By Juliet Bennett Rylah
WEST HOLLYWOOD — After more than two decades on the Sunset Strip, The Standard hotel in West Hollywood closed permanently on Jan. 22, citing financial issues stemming from the ongoing pandemic and increased lease costs.
The hotel posted a statement to its website and Instagram stating that “despite 22 years of unconditional love for our hotel, our guests, our team and our community, the hotel was unable to prevent a significant increase to its lease, which makes operating the property impossible.”
The post highlighted the hotel’s many music and performance nights, its iconic electric blue Astroturf pool deck and The Box — a glass case behind the reception desk that frequently featured art installations and live models who lounged inside as if in their own worlds.
The post also asked fans to message them photos of time spent at the hotel, which The Standard plans to use in a digital scrapbook.
“While there are and will be more Standard hotels, there will never be another Standard, Hollywood,” the hotel said in a statement. “And though it is painful to say goodbye, we know that the community we inspired will live on. Thank you for everything. We are eternally grateful.”
The three-story building was originally constructed in 1962 as the Thunderbird Motel and later served as a nursing home. Hotelier Andres Balazs purchased the building and opened it as The Standard in 1999 with celebrity investors including Leonardo DiCaprio, Benicio del Toro and Cameron Diaz. It would spin off into the Standard International chain with additional hotels in downtown Los Angeles, New York, Miami Beach, Maldives and London.
Balazs left the company in 2017, but has remained in the hotel business with properties including the Mercer brand and another Sunset Strip hotel, the Chateau Marmont. Balazs converted the Chateau into a members-only hotel last year in the midst of the pandemic.
A spokesperson with Standard International confirmed to the Los Angeles Times that the building’s lease holder, Ferrado Group, had increased the price in 2019, rendering it “unsustainable to operate the hotel.” The hotel was unable to renegotiate and the COVID-19 pandemic has only made profits for all hospitality businesses, including hotels, restaurants, bars and performance venues, plummet.
Ferrado Group is a real estate investment firm based in Spain with an office in Newport Beach. Ferrado’s holdings include other Standard hotels, including the downtown Los Angeles location. However, a spokeswoman with Standard International told The Independent that the lease increase issue at the West Hollywood property does not apply to the downtown location.
“We expect The Standard, Downtown LA to reopen following the Covid crisis,” she said.
Hotel stays are down across the U.S. due to the pandemic, but a study from management consulting firm McKinsey & Company found that luxury hotels are performing worse than budget options. In early May, occupancy in economy hotels was at about 40%, but luxury hotels had fallen to 15%.
Economy hotels are also expected to recover faster after the pandemic. This is partly because while luxury travel and tourism have declined, truck drivers and other essential employee demographics that travel for work are still booking hotels. Additionally, luxury hotels have higher overhead costs and typically employ more people, requiring occupancy rates 1.5 higher than economy hotels to cover costs.
West Hollywood has more than 20 hotels and motels, but its primary draw as a tourist destination is its vibrant nightlife and culture and myriad restaurants and bars, not its budget friendliness. In 2017-18, the city welcomed 3.59 million visitors, who spent $1.73 billion, according to a study by Destination Analysts. In June 2020, West Hollywood Travel and Tourism Board CEO Tom Kiely told WeHoVille that visitor volume had dropped by 95%.
City News Service contributed to this story.
Juliet Bennett Rylah is a freelance reporter who covers Hollywood and West Hollywood. She can be reached at firstname.lastname@example.org.