The Mandarin Oriental hotel group recently announced a new package featuring three-night stays at each of its properties in Miami, New York and Washington, DC. The deal includes staying in the presidential suites, transfers by private jet between the hotels, shopping in Miami with a stylist and personal assistant, theatre, jazz and opera tickets in New York, a three-hour yacht cruise, spa treatments, a goodie bag, commemorative iPod and limo tour of Washington with champagne.
The total cost is $220,000 for two. According to the PR spiel, the package “helps to support the private jet trend that is becoming more and more commonplace”.
Commonplace? Even the cost of a massage at the Mandarin Oriental New York is hard to stomach (the “ultimate” body massage costs $305 for 80 minutes plus 13.75 per cent tax). The therapists are excellent but, by anyone’s reckoning, that’s a lot of money.
To bring it back down to earth, the FT approved a budget of £1,000 for this article to cover an incognito stay at Skibo Castle, the luxury hotel in Dornoch, Scotland. It wasn’t enough. The all-inclusive £995-a-night charge (the August non-members’ rate) requires a minimum two-night booking and that’s for the cheapest accommodation.
Luckily, I had stayed at Skibo before and I can report that it was grand enough. A live Scottish piper performed on a distant parapet as a wake-up call. There was an antique four-poster bed (as opposed to those ubiquitous five-star knock-offs), a bath that filled in seconds, falconry, golf, a substantial Scottish breakfast and a smart “hosted” dinner replete with American captains of industry and their diamond-bedecked wives.
Since then, a new owner has spent more than £8m on a refurbishment. Frankly, I can’t see how it could be worth it. Perhaps these charges are punitive, to put off wastrels like me who don’t intend to become members. (You may stay once as a non-member, then pay a fee of £10,000 plus annual dues of £4,000. For members, the rate in August is £645 a night.)
Yet Skibo reports that its membership will soon close and fees will rise in 2007 (a £20,000 joining fee with annual dues of £4,700).
According to the 2006 world wealth report published by Merrill Lynch and Capgemini, the ranks of individuals of ultra-high net worth (each holding at least $30m in financial assets) grew by 10.2 per cent in 2005, largely because of an influx of Russians and Indians.
This is affecting the hotel industry. You can feel it in the changing demographic at leading hotels: the Russians at Badrutt’s Palace in St Moritz; the Indians at the Burj Al Arab in Dubai; and the Chinese at the Carlyle in New York. All were discernible last time I visited.
Make no mistake: price inflation for top-of-the-line luxury goods and services is racing ahead. Petrina Dolby of Capgemini says: “In 2005, the Clewi Index [cost of living extremely well] rose 4 per cent while the consumer price index rose 3.6 per cent.” Hotels are included in the basket of luxury goods monitored in the global survey.
According to Smith Travel Research, the rise in price for luxury hotels in the US stands at 8.7 per cent over the first half of 2006, almost triple the nation’s 3.2 per cent inflation rate.
The rise and rise of the $1,000 hotel room seems unstoppable, whereas five years ago it was still quite unusual,” says Glen Donovan, the managing director of Earth, a London-based travel agency for 150 high-spending clients worldwide.
Take those almost-mythic Aman resorts, the super-As. Amanjena in Morocco costs $850 for the cheapest “pavilion” (the same room cost $700 in 2002). A room at Amangani in Wyoming costs $900 in high season (it too was $700 in 2004). At the newly opened Amanyara in the Caribbean, a villa starts at $1,350 a night.
As the rich get richer, the suites get more extreme. In Geneva, the imperial suite of the Hotel President Wilson costs €28,000 a night, the Villa La Cupola suite at the Westin Excelsior in Rome is €20,000 and the four-bedroom penthouse at the Setai in Miami is $25,000 (tax is another $3,250).
In the past two years, Plaza Athénée in Paris has opened its $15,000-a-night two-bedroom royal suite and Berlin’s Hotel Adlon Kempinksi unveiled its €20,000 security suite. Next year, the Four Seasons New York will debut with its much-awaited mega-suite on the 52nd floor – at least $30,000 a night. It aims to outdo the presidentials, which cost $15,000.
I am a journalist who makes a living out of luxury travel. Like many of my freelance colleagues, I have taken rooms for free. Most readers think it’s easy to expound the glories of five-stars when you haven’t paid for the holiday. It is but I’m not altogether comfortable with it. As the prices keep rising, I’m not sure if all these glittering hotels are worth it. It seems to me that some are now priced way beyond the concept of value. I’d also wager that average five-stars get away with it because of the cosy relationship between the media and PRs that can easily defuse difficult questions about value. I know I have fallen prey to that dynamic.
“It’s a can of worms,” says Victoria Fuller, of PRCo, a public-relations company that specialises in luxury travel and lifestyle with offices in London, France, Germany, New York, Milan and Moscow. “The way journalists approach it is very different, from the US who need to pay for things – the post-Enron effect – to other markets where complimentary stays are the only way the industry can work.”
So no one is pulling them up on their rate sheets – the hotels are simply reacting to supply and demand. Take Sandy Lane on Barbados at Christmas. It costs $25,000 a night for the five-room villa, with a minimum 14-night stay. Sardinia in August is another warped market – a top suite at Cala di Volpe goes for €22,000 a night, at Hotel Pitrizza for €12,760.
“There might be a backlash,” says Donovan. “I cannot quite see how the trend can continue. Certainly, value for money matters to our clients, even among the biggest spenders. This is because they are discerning. They understand that a £2,000 holiday can be a rip-off and a £100,000 holiday can be good value.”
As Filip Boyen, of Orient-Express Hotels, says: “The top end of the market has moved far beyond supplying a hotel room. The guest wants us to be facilitators, to open up a place or a culture. Even the most affluent have a sense of value. But they find that in an experience, not simply within the four walls of their accommodation. In this way, the luxury hotel is way and beyond what it used to be even 10 years ago. Put more simply, people don’t question the money if there’s magic.”
Recently, a friend pulled me up over an article I wrote about a $500,000 summer rental in the Hamptons. My only recourse was to remind him that though rich, which he is, he’s not quite rich enough. There is a super-stratum out there affecting prices. This is the root of an emerging problem, namely that over-ambitious lesser hotels pretend to heights they cannot reach.
The modern English country house establishments are among the worst offenders. Yes, they have struck a chord with a young, flush clientele. But on both occasions that I visited, Babington House in Somerset failed to deliver service to match its room rate, while Cowley Manor in Gloucestershire charged £5 for a room-service delivery – a fee recently withdrawn – on top of a £200-plus room rate. Prices in Seychelles, Mauritius and the Maldives are tottering on the brink of brazen, which has much to do with the premium now placed on “private islands”.
As for London . . . “The rates don’t surprise me,” says Sinclair Beecham, co-founder and co-owner of sandwich chain Pret A Manger, who recently opened a 205-room hotel on London’s Great Eastern Street, which caters for a very different sector of the market. Rates at the new Hoxton Hotel start from £79 for a double.
“London is a very expensive city right now and hotel occupancies are good,” Beecham says. “What I find frustrating is the middling hotels that charge these tip-top prices. And the extras. Why charge £19.99 for internet access? It’s now a basic requirement. Why charge £2.50 a minute when it costs two pence? It’s like paying £2.99 for a bottle of water or £20 for breakfast when all you want is coffee and a croissant. That’s the tipping point that drives even the wealthy crazy.”
Of course, all this is subjective and depends on your definition of luxury. Bullet-proof glass doesn’t do it for me but I have a penchant for 100 per cent silence (why I think the Carlyle so special).
I don’t care about having a personal 24-hour butler – at the One&Only resorts in Mauritius I thought them nice but annoying. I just want someone who can work the DVD player. (I think of the Lowell in New York, where staff quickly respond without having to provide an on-call, personal Jeeves.)
Donovan is candid: in his opinion, only 1 per cent of five-stars are worth it. Perhaps that’s why we need middlemen – agents, tour operators – to protect us.
It goes back to Giorgio Armani’s remark about a nameless £7,000 “status” designer handbag. Out of interest, he had a bag made the same way for about £2,100. He concluded not that bags were too expensive – Armani, after all, is a couturier – but that they are not always “justifiably expensive”. It is a subtle, significant distinction and one I will try to remember next time I am reviewing.
Five of the best
The Carlyle, New YorkThe Carlyle is expensive even for New York with its cheapest rooms starting at $650. But it’s unique – with the sort of glamour that only history can create – augmented by Thierry Despont’s decadent deco leathers and velvets. The bathrooms have the heft of age (thick, white marble) and Woody Allen plays live jazz in Café Carlyle on Monday evenings.
Residenza Napoleone III, RomeAt €1,200 a night, Residenza Napoleone III equals a junior suite at Hotel de Russie. But it’s inimitable, a private apartment with dining room, bedroom, drawing room and bathroom in a 16th-century palazzo just off Via Condotti. The owner-hostess, Letizia Ruspoli, is more than a concierge could hope to be, and the cinema screen hidden behind an Old Master is a stroke of brilliance among many.
The Fasano, São Paulo The Fasano has one of the best Italian restaurants to be found. The rooms (from $400 for a standard room, $800 for a suite) are so chic, chocolate and cosseting, you will find yourself revising your low opinion of so-called design hotels. Bathrooms are simply vast, the location spot-on and service conspicuously good for capricious South America.
Villa San Michele, Florence Orient-Express Hotels are among Italy’s most expensive. But while doubles at the Cipriani feel steep, Villa San Michele is worth it – from €827 a night to sleep in a 15th-century monastery whose façade was designed by Michelangelo. This is matched with excellent service, a great pool and soul-stirring terrace views.
Grand Hyatt Shanghai, Shanghai With rooms starting at $231 a night, Grand Hyatt Shanghai is a “luxury bargain”. This is in spite of the fact that it is on the “wrong” side of town (Pudong). But then the views are extraordinary. The Grand Hyatt is the world’s highest hotel. You feel like you are sleeping in the sky.
