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.

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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.

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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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