Stephen Frood
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Ambassadors Bloomsbury London : 28 April 2010 Stephen Frood Davis Langdon COMPARING HIGH END HOTELS IN LONDON TO THE REST OF THE WORLD
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Comparing high end hotels in London to worldwide
Transcript of Stephen Frood
Ambassadors BloomsburyLondon : 28 April 2010
Stephen FroodDavis Langdon
COMPARING HIGH END HOTELS IN LONDON
TO THE REST OF THE WORLD
Content
Introduction
Defining high end hotels
What are the top hotels in the world?
Facts and figures on the top hotels worldwide
Market feedback from key Davis Langdon locations
London – What will the future bring?
DEFINING HIGH END HOTELS
How do we define a top end hotel?
What makes a top hotel?
Range of large guest rooms
Substantial front of house facilities (restaurants, bars, banquet, conference, retail etc)
Range of back of house facilities to support hotel operation
Exemplary service and quality standards
Location, reputation and destination status
Cost
WHAT ARE THE TOP HOTELS IN THE WORLD
What are the top hotels in the world?
BeijingMandarin OrientalSt RegisPark HyattShangri-LaRitz Carlton
SingaporeSt RegisRafflesRitz CarltonCapellaFullerton
Hong KongFour SeasonsMandarin OrientalW Hong KongGrand HyattIsland Shangri-La
BarcelonaW BarcelonaMandarin OrientalGran Hotel La FloridaHotel ArtsHotel Casa Fuster
What are the top hotels in the world?
SydneyPark HyattFour SeasonsThe InterContinentalThe ObservatoryWestin International
New YorkFour SeasonsPeninsulaRitz CarltonSt RegisHotel Plaza Athenne
ParisFour Seasons George VThe RitzHotel Le CrillionHotel Le BristolPark Hyatt
DublinThe WestburyThe ShelbourneThe FitzwilliamRitz CarltonThe Dylan Hotel
What are the top hotels in the world?
Cape TownMount NelsonThe Table Bay HotelThe Cape Grace HotelCrystal TowersWestin Grand
LondonThe RitzThe SavoyClaridge’sThe ConnaughtDorchester
What can we take from this?
London, Paris, Dublin and Barcelona have more privately owned top end hotels
Key emerging world wide locations dominated by the leading ‘luxury brands’ (Four Seasons, St Regis, Ritz Carlton, Shangri-La, Mandarin Oriental)
Major European Cities have mature markets and older more established building stock
Major European cities maybe have older more traditional hotel stock – the Ritz in London, Claridges etc
Selecting the top 5 is very subjective !
Lets hold onto these thoughts and return to them later…..
FACTS AND FIGURES ON THE TOP HOTELS WORLDWIDE
Operational performance of top end hotels
Occupancy global ranking index 2008
Source: Deloitte / STR Global
Operational performance of top end hotels
Average room rate global ranking index 2008
Source: Deloitte / STR Global
Operational performance of top end hotels
RevPAR global ranking index 2008
Source: Deloitte / STR Global
Operational performance of top end hotels
What Trends can we take from this performance data?
5 cities or locations feature in all three rankings – Paris, New York, Dubai, Abu Dhabi and London
These destinations command top room rate, high occupancy and therefore leading RevPAR figures
Despite the negative impact of the world wide recession these are still leading world wide destinations – especially for the top end market
Design Economics of top end hotels
Design Economics of top end hotels
What Trends can we take from this data?
Far East and Asia Top End Hotels are bigger – bigger bedrooms and bigger public areas
Proportion of public areas to bedrooms is higher
Bigger emphasis on food and beverage facilities in some of the emerging locations ?
Design size and standards reflects land and property constraints in historic and mature locations like London
Smaller overall size and smaller guest rooms reflects higher build costs in London (and the USA and Europe)
Locations like London can still earn top rates and achieve high RevPAR from smaller hotels
Design Economics
MARKET FEEDBACK FROM KEY DAVIS LANGDON LOCATIONS
Dublin
Top end hotels dominated byprivately owned stock
2003 – 2008 saw huge increase innew hotel development
Currently a huge over supply
12% drop in visitors in 2009
Occupancy levels down to circa 55% (last seen in the early 1980’s)
Very low levels of development activity or intent
Some Feedback from around the World
Some Feedback from around the World
Beijing
Top end market is still very ‘hot’
Four Seasons have two new andcurrent hotels under construction
Typical size is 50,000m2 with400 – 500 bedrooms
Most have 4 – 5 restaurant options
Top end hotels all tend to be new build
Hotel fabric and Operators are both international 5* grading but service levels yet to reach 5* standard
Hong Kong
All top end hotels in the citycentre or CBD
Shortage of land in the CBD
Ritz Carlton to open a major hotel in 2010
Food and beverage a major source ofincome for top hotels
Top hotels tend to be surrounded by high end shopping/retail offer
A lot of budget hotels now under construction – tend to be outside centre and aimed at mainland Chinese visitors
Some Feedback from around the World
Singapore
Top end hotels all 200 – 500 rooms
Historically a mixture of new buildand conversion (Raffles was arefurbishment and Capella and theFullerton were conversions)
Two Integrated Resorts nearing completion – will release 4,000 top end rooms into the market
6 – 7 further hotels under construction in 2010
2009 was a tough year in Singapore – 20% decline in average room rate for 5* hotels
Some Feedback from around the World
Sydney
Current occupancy levels are80% plus (five major cities in the2008 occupancy ratings)
Probably one of the few world widelocations not to have felt the chill windsof recession
Still demand for top end hotels – but short on supply (economics are difficult to make work)
Biggest scheme underway is the new 5* Star City Casino Development
Some Feedback from around the World
Barcelona
Top hotels in centre areconstrained by density ofhistoric core
21 of Barcelona’s 321 hotels are5* standard
36% of hotel stock is privately owned
Between 2006 and 2009 - 36 new hotels were completed, 6 were top end 5*
Between 2010 and 2012 - over 50 more are planned but a serious slow down due to the economic position
Some Feedback from around the World
Some Feedback from around the World
London
Mature market, historic context, high property and land values
Top performing location
Great tourist draw
Backdrop of London 2012 looming
Some of the greatest top end hotels in the world but…..
A lot of over rated 5* hotel stock
A lot of top hotels in need of refurbishment and upgrade
LONDON – WHAT WILL THE FUTURE BRING?
London – What will the future bring?
2010 sees some great additions to London’s top end offer – Savoy re-opening, W Hotel (Leicester Square), Four Seasons on Park Lane and the Corinthia
Occupancy growth is forecast in 2010 – 2 to 2.5%
Room Rate growth – 3.5%
6,000 new rooms under construction by 2013London - New Hotel Room Supply by Category 2010-2013f
Source: TRI Hospitality Consulting
0 1000 2000 3000 4000 5000 6000 7000
UnderConstruction
Probable
Possible
Rooms
London – What will the future bring?
35% of this supply will be 5* / Luxury hotels
Key focus on the City and the West End (in particular Westminster)
5* and Luxury market make for more attractive development propositions
Big overseas luxury brands seeking entry into London (ie Shangri-La at the Shard)
The future is looking good for top end hotels – both for the construction and property sector and for tourists and business users but…..
Some London hotels have much to learn from their counterparts around the world and need to ‘raise their game’ in terms of quality and service standards
QUESTIONS
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