Ahh... the good 'ol Establishment. I love telling the story of when I went to the Establishment bar on a friday night in February and I was sent around to enter through "the side door" because I wasn't wearing black or navy pants!
To answer your inquiry I have never been to the Hotel part, but the local Sydneysiders were telling me about the exclusive restaurants and swank bars for guests only. Another American consultant had stayed there and said that the security was peculiar but I don't recall specifics.
Is it going to be good for your Chicago friends? I really couldn't tell you. I would surmise that this boutique hotel isn't for everyone.