JOh, Gatsby would have just adored post-pandemic London. Luxury hotels have sprung up around the capital, priced at Monopoly board prices, and packed with an embarrassing level of luxury that even F. Scott Fitzgerald might have struggled to parody.
But there are signs that the luxury goods boom is reaching its limits. Prices at new properties such as The Peninsula and Raffles at the OWO have fallen from a whopping £1,300 a night to an astonishing just under £900, travel agents say.
Late summer offers a growing number of promotions, including three nights for the price of two, free breakfast and meal vouchers from local celebrity chefs. While the stalwarts of London’s hotel world, such as the Savoy and the Ritz, are embarking on expensive new builds and renovations to keep up, some hotel general managers believe something must be done. There is a sense of that. After becoming obsessed with his obsession with the world’s best hotels, Tom Cahalan founded Dorsia Travel with his wife Lucy to serve wealthy clients and said, “What will the end result be?” I don’t know,” he said.
“Interest rates have gone up a lot because of inflation, labor costs have gone up a lot and people are in a bind right now. They can’t go back to the previous normal. Hotels have to adapt as well. I understand.”
London’s first hotel boom occurred in the mid-19th century, starting with railway hotels in Paddington, King’s Cross and Marylebone. As competition increased, entrepreneurs went upscale with grand Parisian establishments such as the Westminster Palace Hotel, the Langham, and the Savoy.
They created a playground for those who benefited from the success of the British Empire, the stars of the 1920s Jazz Age, and postwar Hollywood. Melba toast is claimed to have been invented by Savoy chef Auguste Escoffier for opera singer Dame Nellie Melba. Here, you’ll find yourself reminiscing with past guests, from Princess Margaret to Marilyn Monroe to Sophia Loren.
However, London’s post-war decline meant there was little competition, and some were demolished or converted into offices, such as the Palace of Westminster, which was demolished in 1974 and is now a bank branch.
The new hotel boom is due to the capital’s popularity with Americans and wealthy tourists from China and the Middle East. Fleur Roberts, head of luxury at Euromonitor, says they’re back after the pandemic, but there are other options.
The post-pandemic world has been divided into those affected by the cost of living crisis and those who can afford to survive it. The soaring prices of luxury goods during the lockdown and subsequent “revenge spending” on travel, where consumers splurged on their savings, have created a lifeline for hospitality and travel companies.
This coincided with the hotel boom in London. The Savoy said in its annual report last month that at least 15 hotels will open between 2023 and 2025, adding 2,677 rooms to the capital’s already 18,000 rooms. Two of the new hotels, The Peninsula at Hyde Park Corner and Raffles London in the former War Office building in Whitehall, opened last year and whose corridors once stalked Winston Churchill.
In the coming months, visitors will be able to visit the Waldorf Astoria Admiralty Arch at the foot of the mall, the Six Senses in the former Whiteley’s shopping arcade in west London, and the Chancery Rose on the grounds of the former US Embassy. You will be able to stay at Wood, Mandarin Oriental. London’s third hotel opens in Mayfair. BT Tower was also acquired earlier this year and will be turned into a hotel.
All this means London’s luxury hotel market is “increasingly competitive”, Savoy warned, adding that attracting business will “become even tougher in 2023 and even worse in 2024”. “We’re seeing an impact,” he said, citing Raffles and Peninsula as reasons why.
The search for new experiences has led hotels to go to extraordinary lengths to find Instagrammable opportunities. Hidden booze bars, Michelin-starred restaurants, and fleets of luxury cars are no longer enough. The Peninsula’s chief executive boasted to the FT last year that he used onyx in the bathrooms because marble wasn’t enough, and that the hotel has a rooftop cigar lounge. Raffles borrows paintings from the National Portrait Gallery. Guests at the Waldorf Astoria Admiralty Arch can watch the state procession pass through The Mall below.
In response, London’s older hotels are trying to upgrade. The Dorchester is undergoing a multi-million dollar renovation that includes a Vesper bar to remind guests that Ian Fleming was a regular guest and James Bond producer EON had offices in the hotel. invested.
The Ritz is spending £300m on ‘Project Picnic’, which will see it excavate its five-storey basement and build more rooms, a two-storey spa, gym and swimming pool. To maintain this status, The Savoy aims to completely renovate the restaurant and 118 rooms, where Sophia Loren and Marilyn Monroe dined during their stay, by February 2026.
Is that enough? Luxury branding analyst Mango Schmidt says there’s a risk that guests, especially the new generation of Nepokids and Trustafarians, won’t check into new properties simply for a new experience. They want a traditional form of experience and they’re looking for something more,” he said. “Something that truly adds value and is more transformative in nature.”