Luxury Hotels

JLL Real Views - How Paris Takes Luxury Hotels to a New Level - By Neasa MacErlean

Hotel de Crillon - Suite
Hotel de Crillon

JLL

When the rich and famous head to Paris, there are a select few addresses that their chauffeur-driven cars whisk them to.

These are the Palace hotels, the crème de la crème of its luxury hotels scene, which used to be seven and but are soon to be fourteen.

“The Paris palaces have history, heritage, beautiful buildings and they cannot be replicated,” says Gwenola Donet, JLL’s head of Hotels and Hospitality in France. “They’re a key reason why Paris will remain one of the three gateway cities in the world for the top hotels, along with London and New York. There will be palaces in emerging cities such as Hong Kong — but you cannot recreate the atmosphere of Paris elsewhere, the remarkable real estate and the supply of these hotels is very limited.”

In order to make the grade, hotels must meet strict criteria as set by the French Ministry of Tourism in 2010 to “embody French standards of excellence and contribute to enhancing the image of France throughout the world”. Guests of the Hotel de Crillon, for instance, can stay in the Suite Marie Antoinette where the Queen used to take piano lessons. Rooms have minimum space requirements and staff must be trilingual.

Such luxurious surroundings do not come cheap; since 2013, the average tariff for an overnight stay per room in the Palace category is nearly €1,000 (Average Daily Rate), according to Donet. “This is a rate unrivaled anywhere in the world across a segment of 1,800 rooms, even in New York and London,” she says. But for many of these Palaces the high price tag reflects ambitious refurbishment projects not to mention the costs of providing ultra-luxurious standards of service behind the scenes.

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A refreshed look for a discerning audience

Refurbishment projects have allowed owners to change parts of the Palace formula but they have focused on updating the concept of luxury without undermining the traditional charm. For instance, the Ritz reduced its number of bedrooms from 159 to 142, and Le Royal Monceau went down from 260 to 149. This allowed the hotels to allocate more private space to guests. “The new rooms are much larger — a hybrid of the conventional Palace rooms and apartments,” says Donet. “And there is a higher proportion of suites.”

Today’s guests are more likely to want more spacious, slightly less formal accommodation than their predecessors. “People visiting Palace hotels now are younger, and are searching for a good balance between ultra-luxury and lifestyle, including a more casual approach,” says Guillaume Canciani, JLL Director in France for Project and Development Services. He cites the Hôtel de Crillon, reopened in July after a four-year revamp. “The staff are all trained to be able to respond in a manner that appeals both to the traditional guest and to ultra-wealthy Millennials who wants to feel like home with unlimited and immediate bespoke services,” he adds.

The refurbishment of several Palaces has come at a time when ownership switched away from owner-managers to the major up-market brands. The Hôtel Plaza Athénée, famed for its Eiffel Tower Views, was acquired by the Dorchester Collection in 2001 — and then expanded, refurbished at a reported cost of over €200 million and reopened in 2014. The Dorchester also purchased the oldest Palace, Le Meurice, which dates back to 1835 and which was a favorite of Salvador Dali. The Oetker Collection owns Le Bristol, a staging post for George Clooney, and Raffles is the operator of Le Royal Monceau where Winston Churchill used to stay.

“Like the rest of the Paris hospitality market, the Palaces are now highly branded,” says Donet. “This gives them more exposure as the brands draw on their distribution networks for guests. These owners have taken an extremely long view. They needed to because Palaces take a lot of money to build, renovate and maintain.”

Creating a buzz in the public spaces

Although the outside of the buildings is all about old world glamour, inside modern hospitality strategies are helping the Palaces to appeal to modern guests. “Hoteliers now focus on designing lively public areas to attract local socialites,” says Canciani. “That is crucial to their profitability. Le Crillon offers a men’s lounge area, a barber shop and a retail space curated by the French trendsetter Thomas Erber. Guests often go from one Palace to another and wants to be entertained.”

While the vast majority of guests who stay in the Palaces are from outside France, many also enjoy mixing with well-heeled locals – something that the hotels are keen to encourage, Donet points out. The Ritz, for example, runs fashion shows. The Four Seasons Hotel George V goes in for stunning Christmas decorations, and the Plaza Athénée turns its central courtyard into an ice rink for mid-winter. “There is a greater focus on events. There is a continuing buzz — in order to encourage Parisians to drop in and foreign guests to return.”

Although the Palaces have their loyal fans among their affluent client base, the increase in the supply of rooms has hit occupancy rates, taking them below the old 70-75 percent marker of the pre-2010 era. Since then the supply of rooms has increased 60 percent but it’s yet to be matched by a 60 percent rise in demand. “We are at the end of a time of massive change,” says Donet. In the next four years occupancy will reach 65-68 percent, which is a sustainable level for Palaces. The average daily rate has also significantly increased after renovation work.”

For many, it’s a price worth paying. The Palaces make a contribution to world culture that goes way beyond their opulence. From the Ritz’s Bar Hemingway to the wedding cake facade of the Shangri-La, they set parameters for the ultra-luxury hospitality sector. As Donet says: “It all works because this is Paris and the property is excellent.”

Source - JLL Real Views



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