NEW YORK, Dec 16, 2001/ --- When Studio 54 co-founder Ian Schrager opened Morgans and The Royalton hotels in the mid-'80s, the concept of an urban inn for the deep-pocketed and design-savvy was a new one. In the years since, however, boutique hotels have become mainstays of the New York scene for visitors and locals alike.

Their keenest marketing tools - trendy bars and restaurants that draw star power - attract just as many New York nightlifers as out-of-towners.

Now some doomsayers are predicting that the boutique lodging biz could be put to sleep by the current tourism slump and recession.

But while it's true that these fashion-forward, intimate hotels aren't doing the booming business they were a year ago, they're certainly not ghost towns. NYC & Company, the city's official tourism marketing association, says the Thanksgiving weekend saw occupancy rates down, but only by about 10 percent from last year.

Last Thanksgiving day, hotels were about 77 percent full; this year they were at 64 percent.

That relative equilibrium has been established thanks to NYC & Company's concerted post-September 11 push. Under the association's "Paint the Town Red, White and Blue" campaign, launched in early November, boutique hotels like The Muse and The Dylan are offering packages as low as $157 that include hotel accommodation, a Broadway show, a dinner gift certificate, parking coupon and donation to the Twin Towers Fund.

Television ads for the promotion began less than two weeks ago and more than 30,000 calls have already rolled in.

Keith Yazmir, vice president of communications at NYC & Company, concedes that small boutique hotels are still more vulnerable than larger, more established chains though. "They are caught, in a sense... The rise of boutique hotels really paralleled the jump in travel and the booming economy that we've experienced over the last few years," he says.

The key to surviving, according to Yazmir, is to be "well-established and have carved out a client base."

Like Andre Balazs' Mercer Hotel in Soho, a favorite among New Yorkers that boasts an impressive repeat customer business. According to a spokeswoman, The Mercer is once again at regular occupancy for this time of year.

And Jennifer McMahon, director of sales and marketing for The Muse - a 200-room Times Square hotel open just over a year - expects her establishment to perform similarly. "We're sold out tonight, we will be tomorrow night and Sunday, Monday, Tuesday, Wednesday and Thursday of next week," she notes, adding that bookings are already coming in for the January 5 to 11 fashion market week and February's fashion shows.

The latest offering from the man who started it all, Schrager's Hudson Hotel, is still booming, too. A Thanksgiving-weekend trip to its Phillippe Starck-styled lobby found the main bar bustling.

Hudson Hotel
Photo courtesy of Hudson Hotel