Staff is in flight as the Algonquin Gets New Owners

When it was announced last month that the Algonquin Hotel was once more changing hands-the third time in 15 years-Geoffrey Mills, then the hotel’s general manager, said he’d received more than 20 e-mails from concerned guests. “It’s an emotional as well as historic landmark, which means that it’s difficult for people to accept anything different,”Mr. Mills said.

The Algonquin, of course, is the dowager queen of West 44th Street, more storied than any other theater-district hotel. But if the new owners are to succeed where its other eager buyers have failed in making the Algonquin a player in the luxury-hotel market, they’ve got to resolve the same dilemma that has proved insoluble to its previous modern-day owners: how to give the old hotel a new profile without alienating the old guard of returning guests entranced by the Algonquin’s place in the intellectual history of the city?

Doing so is not simply a matter of preservation, either. Again and again, each of the buyers who’ve taken over the Algonquin since 1987-the Aoki Corporation in 1987, Olympus Real Estate of Dallas, and now Miller Global Properties of Denver-have painted, restored, plaqued, put up the Round Table drawings, cleaned the carpet, pointed out the cat, reminded guests where Dorothy Parker, Robert Benchley, George S. Kaufman and Harpo Marx once sat, booked the kind of cabaret that couldn’t be beat, tried to improve the menu, cleaned up the rooms and added new lighting.

But a certain split always existed at the Algonquin, located near the Paramount and across from the Royalton. The hotel was cleaned up and tarted up, the Oak Room was remade, the Rose Room derosed, the Blue Bar was moved. And 40 percent of the hotel’s revenue was still coming from returning guests who wanted to come to the Algonquin-Eudora Welty’s Algonquin, the hotel where William Shawn dined on Cheerios and Preston Sturges died in his room. And the new onslaught of New York tourists were a little … bewildered, maybe even weirded out by the place. Was it a museum or a hotel?

When Miller Global Properties, an investment partnership that runs five real-estate funds, bought the Algonquin (for $40 million, according to a source close to the deal) in June, they clearly believed that it would be the latter, and a good business. That may be possible, but the old management at the hotel-which believes it has seen it all-have begun to leave. The whiff of change in the air at the Algonquin has already alienated six senior managers, who have been gone since June.

“There is definitely a cultural difference as to how they are going to operate the hotel,” said Mr. Mills. “You’ve got a company that’s coming into New York for the first time, and although they say they’re looking to embrace the historical aspects of the hotel, they want to show off their value.”

Although employment offers were made to the entire Algonquin staff-a stipulation that was written into the seller’s contract-Geoffrey Mills, along with five other members of top management, declined. “The offer wasn’t commensurate with the type of package that was there prior to the transition,” Mr. Mills said. “There was no job security.”

The new owners say they’d like to keep as much of the staff as possible. Many of the Algonquin staff have been around for generations and have warm relationships with returning guests, who represent a source of revenue that will have to be maintained even as change knocks on the Algonquin’s door.

Bell captain Mike Lyons, for instance, knows a lot about various guests’ particular quirks and requests. There is the gentleman who has to have room No. 701 every year. “It’s the smallest room in the hotel,” Mr. Lyons said, standing at his post in the Algonquin lobby. “If I gave him a suite, he’d refuse it.”

Mr. Lyons-who started, at age 18, as a back elevator operator-also remembered other guests who won’t be providing future revenue, but who comprise the cultural repository that is the Algonquin. For instance, he remembered Ella Fitzgerald, who often brought back Chinese food for the staff after a gig. “Then on Sunday morning she’d call down and say, ‘Mike, bring me up some ice cream,'” Mr. Lyons said. “We’d bring her nine scoops, because that’s how many flavors we had then. She’d eat it while she watched TV.

“James Thurber was blind when he started coming here. He was a real nice man. E.B. White was … I guess he was O.K.,” Mr. Lyons said, loading luggage into a tour bus in the 90-degree heat.

Thornton Wilder “never walked, he ran. Once, we got him a checkered cab and put all his luggage in it. When he came down, he ran in and then went right outside the other door. He forgot that he had his car parked in the garage.”

Mr. Lyons and the other Algonquin employees will be targeted in the focus groups, their verbal histories converted into product knowledge for the distant owners of the new Algonquin.

While the move to balance business clients with returning regulars is being aggressively renewed, the tactics are not entirely new. Under the last three owners at least, the Algonquin’s competitive strategy has inevitably boiled down to two tactics: renovating infrastructure and services-dependable elevators were installed in 1991; a new telephone system was put in last year-and highlighting the Algonquin’s past.

Miller Global Properties, on the other hand, has American hotel holdings that don’t extend beyond a Marriott Residence Inn in Alexandria, Va. It has hired Destination Hotels & Resorts, the Denver-based management company that runs 24 high-profile resort properties all over the country, including Jack Nicklaus’ favored Palm Coast Golf Resort, the Gant ski resort in Aspen, Colo., and the Wild Dunes Resort in Charleston, S.C. They’re used to handling business clients and wealthy families on ski and golf trips-but what about the crew in from Palm Beach for a week of Broadway plays that wants to remember, reminisce and spend some late nights in the Blue Bar?

While Miller Global Properties Fund intends to fashion a 21st-century hotel-from the interiors to Internet access-and make it more appealing to business travelers (the hotel industry’s most demanding and free-spending clients), the company has said it won’t leave the veterans behind. “The Algonquin has typically attracted the leisure traveler, who tends to come for weekends and special events,” said Allen Goodman, regional vice president of sales and marketing for Destination Hotels & Resorts.

In hotel math, business travelers are the foundation of occupancy rates, which only recently have returned to pre-9/11 levels. Room rates, however, are still down in the city, according to John Fox, a hotel industry analyst for PKF Consulting. “The tourists have come back, but the business travelers haven’t,” Mr. Fox said. But it is the tourists who are still lured by the hotel’s literary ghosts: Mrs. Parker, Alexander Woollcott, Robert E. Sherwood, Herbert Bayard Swope, the playwrights who managed to self-promote their wit into the newspapers, the New Yorker crew, William Faulkner. Even the hotel’s owner, Frank Case, became a celebrity.

Over the last few years, the Algonquin has seen more pressure to leave these ghosts behind-along with its generation of fat, legendary cats who roamed the lobby as if they owned it (because they did: Matilda, the current lobby cat, apparently is hanging on through the new ownership and, emblematic of the recent shift, even got her own e-mail account last week)-as the block between Fifth and Sixth avenues was transformed into a new bastion of luxury hotels complete with 24-hour fitness centers, such as the Sofitel, and European-style boutiques that boast “300-count linens” and Frette bathrobes.

But few other hotels are as dependent on their own historic weight as the Algonquin, which felt like a Peter Arno cartoon, particularly after a couple of highballs. Hence the New Yorker cartoon wallpaper; the framed Al Hirschfeld illustrations in the Blue Bar; the Parker and Thurber suites; the purchase of a new “Round Table” (no one knows where the original one went). And the hotel continues to draw patrons and matrons with some weight: There have been Hillary sightings at the Blue Bar, Mario Cuomo likes to come by, and Rudolph Giuliani often ate breakfast in the dining room while he was Mayor-although one morning last December, the Mayor walked in on Michael Bloomberg and former Mayor David Dinkins, took one look and swiveled out.

It’s the returning guests who can make any even minor change appear monumental-and force owners to tread lightly. When even the most basic updates were attempted in the past, the owners were deluged with letters, postcards, telephone calls and e-mails. One guest once wondered if offering 24-hour room service-a pretty standard accommodation in any first-rate hotel-and putting bars in the guest rooms (as opposed to the suites) was “historically correct,” Mr. Mills said. The guest was “afraid because the Algonquin had never made a point of pushing room service, because the idea was to always have guests in the lobby.”

Cuisine has been another sensitive issue. “We tried to have an American Continental menu, but sometimes the chef would get creative and come up with something like Thai-infused chicken with coconut milk,” Mr. Mills said. “People would say, ‘That’s not what the Algonquin would have served 30 years ago.’ My reply was that we can’t do everything for history’s sake.”

As for the Blue Bar, the drink list became accompanied by helpful who’s-who descriptions for those needing to brush up on their Algonquin trivia. Someone ordering a Woollcott, for example, will be reminded that the Round Table member also had a day job as the Times drama critic.

A year after Frank Case’s death in 1945 the Algonquin appeared to be finished, but the hotel was sold to Ben Bodne in 1946. Bodne was a Southern oil magnate who bought the hotel as a gift for his wife, who said that it reminded her of her hometown, Charleston, S.C., and his family held onto it until 1987, when it finally yielded to the exploding New York economy. First, the Japanese Aoki Corporation bought it. Then, in 1997, Olympus Real Estate of Dallas bought it; management was left to the Atlanta-based Camberley Hotel Company. In June, Miller Global purchased the Algonquin despite the languishing economy. (According to Mr. Mills, the hotel was performing “at or better than market.”) As usual, P.R. sheets reveling in the hotel’s history were sent to the newspapers after each purchase, insisting that the new owners-or at least the copywriters for the P.R. firms-understood the tradition they had bought into.

Rotating absentee owners aren’t anything new at 59 West 44th Street, and it’s impossible to know whether Miller Global will have a similar abbreviated tenure. “We need to get to know the hotel before we can design a program,” said Destination president Charles Peck, sounding a little like the conquering capitalist forces in a Kaufman and Hart comedy, speaking over the telephone from Sun Valley, Idaho. “You can’t make educated guesses until you’ve really spent some time in the place.” Mr. Peck said that over the next several months, his management team would organize “focus groups” with guests and the Algonquin staff in order to develop an improvement plan that would probably “run several million dollars in the short term …. We’ll have a very proactive program to ask guests what they like and don’t like through questionnaires and informal contact, things of that nature.”

There’s definitely a long-running play in this somewhere.

Ken Widmaier, a vice president at Destination who will be interim general manager at the Algonquin, said the focus groups (95 percent of which will be held at the hotel itself) will focus on ways to market the hotel to meeting planners and regular business travelers, but also on “customers not staying at the property”-that is, patrons of the Blue Bar.

“Every function will have a boardroom-type setting, with hors d’oeuvres, wine and non-alcoholic beverages,” Mr. Widmaier said. “We’ll incorporate the input from the focus groups into a capital plan.”

Destination has also hired a marketing director, who begins work later this month, and a P.R. firm has been tapped to advertise for the Algonquin through direct mailings and brochures with a “fresh new look,” according to Mr. Goodman.

Previously, P.R.-such as there was-was handled in-house by Barbara McGurn, who first visited the hotel in 1942 and describes her job at the Algonquin as “wearing many hats.” She books music for the Oak Room and hosts the Tea and Tour program. In October, Ms. McGurn will organize a poetry event in honor of the Algonquin’s and The Times [of London] Literary Supplement ‘s joint centennial. “I think it would be wonderful to have an American read Sylvia Plath and a Brit read Ted Hughes,” she said. “But maybe that’s too controversial.”

She’ll have to ask the boys over at Miller Global Funds what they think about it.

-with additional reporting by Noelle Hancock Staff is in flight as the Algonquin Gets New Owners