New Sunset Strip Hotel Aims for ‘Budget Hip’

If cut-rate chic sells, then the Sunset Strip is becoming a buyer’s market.

The sinuous, mile-long thoroughfare--lined with some of L.A.’s hippest institutions--is now home to two hotels chasing a young, trendy clientele that in the past may have been priced out of the boulevard’s more well-known guest addresses such as Chateau Marmont, the Mondrian and the Argyle.

With Monday’s “soft opening” of the 107-room Grafton, described by its builders as a retro homage to the Rat Pack, the nearby Standard hotel has some competition. Although it’s been open 18 months, the Standard is considered West Hollywood’s hottest new in-spot.

Both hotels target youthful, image-conscious guests on a budget--mostly entry-level entertainment industry apparatchiks--with room rates starting at $99 to $125 a night. In contrast, lodging at more exclusive Sunset Strip hostelries starts at $220 to $285.

“These hotels are aimed at folks who really want to be seen but can’t afford to stay at the higher-end places,” said Jack Westergom, managing partner of Westergom & Associates, a hospitality consulting firm in Manhattan Beach.

The Standard, which along with the Chateau Marmont is owned by Andre Balazs, has made a name for itself with its relentlessly hip aesthetic that features among its calculated quirks an upside-down marquee, blue AstroTurf flooring and “living” art pieces.

Since its opening, the former retirement home-cum-”It” hotel has packed its 140 rooms with an average monthly occupancy of 95%, Balazs said. “Business has been exactly what we were hoping for,” he said.

Work is underway for a second Standard at 6th and Flower streets downtown, and Balazs is eyeing sites in New York and Chicago for future locations.

The Grafton is aiming for similar success. Outrigger Lodging Services, which owns two other West Hollywood hotels off the Strip, bought the 45,000-square-foot property, formerly the Park Sunset Hotel, early last year for $9.5 million. The 44-year-old hotel generated a monthly occupancy average of about 60% and an average daily room rate of about $60, Outrigger President and Chief Executive John Fitts said.

Fitts’ company, which owns and operates 25 hotels across the country, assembled a team of well-known designers and pumped $5 million in renovations into the Park Sunset, hoping to give it a throwback swank that would have appealed to Sammy, Dino and Frank in their crooning and carousing heyday. When the make-over is complete in mid-August, the hotel just east of La Cienega Boulevard is expected to boast a retro ‘50s lobby, a black-on-black lounge and a Venetian-style garden by the pool. Fitts estimated the current value of the property at $21.5 million.

But can two hotels, just a stone’s throw apart and courting the same market, make a go of it? Local hotel analysts, and not surprisingly Fitts and Balazs, say the chances are good.

The hotel business in West Hollywood has been steadily picking up steam over the last four years. In 1999, the hotbed of hip was able to charge Los Angeles County’s third-highest hotel prices and even outdraw neighboring Beverly Hills in average monthly occupancy rates, 77% to 70% respectively.

“That whole market is doing very well,” said Bruce Baltin, senior vice president of PKF Consulting, which tracks the local hospitality industry.

But until the Standard opened, he said, budget-conscious hipsters were an underserved niche at Sunset Strip hotels. Now the Grafton wants its share.

“People in the film and recording business come from all different price points,” Baltin said. “Not everybody coming here is at the high end, so there’s definitely room in the market for more properties of that kind.”

Both the Grafton and the Standard are following the business models of the Strip’s more established boutique hotels, where unique and even eccentric appointments are a major drawing card for West Hollywood’s discriminating visitors.

But Westergom cautioned the new kids on the Strip not to neglect service while pursuing style. “Hip is good,” he said. “But how many hip restaurants have you seen that didn’t quite make it?”