Where It's Chic To Sleep

For a shy guy who never advertises and doesn't hang a sign on the door, Ian Schrager sure knows how to draw a crowd. At the recent opening bash for St. Martins Lane, his first London hotel, there were enough celebrities milling about, from Brad Pitt to Kate Moss, to pack a Hollywood premiere.

In the minimalist lobby, designer Philippe Starck's trademark, absurdist touch was at full volume: painted white with touches of fluorescent yellow, it featured an oversize, 8-ft.-tall vase filled with hydrangeas; gold-leaf stools shaped like molars; and a collection of giant chess pieces straight out of Alice in Wonderland. Upstairs in the spartan $200- to 300-a-night bedrooms, guests could "paint" the room according to their moods, using a colored light panel.

The VIPs in attendance were, as usual, wowed by what Schrager, 53, calls "hotel as theater." But these days the Brooklyn-born co-founder of New York's legendary Studio 54 nightclub and the man behind such chic cribs as New York City's Royalton and Los Angeles' Mondrian hotels, is looking for a broader audience--people willing to pay up to be put up in his brand of hotel hipness. Trying to stay ahead of the curve he started, Schrager is adding 10 hostelries to the five he had been running. "It's a very capital-intensive business, which doesn't encourage many new ideas," says Schrager, sitting in his new, whitewashed loft offices on Manhattan's West Side, wearing (what else?) white pants and shirt. "But hotels are not just places to sleep. You're supposed to have fun there."

"You either love them or hate them," says Bill Kimpton of Schrager's work. He's a former investment banker whose $400 million-a-year, 28-property boutique chain is one of a host of competitors, large and small, who are out to spoil Schrager's good time. Kimpton caters to less image-conscious business travelers who still prize a little personality, including free tarot-card readings, back rubs or goldfish. The San Francisco-based dynamo is establishing a growing national presence, converting bank buildings and department stores in places like Denver and Portland into small, Euro-style hotels.

Fashion families Versace and Ferragamo have hit upon hotels as brand extensions, while Island Records founder Chris Blackwell's laid-back Island Outpost retreats in the Caribbean have become destinations in their own right. With help from pals Leonardo DiCaprio and Cameron Diaz, Andre Balazs, the owner of Los Angeles' fabled Chateau Marmont, recently added the Standard, a retro-kitsch palace for young, hard-partying hipsters, complete with inflatable sofas and an AstroTurf pool deck. Balazs hopes to create a chain of anti-Best Westerns.