'You can't fool the public': Studio 54's Ian Schrager on great service, hip hotels and the last days of disco

Schrager used design to give us the ultimate nightclub and the boutique hotel. Now he's going global, says Alexander Fury

It feels appropriate to meet Ian Schrager at a hotel. Not just because hotels are his home-away-from-home (he loops around the world several times a year), but because they're also his stock-in-trade. Schrager is arguably the highest-profile hotelier of the past 30 years, his name synonymous with a cutting-edge, painfully cool vein of boutique hotels that began with New York's Morgans.

Schrager opened Morgans in 1984 with his business partner Steve Rubell, with whom he'd founded Studio 54 seven years earlier. Studio 54 was the nightclub, the definitive clubbing experience all other venues have been compared to since, including Rubell and Schrager's Eighties foray, the Palladium. That's what they wanted Morgans to be, too – the hotel. Rubell died from an Aids-related illness in 1989, but he managed to see the blossoming success of the design-led boutique ethos that turned hotels hip. But boutique hotels are finished, says Schrager.

Surprisingly, we don't actually meet in one of his hotels. It's not for want of one in London – although he sold Morgans Hotel Group in 2005, both The Sanderson and St Martins Lane are very much Schrager's creations, with Philippe Starck responsible for the eye-catching interiors that make them landmarks to the present day. Instead, our interview happens in the quieter, less flashy Charlotte Street Hotel in Soho. The venue may not have been directly shaped by Schrager, but it has all the design accents of his own 'boutique hotel' model.

It's impossible not to talk about accents with Ian Schrager. Not just design accents, but Schrager's own – it is heavy, Sopranos-worthy. You can be in no doubt he's a Brooklyn native: in fact, having heard his raspy growl over the phone previously, I expect him to be chomping on a cigar, his straining girth packed into natty double-breasted pinstripes. Instead, he's in shorts, nursing a Starbucks. Which is the uniform of the modern New Yorker-on-the-go, a movement that Schrager is practically the poster-boy for. "I travel short because I have a two-year-old son: I don't like being away from him," says Schrager as the opener to our interview, underlining that time is precious, and that he's not only a hotel-owner, but an occupier, too.

Schrager didn't start off in the hospitality business. He began in law, to nurture his interest in commerce. But his legal ambitions didn't last long. "I practised law for three years. I had a very successful case, I changed the law and I got bored with it," he says. "At that time, it was the Seventies, when the sexual revolution was just coming into full swing. The gay population was emerging and everyone from Europe who wasn't attached was rolling into New York, everyone from California who wasn't attached was rolling into New York. I used to drive around at night and see people waiting on the lines to get into a nightclub and taking abuse to get in. So I thought, 'That's the business I gotta get into!'."

Alongside Rubell, Schrager's first venture was 1975's Enchanted Garden, a discotheque in Queens. Two years later they opened Studio 54, a legendary venue now synonymous with excess, celebrity and disco-ing Warhol acolytes. "Studio 54 was a time, a certain freedom," recalls the designer and Studio 54 fixture Diane von Furstenberg. You can't help but ask if it was a way of thinking, too? "I don't know if you thought that much! Thinking isn't the first word that comes to mind," she laughs. "It was the late Seventies and it was all about Ian Schrager and Steve Rubell's Studio 54," says Glenn Pushelberg, a designer who has worked with the hotelier on a number of projects over the past decade. "The club was everything people remember it to be. It had an incredible vibe."

Studio 54 is, arguably, still seen as the blueprint for nightclubs. It wasn't Schrager and Rubell's last – despite the club being raided in December 1978 and the pair being sent to prison the following year for tax evasion, obstruction of justice and conspiracy, the club stayed in their ownership until 1981. And they went on to create the Palladium, a Studio 54 for the Eighties designed by Japanese architect Arata Isozaki and packed with art by the likes of Jean-Michel Basquiat, Julian Schnabel and Keith Haring, which opened in May 1985. But Schrager himself argues that, by then, the magic had gone.

"Studio 54 had an original idea and Palladium didn't," he reflects. "Palladium was a recycled, bigger, better Studio 54. It had a heart, it had all these kind of bells and whistles, but it wasn't that original idea. You can't really have those kinds of major successes unless it's an original idea. You can't fool the public. They know! They know something really original. They may not be able to talk about it, but they get it. Palladium was bigger and sophisticated and more money was spent, the visual effects – we did things with video that had never been done before, we did things with lighting that had never been done before – but it wasn't an original idea. Like Studio 54. That's why I stopped doing nightclubs. Because I have nothing new to offer." And hotels? "If I had nothing new to offer with hotels, I'd stop doing hotels."

You could argue that Ian Schrager, in the second act of his glamorous career, brought the mood of his nightclubs – the glitz, the edge, the sense of a space you've just got to visit – to the previously fuddy-duddy world of hotels. The lobby, traditionally a grand but rather dead space, becomes a pseudo dance floor, a place for guests to mingle and be seen. "Coming from the nightclub world, with no discernible product other than the magic I was able to create, gave me an edge in the hotel business," says Schrager. "I was still gonna rely on that magic, that stagecraft, that alchemy. Something happens, the elements come together and it is totally more than the sum of the parts."

His original boutique hotel concept, focusing on design over everything else, including even service, shook up the hotel world in the Eighties. Morgans was modern, and it changed the luxury hotel game. "It took motivation, not a business plan," says Schrager. "I never had a business plan. If I did… I don't want you to take this the wrong way… if I did then maybe Steve and I would be the Hilton or Marriott today. Because there are thousands of versions of what we did, and I think the entire industry has changed."

Schrager is hoping to do it all again with his new big idea for hotels – the Edition series, ironically conceived in collaboration with the Marriott group. "I thought it would be fun to do something on a big scale," says Schrager, gleefully. "I've never done it before." And big is the word: after a delay due to the recession, the Edition partnership, founded in 2007, is rolling out in some hundred locations around the world. There are hotels slated for New York – in the iconic Clock Tower building at 5 Madison Avenue – and Miami, and one already open in Istanbul. Edition London opens its doors next. There's still a focus on design, and an impressive roster of talent on the books.

Architect John Pawson is working on the Miami Beach Edition, Gabellini Sheppard Associates created the Istanbul Edition, and interior design firm Yabu Pushelberg is behind the forthcoming London Edition. But in the Edition series of hotels, design is coupled with luxury and service, which Schrager sees as Marriott's expertise. George Yabu, one half of the Yabu Pushelberg design team, characterises Edition as "essentially, a potent competitor to W hotels which, ironically, had a mandate to expand upon Ian's concept of the now-derided term 'boutique hotel'."

For Schrager, the important thing is control. "We come from different perspectives," he says of his own approach versus that of the Marriott group. "My view was that we have to control every aspect of it. We can't compromise on anything. The only way to do that is if you buy the hotel and own the hotel. When a third party developer owns the hotel – which is what their [Marriott's] business model is… they're putting up the money, and you have to respond to that."

In September, the London Edition will start trading as a 173-room luxe retreat in the old Berners Hotel, on the same street as Schrager's The Sanderson. "I would always want to do a hotel in London, because it's one of those 24-hour international gateway cities," he says, summarising Berners hotel as "totally neglected, under-utilised, not meeting its potential." In other words, the opportunity of a lifetime. "It doesn't have to be fashionable," Schrager says of his choice of locations, "but it has to have something about it that turns me on in the same way a person would react to a lover. Something visceral."

Alongside his latest hotel project, Schrager is trying to reinvent the domestic space, too. At least, high-profile, high-cost, high-rise homes. Is he overreaching himself? "Nightclubs, restaurants, hotels, residences, homes, maybe even offices… they're all kind of the same thing," he argues. "Some of them are more civilised than others… the nightclub being the least civilised. To me there's a logical progression; I could do an office building. I could get a value, the same kind of social, cultural considerations I did with a hotel and do something for the office." Schrager's luxury apartment project – he calls it 'Residential Pret-a-Porter' – will open first as part of the Miami Beach Edition, with 26 homes across the hotel's two towers, designed by John Pawson. The properties won't be completed until 2014 but are already selling.

Maybe luxury apartments in hotels are the next big thing. After all, Schrager is renowned for knowing exactly what the style set want, a few all-important seconds before everyone else does. "We had lunch with [Schrager] – around 1994, right before he opened the Delano Hotel in Miami Beach," recalls Pushelberg. "During our lunch he proclaimed that Miami Beach was going to be a hotspot that would attract jetsetters and wealthy sun-seeking north-easterners. I remember thinking 'Miami Beach?' Of all places! But we realised that he truly was the zeitgeist of where the world was going."

Fast-forward 20 years and Yabu Pushelberg are the guys overseeing the interiors of the Miami Edition, a stone's throw from the original Delano. Schrager himself, naturally, provides the sharpest metaphor for his ability to spot trends, when speaking of himself versus Marriott: "I'm like this high-powered speedboat, they're like a battleship. They don't move the same way". Namely, they have the weight and the heavy artillery, but Schrager has the speed.

Given the geographical proximity of many of Schrager's new hotels to his old ones, you wonder if he is treading old ground, or maybe trying to relive his former glories. "When I started working with Morgans I really had the market to myself, nobody else," says Schrager. "And now there are other people out there doing it, and there are big companies doing it. Some are doing it well and some are not." Presumably, it's down to Ian Schrager to show them how it's really done – again.

TripAdvisor verdicts: Schrager's empire

Delano South Beach

"Favourite spot in Miami"

To put it simply: The Delano lives up to the hype. It's figured out a way to provide the tranquility of a day at the beach while allowing an atmosphere that can only be described as posh.

Talitalle

Hudson New York

"If you like what it is, you'll enjoy it"

I feel like I'm on a train or a ship! There is something very comforting about a very well designed small space. I like the ambiance. It is youthful and classy.

Alan Glazen, Cleveland, Ohio

Edition Istanbul

"Marriott on Steriods"

Excellent. Every touch is perfect. Rooms are spacious and elegant. All is modern yet with high-class contemporary finishes. 5 stars are well deserved.

Hanky 53, Vancouver

Sanderson London

"Trendy hotel"

A pretty cool hotel to stay in. The rooms are decorated in a very modern motif. Not that functional but really nice to look at and fun to sleep in.

Nate 501, New York City

Clift San Francisco

"Smouldering bar, huge suites, excellent location"

This hotel is styled in the usual Morgan Group way, pale pastel hues in bedrooms and suites. If funky is your style then the Clift is for you.

Lady Rawdon, Leeds