Economy

The Sultans Of Spa: Inside The Parisian Luxury Hotel War

Properties of Saudi princes, the sultan of Brunei, billionaires from Qatar and Asia, and a few of the wealthiest people in France, Parisian palaces-turned-hotels are a high-rolling industry.

Lobby of the Four Seasons George V Hotel in Paris
Lobby of the Four Seasons George V Hotel in Paris
Claire Fleury

PARIS — She looks like the heroine in a Hitchcock movie. Tall and well-dressed in her black suit, the young lady walks into a suite at the Four Seasons George V Hotel with a supple and muffled step. She is not a customer, but the floor’s head housekeeper. She has come to make sure the chambermaid did a good job: looking under the furniture, inspecting drawers, examining the bathroom, and lastly checking that everything left for the guests is in place — champagne, exotic fruits and dark-chocolate-covered strawberries.

“We’re expecting a couple,” she explains.

The palace-turned-hotel’s real owner — Prince Al-Waleed, the nephew of the Saudi Arabian king and founder of the Kingdom Holding Company — is somewhere else. And he’s lucky too because the George V is the “biggest of palaces,” says Georges Panayotis, head of the consulting agency MKG Hospitality, located on the avenue of the same name.

The prince is as comfortable in Bedouin clothing as he is in a double-breasted suit, just as at home on a camel’s back as aboard his private Airbus A380 — the “flying palace” model. As a child, Al-Waleed, now 57, used to stay at the George V with his grandfather, and the little prince loved these “exotic” holidays in Paris. As an adult, he bought it in 1999 and chose the Canadian group Four Seasons to run it.

The hotel is one of the 13 establishments in France — six of which are in Paris (George V, Bristol, Plaza Athénée, Meurice, Park Hyatt Vendôme and Royal Monceau Raffles) — to be officially defined as “palaces.” It’s a distinction awarded to high-capacity five-star hotels (a minimum of 100 rooms), where perfection and exception are the norm. The price for a room can range from anywhere between 700 euros and ... 26,000 euros for the “royal” suite of the Plaza Athénée. For that price, clients get 450 square meters with “armored doors” that can resist assault rifles.

Whether they are heads of state or “the wealthiest inhabitants of the Gulf or of the emerging markets,” the royal suite guests are, like in other palaces, special ones. Rich — extremely rich — they will spend huge amounts of money during their stay in Paris.

A crucial sector

The tourism industry is a crucial one in France, but it doesn’t seem to be a priority for President François Hollande’s government. Pity, especially when a certain Barack Obama is looking into it, closely. In January 2012, the American president even announced new measures to support it. “The efforts to make America the world’s first tourist destination gives us a huge chance to create jobs and reinforce the American economy,” he said. In other words, Barack Obama wants to strip France of its status as the world’s most visited country, which claimed 83 million international tourists in 2012.

In defense of the current French government, lack of passion about tourism isn’t new. “It was the same under former President Nicolas Sarkozy,” one tourism official says. But tourism represents 7% of France’s GDP and 5% of its employment. And Paris remains the country’s star city, with 29 million visitors in 2012 (17 million of them foreign), generating 8 billion euros in revenue, 36 million in tourist taxes and 300,000 direct or indirect jobs.

Of course, with 242 four-star hotels and 46 five-star hotels, the luxury hotel trade is a niche market. But a golden niche. “On average, one room requires 2.5 employees,” says Gwénola Donet, head of the Paris-based consulting agency Jones Lang LaSalle Hotels. “And these hotels need to be maintained and expanded, which creates jobs in many employment fields. We can only be glad to see foreign capital investments in France. And anyway, you can’t relocate hotels!”

Monopoly

Who could have spent 250 million euros to buy the Crillon in 2010 if not Prince Mitaeb, son of the Saudi Arabian king and his ninth wife? And that doesn’t count the two-year renovation that started last April. The price for the renovation of this hotel — located on the Concorde Square — is estimated at around 2 million euros per room. Plus the creation of a spa and a swimming pool, essential if the hotel wants to obtain the renowned “palace” seal, even in one of Louis XV’s homes.

Just like in Monopoly, buying an expensive hotel also means high room prices. “The main luxury hotel guests are international visitors,” says Christian Mantei, chief executive of Atout France, the government’s tourism development agency. On average, this clientele is about 15% American, 9% British, 5% Japanese, and the rest from the BRICS (Brazil, Russia, India, China and South Africa) countries and, of course, from the Middle East — the biggest spenders. So big even, that the period of Ramadan has a direct impact on the occupancy rate and the average luxury hotel room rate, according to the agency MKG Hospitality. On July 7, three days before the beginning of the ritual fasting period, the occupancy rate had fallen by 14 points and the room rate by 9. So palaces are probably as impatient for Ramadan to finish as those who fast.

The Ritz, the end of an era

Since Lady Di and her partner Dodi Al-Fayed’s tragic 1997 deaths in Paris, almost everyone knows that Mohamed Al-Fayed, Dodi’s father, owns the Ritz on Vendôme Square. The Egyptian billionaire bought it in 1979. Its history, its bars — the famous “Hemingway” among them — its sumptuous rooms (including Coco Chanel’s suite where an unknown Charles Le Brun painting was found last year) — all of these elements could have made the Ritz the most magical hotel there is.

The Ritz Hotel on Paris' Place Vendôme - Photo: ilaria

But on Aug. 1, 2012, this era came to an end. The hotel shut down for two years’ worth of renovation and fired its entire staff, unlike the Crillon, which had committed to keep everyone. The hotel, where no significant work had been done since 1979, was, little by little, losing its prestige. So much so that when the “palace” seal was created in 2010, the Ritz didn’t make the cut. The ultimate insult was when Woody Allen, who was known to love the Ritz, preferred shooting Midnight in Paris at the Bristol.

The affront became even more difficult to swallow when the Bristol, a Ritz competitor also located on rue du Faubourg Saint-Honoré, became the first Parisian “palace.” Ever since the German billionaire Rudolf Oetker bought the Bristol in 1978, the hotel’s operators have never ceased to expand and embellish it. So it logically became one of the favorite palaces to the world’s wealthiest people. Last fall, three members of the Rolling Stones stayed there for more than a month while shooting a video in suburban Paris (Mick Jagger was staying in his Parisian pied-à-terre). It was also there that the four “rock "n" roll granddads” finished their night after a surprise concert in a Parisian club last Oct. 25. It was an after-party that the Bristol will no doubt remember for a long time.

“The waiters were a bit overwhelmed,” says a regular guest who happened to be there, “but what a party!” Under the majestic chandeliers, shots went down faster than rock riffs. It was a great opportunity for the Bristol’s new bar, which opened last September. With DJs and videos on weekends, the palace’s bar hopes to become an essential part of Parisian nightlife, but for 26 euros per cocktail, the place isn’t cheap.

The place to be

In 2001, the Plaza Athénée was the first to work on its bar. With its trendy decor, its two huge safes where the hotel keeps the regulars’ bottles, its electro-rock nights every weekend, the Plaza’s bar is the place to be for the happy few. All day (and all night) long, everything is done to enthrall the guests. Last December, the Plaza’s courtyard and garden were even turned into an ice rink. “To please my guests’ children,” explains François Delahaye, the Dorchester group’s chief executive.

The Plaza Athénée - Photo: CarSpotter

As for the Royal Monceau Raffles, it officially became a “palace” last June. With its 26-meter-long swimming pool, its private movie theater, its art library and its eclectic but sophisticated decorations (pure Philippe Starck), it placed the luxury bar very high. The rumor has it that the owners even tried to buy a supermarket on the Hoche Avenue, which sort of tarnished the hotel’s image.

The Park Hyatt Vendôme has also been deemed a “palace.” With its sumptuous location and its contemporary decorations, it pleases those who are not too fond of wing chairs and prefer international chains. There are indeed around 500 hotels in the world that carry the name Hyatt. The one located on the rue de la Paix is luxurious, but also quite far from the palace spirit, which, in essence, should be legendary and unique.

Chinese billionaires

In 2011, the Mandarin Oriental opened on rue du Faubourg Saint-Honoré. It is allegedly already for sale. The banking group Société Foncière Lyonnaise may hand it over to Chinese operators or to Katara Hospitality, the big Qatari group that already owns the Raffles Royal Monceau. At the end of the year, the group is set to open the Peninsula Hotel on Avenue Kléber — in Asia, Peninsula is the largest luxury hotel chain. So the small world of Parisian palaces is holding its breath. “The opening of these Asian hotels is a very good thing,” says François Delahaye. “They bring new guests over from Asia.” In short, they bring Chinese billionaires over on a golden platter.

At the end of 2014, the Ritz and the Crillon will reopen. “They will settle back in fast,” Georges Panayotis predicts. In 2015, the Cheval Blanc will also make its appearance. It is originally a palace in Courchevel, in the French Alps, and a property of Bernard Arnault, France’s wealthiest man. In the Samaritaine building on rue de Rivoli Street, the billionaire intends to open its Parisian twin. “The real battle of palaces will then begin,” says Georges Panayotis.

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Preparing a COVID-19 vaccine booster in Huzhou, China.

Hannah Steinkopf-Frank, Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 Ciao!*

Welcome to Wednesday, where Brazil's senate backs "crimes against humanity" charges against Jair Bolsonaro, the UN has a grim new climate report and Dune gets a sequel. Meanwhile, German daily Die Welt explores "Xi Jinping Thought," which is now being made part of Chinese schools' curriculum.

[*Italian]

🌎  7 THINGS TO KNOW RIGHT NOW

• Senators back Bolsonaro criminal charges: A Brazilian Senate panel has backed a report that supports charging President Jair Bolsonaro with crimes against humanity, for his alleged responsibility in the country's 600,000-plus COVID-19 deaths.

• Gas crisis in Moldova following Russian retaliation: Moldova, one of Europe's poorest countries, has for the first time challenged Russia's Gazprom following a price increase and failed contract negotiations, purchasing instead from Poland. In response, Russia has threatened to halt sales to the Eastern European country, which has previously acquired all of its gas from Gazprom.

• New UN climate report finds planned emission cuts fall short: The Emissions Gap Report 2021 concludes that country pledges to reduce greenhouse gas emissions aren't large enough to keep the global temperature rise below 1.5 °C degrees this century. The UN Environment Program predicts a 2.7 °C increase, with significant environmental impacts, but there is still hope that longer term net-zero goals will curtail some temperature rise.

• COVID update: As part of its long-awaited reopening, Australia will officially allow its citizens to travel abroad without a government waiver for the first time in more than 18 months. Bulgaria, meanwhile, hits record daily high COVID-19 cases as the Eastern European's hotel and restaurant association is planning protests over the implementation of the vaccination "green pass." In the U.S., a panel of government medical advisors backed the use of Pfizer COVID-19 vaccine for five to 11-year-olds.

• U.S. appeals decision to block Julian Assange extradition: The United States said it was "extremely disappointed" in a UK judge's ruling that Assange, the founder of Wikileaks, would be a suicide risk of he traveled across the Atlantic. In the U.S., he faces 18 charges related to the 2010 release of 500,000 secret files related to U.S. military activity.

• Deposed Sudan prime minister released: Prime Minister Abdalla Hamdok has been released from custody, though remains under heavy guard after Sudan's military coup. Protests against the coup have continued in the capital Khartoum, as Hamdok has called for the release of other detained governmental officials.

Dune Part 2 confirmed: The world will get to see Timothée Chalamet ride a sandworm: The second installment of the sci-fi epic and global box office hit has officially been greenlit, set to hit the screens in 2023.

🗞️  FRONT PAGE

Front page of the National Post's October 27 front page

Canadian daily National Post reports on the nomination of Steven Guilbeault, a former Greenpeace activist, as the country's new Environment minister. He had been arrested in 2001 for scaling Toronto's CN Tower to unfurl a banner for Greenpeace, which he left in 2008.

📰  STORY OF THE DAY

Chinese students now required to learn to think like Xi Jinping

"Xi Jinping Thought" ideas on socialism have been spreading across the country since 2017. But now, Beijing is going one step further by making them part of the curriculum, from the elementary level all the way up to university, reports Maximilian Kalkhof in German daily Die Welt.

🇨🇳 It's important to strengthen the "determination to listen to and follow the party." Also, teaching materials should "cultivate patriotic feelings." So say the new guidelines issued by the Chinese Ministry of Education. The goal is to help Chinese students develop more "Marxist beliefs," and for that, the government wants its national curriculum to include "Xi Jinping Thought," the ideas, namely, of China's current leader. Behind this word jam is a plan to consolidate the power of the nation, the party and Xi himself.

📚 Starting in September, the country's 300 million students have had to study the doctrine, from elementary school into university. And in some cities, even that doesn't seem to be enough. Shanghai announced that its students from third to fifth grade would only take final exams in mathematics and Chinese, de facto deleting English as an examination subject. Beijing, in the meantime, announced that it would ban the use of unauthorized foreign textbooks in elementary and middle schools.

⚠️ But how does a country that enchants its youth with socialist ideology and personality cults rise to become a world power? Isn't giving up English as a global language the quickest way into isolation? The educational reform comes at a time when Beijing is brutally disciplining many areas of public life, from tech giants to the entertainment industry. It has made it difficult for Chinese technology companies to go public abroad, and some media have reported that a blanket ban on IPOs in the United States is on the cards in the next few years.

➡️ Read more on Worldcrunch.com

📣 VERBATIM

"I'm a footballer and I'm gay."

— Australian soccer player Josh Cavallo said in a video accompanying a tweet in which he revealed his homosexuality, becoming the first top-flight male professional player in the world to do so. The 21-year-old said he was tired of living "this double life" and hoped his decision to come out would help other "players living in silence."

🇸🇩💥  IN OTHER NEWS

Why this Sudan coup d'état is different

Three days since the military coup was set in motion in Sudan, the situation on the ground continues to be fluid. Reuters reports this morning that workers at the state petroleum company Sudapet are joining a nationwide civil disobedience movement called by trade unions in response to the generals' overthrow of the government. Doctors have also announced a strike.

Generals in suits At the same time, the military appears firmly in control, with deposed Prime Minister Abdalla Hamdok allowed to return home today after being held by the coup leaders. How did we get here? That's the question that David E. Kiwuwa, a professor of international relations at the University of Nottingham, takes on in The Conversation:

"Since the revolution that deposed Omar el-Bashir in 2019, the military have fancied themselves as generals in suits. They have continued to wield enough power to almost run a parallel government in tension with the prime minister. This was evident when the military continued to have the say on security and foreign affairs.

Economy as alibi For their part, civilian officials concentrated on rejuvenating the economy and mobilizing international support for the transitional council. This didn't stop the military from accusing the civilian leadership of failing to resuscitate the country's ailing economy.

True, the economy has continued to struggle from high inflation, low industrial output and dwindling foreign direct investment. As in all economies, conditions have been exacerbated by the effects of COVID-19. Sudan's weakened economy is, however, not sufficient reason for the military intervention. Clearly this is merely an excuse."

➡️ Read more on Worldcrunch.com

#️⃣  BY THE NUMBERS

471 million euros

Rome's Casino di Villa Boncompagni Ludovisi, better known as Villa Aurora, will be put up for auction in January for 471 million euros ($547 million). The over-the-top price tag is thanks to the villa having the only known ceiling painting by Renaissance master Caravaggio.

✍️ Newsletter by Hannah Steinkopf-Frank, Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

Who wants to start the bidding on the Caravaggio villa? Otherwise, let us know what the news looks like from your corner of the world! info@worldcrunch.com!

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