Yahoo Lifestyle Why Secret Luxury Hotels Are Opening Inside Existing Properties
When local media reported that Madeira’s most famous son, Cristiano Ronaldo, rang in 2024 enjoying the boom of fireworks from high atop the Portuguese island’s Savoy Palace, it’s just the kind of boldface endorsement hotelier Ricardo Madias-Farinha was hoping for.
At the time, Madias-Farinha was celebrating the opening of his family’s seventh hotel; their crown jewel, hidden within the Savoy Palace.
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Dubbed the Reserve, the new hotel joins a growing number of somewhat-secret upscale hotels-within-hotels. With just 40 rooms, the Reserve occupies the top floors of Savoy Palace. Its rooms are larger, ranging from 580-square-foot suites with private plunge pools to a 2,300-square-foot Retreat penthouse. While other rooms are mirror images of Palace suites, these rooms come with elevated design embellishments and personalized service.
A separate entrance and check-in process leads to a private sun-emblazoned elevator inspired both by Louis XIV and the Atlantic-facing accommodations. There’s access to a private pool that’s more intimate than the one shared by the 349 rooms belonging to 2019’s Savoy Palace, and all-day dining at the Reserve-exclusive Jacarandá Club lounge and restaurant.
Reserve guests also enjoy complimentary transportation for the duration of their stay in a Rolls-Royce.
Elsewhere in recent years, Santa Fe’s historic La Fonda on the Plaza has craved out a private 15-suite enclave called Terrace Inn; South Florida’s the Boca Raton has debuted a Tower Suite Collection; and the Breakers Palm Beach has renovated the Flagler Club into a boutique hideaway on the top two floors. They’re all examples of brands adding different levels or sub-brands within existing footprints.
It’s a phenomenon born out of a global luxury hotel market that’s growing faster than hoteliers can deliver. By capitalizing on existing hotel buildings, brands can create a fresh block of highly priced rooms with a minimum of renovation and a lot of rebranding. Better still, they can do it fast.
But some industry experts are suspicious of this upstairs/downstairs approach to inn keeping.
“This is the same thing as when VW takes a Passat, puts an A3 badge on it, and it becomes an Audi,” says Arsalun Tafazoli, founder of San Diego-based hospitality group CH Projects. “It seems like a great idea for someone looking at spreadsheets, but not necessarily someone who understands the humanities of a space.”
He recalled his stay at NoMad Las Vegas, a “fragmented” attempt to re-create a distinctly New York City experience within the behemoth 2,700-room MGM Resort in the heart of the Strip. “That lobby level just got really schizophrenic to me. That original was just so special, and then they exploited the hell out of it,” Tafazoli says.
Designing with intention—such as different entrances and elevator banks, instead of gerrymandering existing spaces—is perhaps one of the biggest challenges for properties that aren’t truly new builds, he explains.
“An obvious ‘split’ or delineation between spaces, with floors dedicated to this or solely to that, just seems disingenuous,” Tafazoli says. “It doesn’t feel like that’s the original intent, or the heart and soul of what that place was supposed to be.”
For Leigh Salem, a partner at Brooklyn-based design firm Post Company, creating a new hotel division within an existing operations is no quick fix and needs to go beyond gold fixtures on “more exclusive” floors and silver on the others, she says.
“In some ways it’s much harder than building a hotel.”
“This trend is a marketing ploy,” adds Jaclyn Sienna India, founder of Sienna Charles. “It’s mostly only four-star hotels that are trying to be ‘luxury,’ by putting great sheets on a bed, which anyone can do. That’s not ultra luxury, it’s mass-market luxury. The way hotels today are elevating is not by creating distinct experiences, but by raising prices.”
Even at 5-stars, the experiential differences between categories can be unclear—particularly in properties where room space is at a premium.
For instance, the lowest Flagler Club room category is almost identical in square footage to those in the Breakers portion of the hotel (315 square feet vs. 300 square feet), while the largest suite categories for each are roughly 600 square feet. Flagler Club rooms range from $3,000 to $6,000 per night, depending on the season and room type, while the average cost for a night at the Breakers is just $1,433.
“The Flagler Club rooms are notoriously small, for what they charge,” India says.
Yet, the repeat guest rate for Flagler Club is 50 percent, says Flagler Club general manager Jessica Regen. As part of the recent renovation, the number of guest rooms decreased from 25 to 21, and the number of dedicated team members for those two floors increased from 19 to 21—a one-to-one ratio per room for even more personalized service.
And that’s the key to “true luxury,” says India.
“People need to calm down with the stupid marketing [around hotels within hotels], and just offer great service,” she says. “No one cares about that, or what your new spa treatments or irrelevant partnerships are there. At the end of the day, when you know my name, know and meet my preferences and recognize that I’m there even though I have choices, you live up to the promise of phenomenal service for what you’re charging—that’s luxury.”
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