Reinventing the luxury hotel
Agenda
• The big picture • Performance • Investment • The future
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The big picture
The luxury hotel The growth of luxury continues…
Traditional – Boutique – Lifestyle – Resort – Spa 4
Old favourites… Claridge’s, London
Four Seasons Des Bergues, Geneva
Hotel Ritz, Madrid
The Ritz, Paris
The origins of the luxury hotel were described as “traditional” 5
Traditional with a contemporary twist…
The move towards a changing demographic 6
Design takes a front seat… Andaz, Amsterdam
ME Barcelona Istanbul Edition
W, London
Major operators introduce contemporary/lifestyle brands 7
East meets west…
Peninsula, Paris Raffles, Paris
Shangri-La, London
Mandarin Oriental, Paris
Shangri-La, Paris
Paris and London are the focus for Asian luxury operators 8
Time to spa…
The Connaught, London
Rue De Castiglione, Paris
Spa operators look to urban markets 9
New arrivals…
“Prime locations, unique heritage, luxurious design and contemporary environments for international and local communities.”
“Unique tributes to local architecture and cultural traditions, created in some of the most intriguing areas of the world.” 10
Playing catch-up…
€1 00 m
€1 40 m
£2 20 m
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Luxury heads for the beach… Costa Smeralda, Sardinia
Ritz-Carlton Abama, Tenerife
Mandarin Oriental, Bodrum
Grand Hyatt, Cannes
Global brands extend their reach 12
What's in a name…
Quite a lot, if it has connotations with luxury 13
Extending your reach…
Brand extensions proliferate 14
Performance
Luxury performance – the north-south divide… 2012
£194
change
6%
vs peak
21%
2012
€405
change
11%
vs peak
8%
2012
€139
change
11%
vs peak
21%
2012 2012
€155
change
5%
vs peak
(15)%
Source: STRG 16
2012
€223
change
0%
vs peak
(16)%
2012 RevPAR / Peak (% change)
CHF 269
change
(3)%
vs peak
(19)%
Luxury is ahead of the previous peak… 8% (3)%
07
08
09
10
Whilst Europe lags 17
11
12
RevPAR premium to the wider market grows… CHF 269
£194
1.9x
€139
2.7x
2.2x
€155 2.8x
€223 €405 3.0x 3.7x
Source: STRG 18
Luxury has a price, and people are prepared to pay it
Investment
European transaction volumes remain behind the peak… 8% of total
€1.5bn
35% of total
€1.8bn
07
08
09
10
But luxury increases in importance 20
11
12
Investor interest in Europe exceeds the previous peak…
A global landgrab is well underway 21
Who said finding finance was difficult…?
PARIS
Amsterdam
Spend it and they shall come…… 22
The price of luxury…
€3.5 €0.3 €3.5 €1.0 €0.7
€2.0
> €12bn has been invested in luxury hotels in Europe since 2010 23
Switzerland enjoys a renaissance… Grand Savoy Lausanne
Dolder Grand Zurich
Alpina Gstaad
The Chedi Andermatt Buergenstock Lake Lucerne
Investment in luxury hotel development takes off 24
The height of luxury… Floor 65 viewing gallery
Floors 34-52 – Shangri-La Chi Spa
Shangri-La
Floor 32 Oblix restaurant
Europe’s highest hotel arrives 25
London is regarded as a safe haven…
Like fine art, capital floods in as optimism rules and the £ remains weak 26
What next…?
Thought process of a HNWI 27
Qatari sweep…
Since 2007, hotel investment in Europe totals c.€5bn 28
The future?
Reasons to be cheerful…
International arrivals at record levels – 1bn in 2012
51% were travelling to Europe
T&T contribution to global GDP hits 9%
Global aircraft fleet will double over next 20 years
T&T grew faster than the world economy
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Reasons to be nervous… Eurozone crisis and austerity continues Southern Europe remains challenged Consumer confidence remains depressed A soft landing for emerging markets? The US is in a political stalemate The axis of evil is in the news again The unknown….. 31
Recession, depression; I’m sorry can you repeat that…?
07
Source: Bain & Co 32
08
09
10
11
Luxury goes from strength to strength
12
13F
The luxury traveller is changing... experiential; multi-cultured
always connected
new sophisticates
socially responsible
Source: Future Poll, Deloitte 33
value-conscious
Breaking the mould… What’s next on the luxury agenda? • Sense of place (local influence is key to creating a destination…)
• Tech-savvy (in-room technology expected as standard…)
• Home from Home (emotional connection and personalisation are key…)
• Less is more (less formal F&B and service is becoming more common)
• Responsible luxury (social conscience is increasingly important for consumers)
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‘in Vogue’…? Cheval Blanc, Courcheval
Bulgari, London
Armani, Milan
Retailers re-invent the luxury hotel sector 35
Missoni, Edinburgh
More than just the décor…
Café Royal, London (David Chipperfield)
De L’Europe, Amsterdam (Cees Dam)
Mandarin Oriental, Geneva (Tihany Design)
Raffles, Paris (Philippe Starck)
“I think people’s judgement matters. Customers.” (Adam Tihany) 36
Luxury explores new markets… Four Seasons Baku, Azerbaijan
One&Only, Montenegro
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Fairmont Baku, Azerbaijan
Ritz Carlton Almaty, Kazakhstan
The 5 B’s…
Bar Bedroom Bathroom Breakfast Bill Think like a traveller – get the 38
Basics right, again and again, and again
Finally, my personal wish list…
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•
Don’t tamper with the classics (club sandwiches with egg mayonnaise; orange-flavoured apple bircher muesli)
•
Get rid of plastic bottles and; more importantly; it should be free (tiny plastic water bottles for €6 are an affront to the brand; and the environment)
•
Free the internet (guests expect to be able to communicate instantly; not go through a technology test)
•
Walk-in showers should be water-tight, and position the downlighter if you need it! (why do so many showers flood? And why should I be blinded at dawn by a 100w halogen searchlight?)
•
If you have a desire to go tech-heavy, make sure it is designed for novices (the trend towards lights operated by computers should be suspended until they work whilst lying in bed! And that goes for the AC and the TV!)
•
Memories are made of this (when staying in a grand hotel I expect postcards, matchboxes, swizzle sticks and other items that distinguish the unique from the chain)
•
Chefs that rule the roost (I expect some choice in my meal; not a tasting menu that is a personal ego trip)
•
Minibar (stock it with things you want to eat and drink, and at a sensible cost, or even; free!)
And, remember… “A luxury hotel is like a beautiful woman. If you do not look after her and bejewel her from time-to-time, no one will desire her.”
Biki Oberoi, Chairman, Oberoi Hotels & Resorts “ I give people a lot of credit. I believe that people are savvy when it comes to design and definitely savvy when it comes to what they like and don’t like. And I think they deserve more than what they are getting today.” Adam Tihany
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Q&A
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