It’s a tale of two cities — whatever hardships Londoners might be enduring, their home remains a magnet for the world’s ultra-elite. The big hospitality brands know it: alongside New York, Tokyo and Paris, the capital’s top-tier properties achieve some of the world’s highest rates.
And they don’t just profit from their overnight guests — a broader community of ultra-wealthy residents and moneyed tourists ensure their pricey spas, restaurants and bars remain busy all year round. Though these properties are beyond the reach of the majority of us, they’re properly busy and generate serious money.
Deloitte’s summer assessment of luxury travel has listed its global market value as $1.2 trillion, based on activity monitored in 2021, and expects the sector to enjoy projected growth of 7.6 per cent until 2030.
It’s the high probability of achieving big profits that is the primary draw for any major foreign hotel brand to establish itself in the city, but London’s commercial heft, cultural clout and broader brand value all contribute greatly to that certainty. Our non-stop calendar of exhibitions and shows, alongside a benign climate also provides its own kind of certainty.
At a conference I attended recently, industry heavyweights contemplated a time in the near future when selling high-yield rooms during southern Europe’s high summer would be impossible. In comparison, investors don’t consider our city’s relatively rainy weather to be nearly so troublesome.
The decision-makers who sign off on these huge projects often have a genuine love of the city. The chairman of the body that owns The Peninsula Hotels has long had a home in England and had been looking for the perfect location for his lavish new property for decades.
Few cities command such affection and commitment. That isn’t something hospitality companies can take for granted. As Barcelona grapples with over-tourism it has made it increasingly difficult for new hotels to be established in the city; in the end, a number of senior hotels told me, they gave up and focused on Madrid instead.
John O’Ceallaigh is the founder of LUTE, a consultancy that provides guidance to luxury-travel brands and hotels worldwide.