The boutique hotel industry has finally come of age. Twenty-one years after it was invented by Ian Schrager, a nightclub entrepreneur, in New York, his business is going public. But the company he created, Morgans Hotel Group, will have to cope without him; he resigned as chief executive last June. It will be interesting to see if the group can retain its cutting edge, especially as the segment has become steadily more crowded.

Schrager pioneered the concept of cool design, with trendy bars and restaurants, inside urban hotels. He understood the power of public relations and destination locations: he and partner Steve Rubell previously ran Studio 54, the ultra-hip 1970s New York discotheque.

Unfortunately they got into trouble with the taxman, and Rubell died of Aids; but despite that Schrager got big in the hospitality business.

Traditional hoteliers believe the whole "boutique" concept is a triumph of form over content, and think affluent travellers prefer conventional five star operations such as Four Seasons or Orient Express. But the younger generation of leisure visitors and executives prefer going to funky, innovative hotels with an exciting atmosphere, good-looking staff and eclectic designs - and that the niche is only going to get bigger.

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