel asks for a room with an ocean view. And most are willing to pay virtually any price for one.

Hotel executives also say that more and more guests are asking that the hotel host the stereotyped coastal Southern California activities that aren’t big in Baltimore or Boise. Recently, the hotel devised a new daily activities calendar that is a compendium of California events. Activities range from aqua-aerobics and tropical floral-arranging classes to volleyball tournaments and sunset cocktail cruises around Newport Bay.

But this leisurely life style will not be found at six of the seven other Ritz-Carlton Hotels--where a genteel stuffiness still reigns. Only the company’s recently opened resort in Naples, Fla., offers a similar atmosphere. In contrast, the Ritz-Carlton in Boston recently made news when it asked actor Carol O’Connor--better known as Archie Bunker--to wear a tie into its restaurant. O’Connor refused and left.

Schielein says the hotel expects to post 1986 revenue of more than $35 million--a figure that industry consultants say is remarkable not only for a hotel of its size but also for one of its young age.

‘Significant’ Profit

Although Ritz-Carlton executives would not reveal the hotel’s earnings, Colgate Holmes, president of Atlanta-based Ritz-Carlton Hotel Co., said the hotel is making a “significant” profit. Generally, most new hotels do not post a profit until their fourth or fifth year of operation.

So successful has Ritz-Carlton found the California market that it now has big expansion plans.

The company intends to build a 308-room Ritz-Carlton in Marina del Rey and a 250-room resort hotel in Rancho Mirage. It also is studying a location in San Francisco, Holmes said.

The picture wasn’t always a bright one, however. For much of its first year in business, a battle with creditors created a hotelier’s nightmare for the Laguna Niguel Ritz-Carlton’s management. Press coverage, always important for a new hotel, was drawn away from the facility and focused largely on its finances.

The hotel’s majority owner, Prudential Insurance Co. of America, had been slow to pay contractors because developer W. B. Johnson Properties Inc. claimed that the hotel had been overbilled. Suits and countersuits were filed, liens were filed against the hotel, and it took more than a year to work things out.

Then, just when the financial trouble was solved, a new problem sprang up. After just two years on the job, William Hall, the general manager who opened the hotel, announced last February that he was quitting. He left to become vice president of resort operations at Pebble Beach Co. in Northern California.

Brought Best Manager

Management acted quickly and replaced Hall with Schielein, a 35-year veteran of the hotel industry who then was vice president and general manager of the flagship Ritz-Carlton hotel in Boston. In doing so, the company brought its best manager in to oversee the Laguna Niguel property--making it clear that it is the prototype for all of Ritz-Carlton Hotel Co.’s future resort hotels.

Since its opening, occupancy at the Ritz-Carlton has climbed--to nearly 70% at the end of its first year from less than 50% in the opening weeks. This year, room occupancy is expected to average nearly 80%, second in Orange County only to the Disneyland Hotel, which fills an average of 90% of its rooms each night.

But the Ritz-Carlton attracts a far different crowd than the Disneyland Hotel--which depends on large, weekday conventions for much of its business. The Ritz-Carlton’s business comes mainly from small meetings of executives from well-heeled companies.

Because the Ritz-Carlton is the first world-class hotel in Orange County, it now has an enviable two-year jump over its burgeoning competition in understanding just what these upscale travelers want--and what they won’t put up with.

One thing they won’t put up with is a hotel staff that walks around with its collective nose in the air.

Less-Formal Mood

So staffing is another area that the Ritz-Carlton has tried to lighten up. The hotel’s management has tried to instill a less-formal mood by hiring people in their early 20s to fill most of the 800 staff positions.

“They don’t go around with chips on their shoulders,” said Schielein, “They don’t have to be whipped into serving customers.”

And, so far, customers haven’t had to be whipped into making the trek to the Ritz-Carlton--a fact that other luxury hotel companies have not overlooked.

The Ritz-Carlton still is the only true resort to have opened on the California coast in years, but competition is getting keener.

While not billed as a resort hotel, the $80-million Four Seasons opened near Fashion Island in Newport Beach in June. It, too, recognizes that its guests are a leisurely bunch.

“This is California, and people should be relaxed,” said Klaus D. Tenter, general manager of the 319-room hotel. “We don’t expect anyone to wear a tie in our hotel. It’s not for us to dictate to people what to wear.”

Even though they may appeal to different markets, Ritz-Carlton and Four Seasons already are engaged in a fascinating hotel rivalry.

And they make their differences clear.

“The Four Seasons is not a competitor. It’s not even a resort hotel” insists Schielein. “You need a pair of binoculars and a room on the top floor to even see the beach from there.”

But the Four Seasons is much closer to John Wayne Airport and to the activities in Newport Beach, and its management hopes to capitalize on that.

“The Ritz-Carlton really separates you from everything,” said Tenter. “You have to get in the car to go anywhere from there.”

That distance actually can work to a resort hotel’s advantage, said Palos Verdes-based hotel industry consultant David Brudney. “Resorts can make tremendous reputations by their lack of accessibility,” he said. He noted that a remote location has helped boost the popularity of the Greenbrier resort in White Sulphur Springs, West Virginia.

Still, service--above all else--is the name of the game in the luxury hotel business.

And with an average of slightly more than two workers per guest, the Ritz-Carlton is in a class of its own. Most other luxury hotels, including the Four Seasons, average about one employee per guest.

The Ritz-Carlton has 70 cooks--far more than any other hotel in Orange County. It has one employee whose sole job is to polish silver and another who spends the entire day fluffing pillows on the hotel’s couches. Yet another worker spends her entire day emptying the hotel ash trays and imprinting the famous Ritz-Carlton lion in the clean sand. Outside, the hotel’s landscaping crew plants more than 300,000 flowers and shrubs annually.

The hotel spares few expenses. Each of its crystal glasses cost $15. The silver water pitchers used in the dining room are $350 each.

Dinner china is so expensive, Schielein said, that “if an employee breaks one dish, I have to sell five meals to make up for it.”

And those meals don’t come cheap. The average dinner for two in The Dining Room runs about $80, before the tab for drinks and wine is added in.

Higher Room Rates

But it is the room rates where most of the costs are passed along and most of the profits are made.

The Ritz-Carlton’s average room for two runs $188 per night--about twice the going rate of most first-class hotels in Orange County.

Demand, however, has been so great that the hotel has been able to raise its rates considerably over the past two years.

The lowest-priced rooms have gone up 15% to $155 per night from $135 when the hotel opened. In the same period, the cost of oceanfront rooms has risen 22% to $275 per night from $225. And the nightly cost of the Presidential Suite has gone up 25% to $1,500 from $1,200.

But no matter how wealthy the guests may be, they have one thing in common with their counterparts at the nation’s Holiday Inns and Motel 6s--they steal towels.

There is something special about having a Ritz-Carlton souvenir at home, and the towels are popular because it’s hard to ignore their origin--the prestigious Ritz-Carlton logo is imprinted on each one.

One female guest from Santa Barbara, who was recently out lounging by the hotel pool, had such a towel tucked beneath her head. When asked if she planned to take the towel home with her, she said she’d like to but was afraid of getting caught.

“Last time I stayed here I took home the monogrammed bathrobe they had hanging in my room,” she said. “They billed me for it a few months later.”