Fear is drifting through the corridors of the Watergate Hotel, a favorite resting place of the rich and famous who breeze in and out of Washington. Word that a change in management is imminent has touched off speculation that the hotel may shed its panache in the process -- not to mention one of its most celebrated attractions, chef Jean-Louis Palladin.
The Watergate's owner, British Coal Board Pension Funds, is considering hiring managers, according to Wendy Luscomb, a spokeswoman in the Coal Board's New York office. She said the ownership has held discussions with several hotel management groups "on a confidential basis" but that she could not name the companies or discuss details of their proposals.
The present management firm, the Watergate Companies Inc., which is owned by the Coal Board, also is bidding for the contract, Luscomb said, adding, "We're not committed to making any change." A decision is expected by April 15.
One group submitting a bid has proposed to redirect the hotel toward the tourist market, seeking to attract those who come to town to see the Washington Monument instead of those who come for dinners at the White House, said one source.
According to a hotel industry insider, however, the Watergate's owners are more interested in several bids they have received from European hotel chains. The hotel "needs refurbishing. Europeans would put the charm back in it," she said.
European charm, one assumes, would be the preference of Kennedy Center performers who often stay in the Watergate, and of others among the famous -- including Katharine Hepburn, Barbara Walters, Garry Trudeau, Andy Warhol and Dan Rather -- who prefer the hotel.
The Epicure Group, an Austrian hotel company, apparently shares this view. Epicure submitted a proposal saying it would use the Watergate's "large rooms, suites and underutilized space" to transform the structure into a five-star luxury hotel "catering to the needs of the upper income bracket" with "a comprehensive range of health and beauty services." A copy of the proposal's executive summary was obtained by The Washington Post.
The Watergate today "is characterized by comparatively low occupancy rates and unacceptable returns," according to Epicure, which has proposed raising the average room rate from $163 a night in 1986 to $177 in 1988, and increasing the occupancy rate from 68 percent this year to 78 percent two years from now.
This will be easier said than done: A glut of hotel rooms already exists in Washington and is growing rapidly, with experts predicting that the present citywide occupancy rate of 69 percent could drop to 50 percent within 18 months.
Rumors circulating around the hotel include one that the Watergate has been sold -- a report its owners deny. Nevertheless, the talk is making Watergate employes nervous, including its most famous one.
"The future is really uncertain here," Jean-Louis Palladin said last week. "It is totally a black hole."
While the chef would like to stay in Washington -- "My kids are American now," he said -- he is seriously considering an offer to run a restaurant in France on the estate of Cha teau Margaux. Next month he will go to France to look over Le Relais de Margaux, which he depicts as a beautiful old property akin to Eugenie les Bains, the three-star restaurant and spa of chef Michel Gue'rard. Palladin had a two-star restaurant near Gue'rard's before he came to the United States in 1979 to open Jean-Louis restaurant, and he still dreams of getting a third Michelin star.
In Washington Palladin has been negotiating to open a restaurant with a rooftop terrace near the Hyatt and Grand hotels, in a pair of town houses. He has also signed to be food consultant to the Parker Meridien Hotel's Maurice restaurant in New York, a position vacated by Parisian chef Alain Senderens, who is planning to open another restaurant in New York. Palladin's plan has been to visit the Maurice monthly while he runs another restaurant, as Senderens did.
If he were to stay at the Watergate, said Palladin, the restaurant would need redoing -- about a half million dollars' worth, he estimated. The kitchen would need equipment, and the dining room would need redecorating and new chairs and tables.
He sounded doubtful about the prospect, worrying that a new management group would not have experience in American hotels and would be unwilling to commit substantial resources to the restaurant.