The much anticipated re-opening of the SAVOY Hotel in London to face new major competitors
In less than two months, the legendary SAVOY Hotel in London will be open for business after a near three-year closure for a £220 million ($385m) revamp. The hotel has already accepted reservations for the £10,000-a-night Royal Suite, the first time that the hotel, which has been host to Sir Winston Churchill, Marilyn Monroe and The Beatles, has had a suite of such sumptuous extravagance. The suite which features 8 rooms and covers almost an entire floor, boasts mirrors that turn into televisions and a 2.1m handmade bed, and is the most expensive of the hotel’s 268 rooms, which start from £350 a night.
The reopening is one of the most hotly anticipated events in the industry, and will fire the starting gun on a remarkable phase in the development of the capital’s luxury hotel scene. A host of new upmarket hotels are set to appear in London over the next two years in what will herald a fierce battle among the five-star players to attract the jet-set.
Soon after the return of the Savoy, which is managed by the Fairmont chain, London will welcome back the Four Seasons on Park Lane. That has been closed for the past two years while it undergoes an estimated £100 million rebuilding but is due to reopen in December.
Next year sees the opening of 45 Park Lane, a new hotel from the group that owns the nearby Dorchester, and the Corinthia, an international chain that is making its British debut. The chic W chain is also entering London next year, with a property on Leicester Square. Shangri-La, one of the biggest hotel brands in Asia, is opening its first London property in the new Shard skyscraper. Claridge’s and the Berkeley both have expansion plans, while Waldorf Astoria is also making a splash in the capital, with the launch this November of a property in the grounds of Syon Park in west London. All have been emboldened by the strong performance of London’s most exclusive hotels during the economic downturn.
None of the newcomers, however, is as hotly anticipated as the reopening of the Savoy, an event that will be marked with a string of lavish cocktail parties, each celebrating a different feature of the revamped hotel. The site shut for its makeover in December 2007 and had originally been expected to reopen in May 2009.
Down the road from the Savoy, a stone’s throw from Westminster, lurks one of the new kids on the block. The deluxe Corinthia chain, already established in cities such as St Petersburg, Budapest and Prague, is spending £270 million to open its first London site, converting a former Ministry of Defence building into what will be its flagship property, with almost 300 rooms. Its 370sq m royal suite includes a private gym and a barbecue pit on an outdoor terrace.
Estimates suggest that London’s most exclusive big West End hotels have seen “revpar” (revenues per available room,a key industry measure) drop by only 8 during the worst of the economic downturn, testament to both their enduring appeal and the ability of their customers to shrug off a recession.
Last week, it was revealed that at the Intercontinental Hotel on Park Lane revpar had risen 15 in the first half of this year. The success of these hotels can be attributed, at least in part, to the closure of the Savoy and the Four Seasons – trade that would have gone to those two stalwarts has been snapped up by their rivals. The business won’t be handed back quite so readily. Andy Cosslett, chief executive of Intercontinental Hotels Group, said: “We have worked hard to accommodate those customers. I expect we will keep some of them.”
While the two big-name rivals have been shut, others have raised their game, with the Grosvenor House and Connaught, for example, enjoying the benefits of significant investment. Such investment will be vital if London’s top hoteliers are to cope with the increased competition. “There will be a novelty factor about the new hotels,” said Jonathan Langston, managing director of TRI Hospitality Consulting. “It will be important for others at the top end of the market to keep pace with the new, and newly refurbished, product.”
Others think that the most vulnerable to the new entrants are hotels operating a notch or two below the luxury mark, or those that do not have the prime sites.
All of those charged with running the new or reopened hotels seem unfazed by the prospect of greater competition. John Stauss, regional vice-president of Four Seasons and general manager of its Park Lane property for the past 17 years, said: “There is enough business to go around.”
from The Australian