Hip to the Kor

To step inside a Kor Hotel Group property is to feel like a bit like Alice in Wonderland and Dorothy in Oz at the same time. You’re definitely not in Kansas anymore, and everything — furnishings, decor and lighting — is all very curious.

Ceramic whippets stand sentry at bungalow doors at Viceroy Palm Springs. Dramatic white chaises trimmed with silver studs invite guests to stretch out in the lobby at Viceroy Santa Monica. Zebra-skinned rugs and walls drenched in red and black? In the hands of interior designer Kelly Wearstler, design travesty is triumph. Maison 140, Kor’s tucked-away Beverly Hills B&B, boasts 90 percent occupancy and a clientele heavy on Hollywood dealmakers and celebrities.

This aesthetic of nonconformity — fun and irreverent yet still elegant — has helped make the Los Angeles-based boutique chain, with CEO and founder Brad Korzen at the helm, one of the most talked about and successful in the nation. Part of The Kor Group, the hotel division has a portfolio of eight properties in Los Angeles, Palm Springs and South Beach, Fla., and new resort-residential projects in the Caribbean.The Avalon, in Beverly Hills — which was Kor’s debut hotel and designed by Wearstler, Korzen’s wife — made Condé Nast Traveler’s 50 hottest list. Avalon’s poolside eatery, blue on blue, popular among local foodies for its fresh ingredients, was a Food & Wine 50 best pick for hotel restaurants. Travel + Leisure singled out the spa at Viceroy Palm Springs (formerly the Estrella) as a “top five to watch.” The New York Times cooed of the Viceroy Santa Monica, “boutique hotel heaven.”

Though Kor is still something of the new kid on the block — the Avalon opened only in 1999 — the company is becoming the go-to chain for agents looking to give clients a Southern California hotel experience with a big wow factor. And that’s exactly what clients get when they sink into a cushioned chaise in a cabana at the Avalon and watch leggy models and male hipsters sashay past the pool.

“Normally you would have to go to Europe to get that kind of edginess and elegance,” said CCRA International president and CEO Fran Kiradjian of Agoura Hills, Calif., who said she matches Kor properties with clients looking “for something a little bit different.”

The buzz has been good for Kor’s bottom line. Last year, the company grew revenue per available room (RevPAR), the key indicator of a hotel’s performance, by 24 percent. That’s more than triple the average for Los Angeles, said Tom Santora, Kor’s vice president of sales and marketing. At the flagship Viceroy Santa Monica, RevPAR grew by an astounding 51 percent in 2004, outperforming the Santa Monica average by a whopping 36 points.

Maison 140’s enviable 90 percent occupancy may be partly due to its $169-a-night starting rate, one of the more affordable in the Kor chain. Overall, the company’s hotel portfolio runs a healthy 82 percent occupancy, 2 points higher than the market average.

“It’s pretty remarkable,” Santora said. “We’re a boutique hotel with no brand affiliation. We’re not part of Leading or Preferred Hotels of the World. We’re doing this all on our own and in a market with some pretty formidable competition — Marriott, Casa del Mar, Shutters by the Sea and Le Merigot.”

KOR STRATEGIES

Credit the 43-year-old Korzen’s business savvy with the impressive performance. After launching the company in 1999, he sought out top talent from chains like Kimpton, Starwood and Hyatt. Then, he began applying the sales and management strategies of the big boys to his little boutique brand.

A key strategy is to monitor supply and demand. Kor does so on an hourly basis, allowing rates to adjust upward if the number of rooms constricts (but always honoring negotiated corporate rates), said John Arnett, president of Kor Hotel Group and a veteran of Kimpton and Ritz-Carlton. The result is a price point that is “neither at the bottom nor the top” but aimed at giving guests good value, Arnett said.

In just 2½ years, Kor has doubled its hotel properties from four to eight and quadrupled available rooms to 1,642. The bulk of that growth came with Kor’s purchase in 2002 of the 802-room Sheraton LAX. The West Century Boulevard property underwent a $14 million glam makeover that transformed it from a ho-hum big box to the coolest place on the block to hang your hat.

“It’s the most anti-airport hotel you’re ever going to see,” Korzen said.

Eight hundred rooms stretch the definition of boutique by anyone’s standards. But Korzen insists that “big” and “boutique” can happily coexist.

“I don’t think the size of the hotel necessarily matters,” he said. “It’s more about the style, the residential flavor and the uniqueness.”

Korzen has not been caught off guard by the fast-paced growth. He built the company for growth and speed, putting together a strong infrastructure headquartered in the giant media and entertainment complex across the street from the Los Angeles County Museum of Art.

For a period of about one year after the Avalon opened, Korzen hired an outside firm to manage the hotel but the arrangement did not last.

“I could never be satisfied unless I’m doing it myself,” Korzen said.

From the Wilshire Boulevard suite of offices, Kor handles the kind of work that other firms might farm out. The staff of 70 includes a design and construction department and project management team. Also here are Kor’s IT, finance, public relations and e-commerce teams.

“We’re truly a full-service hotel company,” Korzen said.

Unlike many of its competitors, Kor handles reservations in house, employing agents who have first-hand knowledge of properties and can respond to inquiries on just about anything, from the type of bathrobes to the storied Hollywood histories of many of the Kor hotels. (Marilyn Monroe really did live in the Avalon building during its Beverly Carlton days.)

Regardless of the distribution channel used to book a room, Kor offers a best-rate guarantee that Santora said eliminates headaches for travel agents.

“There’s nothing more embarrassing than to call your client and say. ‘I got you into the Avalon in Beverly Hills’ and then the client goes online to check out the hotel and they see a lower rate,” Santora said. “When you book with Kor, you have the confidence that that won’t happen.”

With his reputation as a design king clearly established, Korzen has now set his sights on achieving the same level of acclaim in the area of service.

“At the end of the day, people judge a hotel by how good the service is. If you’re going to compete in the hotel business in the next 10 to 15 years, that’s where you’re going to compete. I think our service is great, but we’re not the Four Seasons,” Korzen continued. “But then, they’ve got 40 years on us. We do very, very well, but you can still take it to the next level.”

As part of its effort to offer the best service possible, Kor uses GuestWare, the customer relationship management software. Repeat guests are asked to indicate on cards their preference for everything from the size and location of the room to what morning newspaper they read.

“The next time you return we can fulfill those expectations,” Arnett said. “You’re automatically registered because we have your credit card on file. When you get up to your room, there should be a note from the manager welcoming you back, and an amenity of some sort. You’re going to get that special attention.”

A MARRIAGE OF REAL ESTATE AND DESIGN

Real estate is nothing new for Korzen, a Chicago native and University of Illinois grad who went on to earn a law degree from the University of Miami. He was still in his 20s in 1989 when he began buying and renovating apartment buildings in his hometown, and later Florida, Texas and California.

Since then, he has amassed a residential portfolio that includes hip, downtown live-work spaces, loft condos and apartment buildings. Much of his success is due to his keen eye for down-and-out buildings that lend themselves to artsy transformations. But Korzen may owe even more to the South Carolina-born Wearstler, whose idiosyncratic design sensibilities set Kor hotels apart from the pack.

A tiny wisp of a woman who oozes glamour, Wearstler, 35, has a knack for putting together modern furnishings with flea-market castoffs and antique-store finds, which she cleverly arranges against a backdrop of bold colors, heavy on texture and graphics. Wearstler and Korzen met on the Avalon project and eventually married. Home is now in Beverly Hills where the couple lives with sons Oliver, 3, and Elliott, 18 months.

Wearstler heads up her own busy interior design and architecture firm, named kwid (Kelly Wearstler Interior Design). She splits her time between her husband’s boutiques and projects of her own. Peter Morton recently hired her to make over the high-roller suites and nightclub at the Hard Rock Las Vegas and Bergdorf Goodman tapped Wearstler to design its flagship restaurant and bar in New York.

KOR GROWTH

Even if Wearstler wasn’t so busy on her own, she would have her hands full just keeping up with the growth of the Kor Group.

The latest Los Angeles addition to the hotel family opened in April in West Hollywood. Kor spent $6 million renovating the Summerfield Suites by Wyndham, transforming the 112 studios and guestrooms into an urban oasis of handsome, metropolitan chic. Rooms have a comfy, residential feel, and each has a gas fireplace. As with all Kor properties, rooms are wired for high-speed Internet and public spaces are wi-fi accessible.

Yet another Kor-style makeover is nearing completion at the company’s second Sheraton franchise, the Four Points Sheraton Santa Monica, now rebranded the four-star Sheraton Delfina. Design-wise, the Delfina is less eclectic than other Kor properties yet still bears the distinctive Kor look, with its one-of-a-kind furnishings and design scheme. (Clients should check out the collection of shell photos and drawings on the high lobby wall.)

While Korzen may be well on his way to establishing himself as the boutique baron of Los Angeles, the subject that really excites him these days are his two ventures outside the country. Both, he said, will be of interest to travel agents on the lookout for new destinations off the well-trod path.

Korzen is extending the Viceroy name to two of the Caribbean’s hottest up-and-coming destinations: Anguilla in the British West Indies and Mexico’s Riviera Maya, south of Cancun, both set to open in 2007. The two properties mark Korzen’s first overseas foray into the residential-resort arena. Aiming for nothing short of the best, Korzen persuaded the busy Wearstler to take on both projects.

The Viceroy Anguilla will feature 41 villas ranging from three to five bedrooms each, and 105 residential units, from 500 to 2,500 square feet, will be offered for sale. Each villa will have its own infinity pool; each residential unit a plunge pool.

At the moment, this dot-on-the-map island, located east of the Virgin Islands, is largely under the tourism radar. But Anguilla “is going to be the best island in the Caribbean when we open,” Korzen said.

At Viceroy Riviera Maya at Mayakoba, Kor joins four other hotel groups, among them Fairmont, Rosewood and Banyan Tree, in a luxury community in the lush Yucatan 42 miles south of Cancun. Kor plans 110 villas of 1,500 square feet each, set along winding lagoons, a Greg Norman golf course and the Caribbean coast.

Though the Anguilla and Mexico properties consume much of his attention these days, Korzen is also busy in the United States. His growth strategy calls for adding three to five hotel properties a year, with an eye toward new markets such as New York, San Francisco and Chicago.

One of his biggest challenges is keeping the Kor brand fresh and exciting. What he doesn’t want to do is create cookie-cutter versions of his own properties, “to become just another commodity,” he said.

The Kor team is constantly looking for ways to surprise guests in pleasantly unexpected ways. For example, Kor recently equipped the luxurious, poolside cabanas at the Viceroy Santa Monica with flat-screen monitors, affording business clients an out-of-the-ordinary setting for their next PowerPoint presentation.

“You’ve got to be constantly reinventing yourself,” said Korzen.

Fortunately for him, creativity is apparently in no short supply at Kor.