How To Make Money Selling Artwork In Hotels

How To Make Money Selling Artwork In Hotels
http://www.metropolitanartgroup.com/

In the winter of 2003, two globetrotters met on a flight from New York to Los Angeles and started chatting about their travels. One of the fliers, a fine-art dealer, wondered why the art selection at many top-notch hotels was so poor.

"The 'poster art' on the walls degraded the entire experience of staying in a five-star hotel," says the art dealer, Vincent Vallarino.

The other traveler, a hotel-management veteran, agreed -- and the seeds of a small business were planted. The following year, they set up shop as Metropolitan Art Group LLC and approached upscale hotels with an original pitch. Metropolitan, or MAG as it calls itself, supplies the hotels with fine-art prints to gussy up their rooms and common areas. The hotels can then sell copies of the prints to guests who want a memento of their stay.

Show Me the Monet

So far, MAG has teamed up with hotels such as the Plaza in New York and the Savoy in London, providing them with a range of artwork -- from household names like Monet to hot contemporary artists like Peter Brown and Guy A. Wiggins. Guests can get their hands on prints for $150 to $1,500.

MAG says the arrangement offers the hotels two main benefits. For one, the hotels get a cut of the print sales. Then there's prestige. Each print comes with a museum-style plaque identifying the piece as part of the hotel's signature art collection -- which makes travelers associate the hotel with the high-toned artwork.

Pam Carter, director of public relations at the Savoy, says the hotel liked MAG's pitch because it presented the hotel "with a steady revenue stream while enabling [us] to bridge [our] cultural past to [our] present." Claude Monet spent the winters of 1899 to 1901 as an artist-in-residence at the Savoy, where he began work on more than 70 canvases.

A Dallas couple, Leon and Susan Holman, gush over the $1,015 print they purchased at the Savoy in January. "Our copy of 'Houses of Parliament' reminded us of the view at dusk from our room at the Savoy during our 30th wedding anniversary," says Mrs. Holman. "It's the most meaningful work of art we've ever owned."

Of course, hotel merchandising isn't entirely new. Many hotels have long sold branded items such as bathrobes. And in the late 1990s, the practice kicked into high gear, with hotels offering whole catalogs of tony goodies -- everything from simple knickknacks to designer beds. Some estimates peg the hotel-merchandising market at $60 million and see it topping $100 million within the next few years.

MAG, a closely held firm, won't disclose its revenue. But Sidney W. Davidson III, chief executive officer and managing partner of MAG, says that year-over-year sales growth was 15% in 2006 and is expected to reach 20% to 25% for 2007.

For an idea of the company's take, consider this: During a four-month trial in 2005, the Plaza Hotel sold 170 limited-edition prints from MAG, generating $150,000 for MAG and $20,000 for the hotel, according to a company memo. The hotels usually pocket 10% to 20% of the revenue for print sales; the artists get 10%. If it's a classic piece, like a Monet, then MAG and the hotel divide the revenue.

Art of the Deal

Part of MAG's success has been its mix of talents. Its officials boast a wide variety of backgrounds, including art dealers and former investment bankers. Mr. Vallarino, for one, has been active as a dealer and gallery owner for over 30 years.

That combination of backgrounds helps MAG significantly when it comes to marketing. Most small businesses have to hustle to make a name for themselves among customers. But MAG's members have deep contacts in the hotel and art worlds, which helps them get in the door and land deals.

Moreover, say some enterprise experts, the company has positioned itself well to piggyback on the cachet of the posh hotels. "Travelers choosing to stay at high-end hotels often prefer to associate themselves with a very specific brand, much like wearing designer clothing," says Chekitan S. Dev, associate professor of marketing and brand management at Cornell University's School of Hotel Administration in Ithaca, N.Y. And that can translate into big sales for companies like MAG that supply the hotels with branded goods.

When MAG teams up with a hotel, it studies the look and feel of the property and recommends artists who complement the décor and setting. MAG reviews the artists and their work with the hotel management and they jointly select a best fit. The two also work together to figure out where to place the artwork in the hotel. The pieces are then marketed to guests in a variety of ways, from wall plaques to catalogs in the guest rooms and gift shop.

Blue Period

Not all of MAG's projects have been successful. In its latest venture, a trial partnership with the Waldorf-Astoria in New York, MAG has seen slow sales.

Mr. Davidson says a number of factors are at work. For one thing, the Waldorf-Astoria project represents MAG's first entirely commissioned line of artwork, so the pieces don't have the same built-in recognition among guests.

In addition, MAG is still trying to get the hotel to put the artwork in higher-traffic areas, such as the main lobby. For now, the prints are mostly showcased in an arcade that connects the Park Avenue entrance with the garage, an area that's home to a high-end flower shop.

James W. Blauvelt, executive director of catering and special events at the Waldorf-Astoria, believes print sales will pick up with the fall ball and winter holiday season.

"MAG offered an original product for us to attach our brand to that was both interesting and authentic," Mr. Blauvelt says. "Not having engaged in a project like this before, we are eager to see how things develop from a guest-interest standpoint."

Currently, MAG is considering expanding its concept into a new venue: cruise liners. Guest artists may offer classes on board, while they produce artwork that might be displayed on future excursions.


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