Hotel opens under pressure

Back Bay's Mandarin Oriental may face financial challenges

The Mandarin property also features four wining-and-dining establishments including Asana. (David L. Ryan/Globe Staff)

Developers had already spent nine years painstakingly designing the posh $300 million Mandarin Oriental Boston complex when they realized the hotel's front door was in the wrong place.

On the suggestion of a Chinese feng-shui master hired by Mandarin Oriental Hotel Group to inspect the Back Bay hotel, retail, and residential property, the luxury brand in 2004 moved the entrance 50 feet. Now, when the hotel opens tomorrow, there will be a clear view down Fairfield Street toward the Charles River from the street-level lobby.

That, said general manager Susanne Hatje, will bring "the good fortune of running a business."

It appears not even the Mandarin's rainforest showers, mother-of-pearl ceiling tiles, museum-quality artwork, and 42-inch in-room flat screen televisions can guarantee the hotel's financial success in Boston - a notion that's especially palpable now as the city's first Mandarin Oriental debuts right as excess-driven Wall Street washes out.

"Even though they're a strong luxury brand, it will be difficult for them to avoid the pressures that are happening on average daily room rates in the city," said Reed S. Woodworth, vice president of PKF Consulting Inc. in Boston, which analyzes and forecasts hotel occupancy and room rates.

PKF projects the average prices Boston hotels will be able to charge for their rooms in 2009 will increase just 2.1 percent from 2008, significantly falling short of the long-term average increase of 3.2 percent.

And it forecasts revenue per available room - a key ratio indicating the financial health of a hotel - will rise less than 1 percent next year before rebounding in 2010 with an impressive 9.3 percent increase.

Hatje said travelers will be more price-sensitive for a while, but she isn't concerned about scaring them away with starting published rates ranging from $625 per night for the Mandarin's smallest guest room to $8,000 per night for its largest, the 2,600-square-foot Dynasty suite. She said reservations at the hotel, which has 136 guestrooms and 12 suites, are going "very well" and will likely exceed the company's sales forecasts for rooms as well as events, functions, and meetings.

"We get bookings right now. We see lots of parties for the holiday season already. We have weddings booked," even though customers haven't been able to tour the property yet, she said. "There is interest and curiosity, certainly, about receiving a new property to the market."

The Hong Kong brand's exclusivity helps. Boston will be its fifth US location. Worldwide, the Mandarin only has 21 other hotels open and 18 more in development - almost always in cities that could be considered global capitals, such as Tokyo, London, and New York.

"It's the best thing to happen to Boston since XV Beacon," which is a lavish 60-room boutique hotel, said Paul J. Sacco, the chief executive of the Massachusetts Lodging Association. "They're going to have the highest rates in the city and - even though they're not rated yet - they'll run at a five-star level."

The hotel will offer a level of refinement even Boston residents can relish without checking in. The Mandarin complex - co-developed by the hotel group and Stephen R. Weiner's firm, CWB Boylston LLP - boasts lobby lithographs, grand staircase wood engravings, and other publicly displayed pieces by artists who have been hailed in major galleries or exhibitions at venues such as the Museum of Fine Arts in Boston and the Venice Biennale.

The Mandarin property also features four wining-and-dining establishments - Asana, M Bar and Lounge, L'Espalier and Sel De La Terre - as well as Gucci, Italian fine linens purveyor Frette, First Republic Bank, and Mizu, a high-end salon by Elan Sassoon, son of the legendary hair stylist Vidal Sassoon. While many of those are already open, the Mandarin's highly anticipated 16,000-square-foot spa won't open until Oct. 22 because of damage from a four-alarm fire in March, which also delayed the hotel's opening from July.

These amenities will be only an elevator ride away from the complex's 49 condominiums and 35 apartments. The residents, who shelled out $2 million to $14 million for one of the sold-out condos, will also be spoiled with full access to the Mandarin's housekeeping, in-room dining, and concierge services.

During a tour of the 14-story hotel last week, Hatje revealed several of the hotel's amenities. For instance, each guestroom features a walk-in closet, a mirror built into the wall of the spacious rainforest shower, and an angular sofa covered with grooved silk and cotton cushions.

The dozen suites have furniture custom made and designed by Frank Nicholson, such as a chestnut brown dining room table topped with tiger's eye golden quartz.

And the Oriental Suite boasts a marble bathroom with a Jacuzzi bathtub that a guest can relax in while watching a 15-inch television, which is discreetly embedded in an adjacent mirrored wall and controlled by a waterproof remote control.

The Mandarin wasn't built with only leisure in mind. Meeting attendees can view a recording of that day's sessions on a secure channel in their guestrooms. Prominent guest speakers can discreetly reach the mahogany- and satinwood-trimmed ballroom by riding a private elevator from the garage to a suite with a private bathroom, where they can freshen up while security stands guard in the hallway adjoining the ballroom.

All the elements of the hotel were driven by luxury - and convenience. For instance, the hotel developers spent a year convincing the city and community groups to shift - by about 100 feet - two Boylston Street traffic lights and the crosswalk closest to the hotel.

The result? The valet service can deliver cars to guests at least a minute quicker.

"Not an easy thing to do, move two stop lights," said Robin A. Brown, a veteran upper-crust hotelier who began co-developing the complex with Weiner 13 years ago.

But he said those changes were important - just like relocating the front door. "What's the arrival going to be like, and the departure? It's the first impression and the last impression."

Nicole C. Wong can be reached at nwong@globe.com.