It often happens in my practice that I am confronted with preconceived ideas about the hyper-luxury hotel business, especially as regards price, performance, etc. The constants that define this category, which is so visible to the media, are presented below.
The attributes of Hyper-Luxury hotels
The Hyper-Luxury category is distinguished by the exceptional quality of its building and site and by its outstanding services. Among its distinctive aspects are a must-have AAA location, a prestigious building, a generous product, and regular CapEx investments. As for the discriminating aspect, it is the Customer Experience encompassing the wide range of services offered, the prestige the legend of the hotel, and ultimately the memories taken away from the stay beyond the price paid!
Which are the Hyper-Luxury hotels in France?
According to statistics published by Atout France in early 2019, Paris offers 399 five-star hotels with a total of 25,700 rooms. 5-star establishments with the Palace distinction consists of 26 hotels with a total of around 2,900 rooms, i.e. around 11% of the 5-star supply.
According to studies on luxury tourism published by Eurostaf, a multiplier of 4 should be applied to distinguish luxury products from hyper-luxury products. Based on an average 5-star hotel price of around €200 excl. VAT4 per night, applying a multiplier of 4 gives us a threshold of €800 excl. VAT for the Hyper-Luxury category.
Cross-referencing the two criteria, the Hyper-Luxury hotel category includes, at the time of writing, 17 establishments with a total of approximately 2,000 rooms.
What is the difference between Luxury and Hyper Luxury in Paris?
There is no definition that allows us to draw a universal boundary to distinguish Hyper-Luxury hotels from hotels at the top of the hotel ranking scale (5 stars), except for the economic reality that results in a segmentation of the high-end offer in Paris according to the average price charged. Sentinel Hospitality has developed a table that shows a comparison between categories and the average price per room.
|
Five-star category |
Average price |
Examples |
|
Hyper Luxury |
> €800 |
Crillon, Ritz, Plaza, Bristol, George V, etc. |
|
Luxury Boutique |
€500 to €700 |
Costes, Park Hyatt Vendôme, etc. |
|
Superior |
€300 to €500 |
Hyatt Madeleine, Marignan, Raphaël, San Régis, etc. |
|
Standard |
€200 to €300 |
Millennium Hotel Paris Opera, Radisson Blue Ambassador, St James & Albany, etc. |
Where are these hotels located?
The vast majority of France’s hyper-luxury accommodation capacity is currently located in Paris (90% of rooms), in the emblematic business and leisure districts. The concentration of the Hyper-Luxury hotel supply can be explained by the attractiveness of Paris as a “Must See” destination within the world’s leading tourist destination and Europe’s leading “Gateway City”.
A comparison with the other main Gateway Cities in the world (London, New York, Tokyo, Dubai) reveals a specific feature of Paris: it offers the largest number of high-performance rooms above €800 exc. VAT, but also the highest average price for the Hyper-Luxury offer.
Should you have a vested interest in Hyper-Luxury hotels please contact us and we will be happy to discuss specific topics such as:
- The business model of a Hyper-Luxury hotel
- The development challenges facing the Hyper-Luxury hotel business
- Development cost of Hyper-Luxury hotels