Its a common occurrence: A guest leaves a piece of
luggage behind in his room. Housekeeping finds it and places it
in lost and found. What happened next, however, at the China
World Hotel in Beijing was hardly standard procedure.
When the guest arrived in Hong Kong, he called to say
hed left his bag and needed the papers inside the
suitcase for an important meeting, recalls John Rice,
general manager of the Shangri-La property. This was
a regular guest of ours. So our concierge booked an air ticket,
flew to Hong Kong and hand-delivered the bag to the home
of the guest.
After the financial crisis first erupted, in 2007, it was
easy to argue that the luxury hotel market lost its way.
Occupancy rates fell sharply. Monthly cancellation rates at top
U.S. properties hit an unprecedented 20 percent. The luxury
segment became a prime target in the political backlash against
Lately, however, the market has found its footing again. In
the U.S. occupancy rates for 2011 will end up at close to 70
percent, well above 2010s rate of 66.2 percent and just
shy of the peak of 71.8 percent reached back in 2006, according
to STR Global, a Hendersonville, Tennessee, hospitality data
research company. Premier hotels are leaving nothing to chance,
though. They are going the extra mile or 1,224 miles, in
China World Hotels case to provide the
extraordinary service that has earned them customer loyalty as
well as coveted spots on Institutional Investors annual
ranking of the Worlds
The top spot on this years list belongs to Rosewood
Mansion on Turtle Creek. The 31-year-old boutique hotel is a
Dallas institution. Texans pack the house on weekends, and its
fiercely loyal base of repeat clients accounts for 35 percent
of overall business. A three-year, $30 million overhaul,
completed in 2010, updated the lobby from its 1980s origins and
modernized the 143 rooms. The renovation has been a huge
success, says managing director Duncan Graham.
People whod been here 250 times worried it
wouldnt be the mansion anymore. But it was done in
degrees we never closed and I think the design
When the economic crisis first hit, some groups became
sensitive about staying at a place with
mansion in the name, Graham says. But since
2008 occupancy rates at Rosewood Mansion have been on the rise.
Midweek business travelers have returned. The hotel has
landed some significant new accounts, including a large
out-of-state bank whose employees generate 50 to 60 room nights
a month. Yet the battle over patronage remains fierce.
Graham estimates that the supply of hotel rooms in his
competitive set has increased 125 percent since 2006
with no accompanying increase in demand. We are at
pre-2007 occupancy levels, but softer in rates, he
Average daily rates: Theyre the Achilles heel of
the recovery for the upscale sector. In the U.S. market
rates will probably end this year at $258, says Bjorn
Hanson, dean of the Preston Robert Tisch Center for
Hospitality, Tourism and Sports Management at New York
University. That represents a decline of nearly $30 from the
peak rate of $286 set in 2008. Never before has there
been that large, nor that sustained, of a decline,
Many luxury chains insist that rate integrity is an
absolute. You would never see a For Sale sign
on a Rolls-Royce dealership, says Heinrich Morio, general
manager of the Burj Al Arab in Dubai, No. 5 on IIs
roster. Likewise, the Burj Al Arab is not a product that
can have a For Sale sign.
Yet in these times when hotels are fighting harder than ever
for business and online travel agencies have made pricing even
more transparent, guests are expecting more for their
money and getting it. A free extra night? That
once-elusive incentive has become more commonplace among
premium hotels even at the Burj Al Arab, where room
rates average $2,000 a night. Breakfast? Its now included
in the Burj Al Arabs base rate. Free transportation? The
Mount Nelson Hotel in Cape Town, South Africa, which ranks 47th
on the list, provides a complimentary green limo,
an electric car that transfers guests to three nearby tourist
spots. Free Wi-Fi? Claridges was one of the first
hotels in London to offer it.
Value add-on is really in demand, particularly among
leisure clients, says Thomas Kochs, general manager of
Claridges, this years third-place hotel. Leisure
travelers account for 55 percent of Claridges mix;
they have returned with fatter pocketbooks than corporate
guests. Leisure clients are spending more, staying longer
and treating themselves to suites a little more often, he
Kochs has made goodwill visits to the U.S. this year to
confer with his top bookers members of networks like
Virtuoso, Signature and American Express
Centurion and to promote the 113-year-old property
as a destination for modern and traditional travelers alike.
That means providing butlers who are as adept at
troubleshooting iPads (which are provided in the hotels
limousines) as they are at manning the 5:00 p.m. rounds of the
sweets trolley. It means cutting-edge fare from Gordon Ramsay
as well as the best afternoon tea in London, according to the
prestigious Tea Guild. Our heritage, history and the
royalty that stays with us definitely help make Claridges
attractive, Kochs says. But we are actively working
at keeping our name and our brand relevant to the needs
travelers have today and tomorrow.
Although exquisite service remains part and parcel of the
luxury image, the segment is starting to fine-tune its
marketing message. Pampering is now complemented by
something that conveys productivity, NYUs Hanson
says. The message is: If you stay at our hotel, we
will have the service you need and will make your time more
Thats certainly the mantra at the China World,
No. 42, where corporate guests have reduced both the
frequency and duration of their stays. They want the best
value and best quality in the shortest length of time,
says general manager Rice. Since those guests are eating
in-house more during their short stays, the hotel now changes
its recommendation menu every two weeks to offer more variety.
An 8,000-square-foot executive lounge, due to open mid-2012,
will connect directly to the business center and the newly
refreshed conference facilities. The hotel also added a
dedicated concierge to serve as a single point of contact for
organizers of meetings and conventions. Physical product
will always be there, new hotel or old hotel, Rice says.
But guest experience and service will always
differentiate one property from another.
The Mount Nelson Hotel has assigned a staff member to assist
production crews for films, advertisements and photo shoots,
which account for 25 percent of the hotels clientele.
(Cape Town is considered the Hollywood of Africa, thanks to its
tax incentives and skilled English-speaking talent.)
Theyre long-stay guests, so I like to take care of
them, says general manager Xavier Lablaude. I give
them small discounts at the bar, special rates for laundry and
10 percent off on food and beverage.
What happens, though, when theres too much of a good
thing? STR Global has cautioned that oversupply could spoil the
recovery in the high-end market as new properties continue to
open their doors around the globe and around the corner
from some of the hotels on this years list.
Competition is our top preoccupation, says
Vincenzo Finizzola, general manager of the Four Seasons Hotel
Milan (No. 61). The luxury 95-room Armani Hotel opened in
November just a five-minute walk away. The Four Seasons
courteously tweeted its very best wishes to our new
neighbors, even as the 18-year-old property is freshening
up for the fight. A 7,000-square-foot spa will open in 2012,
just as renovations begin on all 118 rooms.
Once the sole luxury property in lower Manhattan, the
Ritz-Carlton New York, Battery Park which
ranks 64th now has several competitors for the business
thats expected to come with the opening of 1 World Trade
Center, the 1,776-foot skyscraper currently rising on the
site of the old Twin Towers. However, continuous delays have
pushed the towers opening back to April 2014
adding insult to the injuries suffered by downtown business
hotels as a result of the financial turmoil on
As a $10 million renovation revamped the hotels
298 rooms in 2009, the Ritz-Carlton New York, Battery
Parks management team overhauled its food and beverage
and sales approach as well. The high-priced steakhouse?
Gone. 2 West is now a more moderately priced American bistro.
Its giving customers a lot more options, says
general manager Greg Mendoza. Financial and corporate groups
disappearing from the reservation books? Call in the lawyers.
The sales team has booked several legal groups and associations
for functions at the Battery Park property. In July the hotel
even marketed a package for trial lawyers, which included
everything from a free shoeshine to a noncompete clause
excluding opposing counsel from booking at the hotel. Those
wholesalers that were unnecessary in the past? Ring them up.
They are bringing us business from Germany, Brazil and
Mexico, Mendoza says. Its a new segment, and