Luxury Travel Advisor held a roundtable of top general managers in London earlier this year. The prestigious event, hosted by Kostas Sfaltos, general manager of One Aldwych, drew together 11 hotel executives, some from the newest properties in town, others from highly esteemed, long-standing classics. It all made for an extremely dynamic discussion.
In attendance were: Jurgen Ammerstorfer, Shangri-la at The Shard; Paul Brackley, The Beaumont; Geoffrey Gelardi, The Lanesborough; Anne Golden, Mondrian London; Renaud Gregoire, Corinthia Hotel London; Andrew Pike, The Milestone Hotel; Nathalie Seiler-Hayez, The Connaught; Kostas Sfaltos, One Aldwych; John Stauss, Four Seasons London at Park Lane; Botho Stein, The May Fair; and Sue Williams, Cliveden House.
Ruthanne Terrero, VP/Editorial Director of Luxury Travel Advisor, moderated. Below is a full video of the discussion, followed by our summary:
Ruthanne Terrero, Luxury Travel Advisor: Let’s look at London’s hotel market these days; what’s the impact of the new hotel supply on your business? I’d love it if the new hotels could answer this as well.
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| Andrew Pike, The Milestone and Kostas Sfaltos, One Aldwych |
Kostas Sfaltos, One Aldwych: It’s still very buoyant. The projections at the New Year talked about RevPar increases of 4 to 5 percent, mostly in the four-star market. There are still a lot of new projects and investments coming on line. There’s also an increased demand for new luxury residences. We see it in Covent Garden quite a lot. The minute that happens, a new neighborhood is created. The need for luxury services, health clubs, restaurants, and so on, increases.
The travel trade is sport for choice, but I think some people are very confused about which hotels to choose. Sometimes it’s better to stick to who you know. For our guests I think it’s great. Affluent travelers will return to London, but they want to experience something new every time.
Renaud Gregoire, Corinthia: We were one of the first hotels moving East, and there is definitely a shift to that side of town. London, with all of its new hotels, is certainly becoming the capital of Europe. As new hotels come on the market, it challenges us to become even better at what we do every day. This will continue, in my view, to push the level of standards in luxury across town because competition is always good; you always have to re-look at what you do and push boundaries.
Ruthanne Terrero, Luxury Travel Advisor: It is an interesting dynamic. Everyone I’ve spoken to here is excited about the competition, which I think speaks so much about the professionalism of everyone in this room. It’s a good challenge. Paul, what was it like for you opening a new hotel, knowing you’re coming onto the luxury hotel scene with other hotels coming on line at a similar time?
Paul Brackley, The Beaumont: Before we got into the white heat of activity, we looked at the market and at the new inventory coming on. Better product forces people to renovate so there have been a lot of renovations going on as well. We were able to look long and hard at what we should be and how we might be able to differentiate.
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| Geoffrey Gelardi, The Lanesborough |
London is fast becoming one of the hotel capitals. It’s great news for the traveler. Look at the choice, not just the location, but in terms of style, the offering from the contemporary to the traditional to the classic. In a way, our location and the history of our 1926 listed façade did a lot of the talking for us. We wanted to be true to the history of the building and, while we wanted to embrace technology and everything that the modern, affluent traveler would like to see, we also wanted some of the success to be measured by the fact that if you walked in to the lobby you would feel, not who’s designed this, but who’s done this beautiful renovation of this building, and why didn’t we know about it before? That is the feeling we wanted to create. I think that’s largely been successful, but we’ve also looked at all of the latest trends in technology as part of what we offer, and we’ve done a good job of delivering that.
Ruthanne Terrero, Luxury Travel Advisor: John, you’ve been excited about the new competition as well from what we were talking about earlier.
John Stauss, Four Seasons London at Park Lane: Right. I think it really does bring out the best in us, and London is such a great luxury hotel city. I’m going to get in trouble here, but if you take a city like Paris, for example, which has fabulous hotels, somehow they’re a bit homogeneous. Perhaps in New York, there is a little bit of that, too, but the luxury hotels in London are such a diverse collection. I don’t think there’s any gateway city in the world that has a more diverse collection of luxury hotels, all across the spectrum. It gives travelers a choice, it gives the agents a choice of where they put their clients, and it keeps London center stage.
The re-openings and the new openings are just fantastic for the destination. There’s always news about the luxury hotel sector in London. It’s good for all of us. I welcome that.
I agree totally with the point that it brings out the best in us because the luxury hotels in London can compete with any destination in the world, in terms of the caliber of the service that we offer. It keeps us on our toes.
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| Botho Stein, The May Fair |
Nathalie Seiler-Hayez, The Connaught: I agree with you 100 percent and I always make the parallel, of course, between Paris and London. I think of London as a destination, because at the end of the day we are selling a destination. London is taking over so much in the fashion, in the art, in the design worlds. It is amazing. Having all of these investors focusing on London is a reason for that, and the market is big enough, there’s enough demand to have this amazing supply. As John was saying, it can only help us to promote the destination, and then to make sure that we challenge ourselves constantly, as a hotel, to remain at the top of our game and to make sure we deliver the best service.
Botho Stein, The May Fair: I can only second what is being said. I’ve just recently been to a leadership course at the Saïd School, part of the University of Oxford. During one of the sessions, we were talking about “growing the pie,” and I think this is just the best example of growing the pie and making sure that London as a destination remains very attractive for the international traveler. We had, at the May Fair, yet again a record breaking year in terms of revenue for 2014, so there’s absolutely no reason why we should be concerned about the competition in the neighborhood, or the upcoming new areas. The opposite is the case, we embrace it.
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| John Stauss, Four Seasons London at Park Lane |
Anne Golden, Mondrian: As one of the newly opened hotels, I think the London hotel scene is so interesting. We never really dreamt before we opened on the South Bank, that we would be, not so much competing, but seeing some of the business that we would normally associate with going to some of the fabulous hotels like Rosewood and Corinthia, and various others. I think it’s because travelers really want a different experience, and also the agents, to John’s point, want some sort of choice. We hadn’t anticipated that before we opened, but we have seen, as the new hotel properties have come on, just a renewed interest in London. It’s fantastically healthy for the market. It’s interesting just to see how travelers are engaging with more of a contemporary lifestyle product in a very different area.
Ruthanne Terrero, Luxury Travel Advisor: Are any of you finding that people are splitting up their vacation? Perhaps staying in one neighborhood and then coming to you?
Anne Golden, Mondrian: We’ve seen a little bit of that. We’ve seen travelers come to us on the weekend and then staying in the West End during the week. Perhaps in the past they would have jumped on the train and gone to Paris.
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| Anne Golden, The Mondrian |
Jurgen Ammerstorfer, Shangri-la at The Shard: The experience that we’ve had since we opened is that there is a bit of an educational part to our location. From a city perspective, that’s where I personally see the most potential moving forward. Pushing the boundaries is one of our roles more than anything. We realize there is still a certain lack of awareness among international travelers, even the seasoned ones that have experienced London in the past. Once you start talking about what the area has to offer, it becomes really interesting. We get this as feedback from our guests. I think the initial thought of London meaning West End is getting less and less, if you wish. From a perspective of growth, the opportunity truly is here, the demand is here.
Ruthanne Terrero, Luxury Travel Advisor: That opportunity for them to learn about the new neighborhoods might be that they’re seeking that authentic travel experience which we keep hearing about.
Kostas Sfaltos, One Aldwych: Even Covent Garden, which you would argue is a very well-known neighborhood, is going through a huge regeneration. It has completely transformed itself. It kept its identity, but it’s also become interesting. It’s a process of re-education. London is small villages that came together. That’s why every part of London has its own identity. Geographically we could argue we’re in the heart of town, but I think the heart of town is where people’s heart is and what they want to experience. I think that’s why that diversity, in extending out, is benefiting all. It makes London, as a proposition, far more interesting. Affluent travelers want to travel but they will revisit London because of what it is.
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| Andrew Pike, The Milestone, Paul Brackley, The Beaumont |
I think that’s also what gives, as Renaud mentioned, service even more substance. We shouldn’t forget to go back to the basics. A hotel is not a collection of new furniture or great facilities that we hoteliers think are amazing. If service is not relevant, we’re not relevant. Therefore, all the stories about location and new product don’t really count unless you’re able to deliver what your guests are looking for.
Anne Golden, Mondrian: It’s our job to educate, as well. We’ve talked to a lot of the agents and the larger accounts in the North American market about how it’s similar to New York. We’re talking about the Meatpacking District and how, 15 years ago, there really wasn’t anything there. It was a little bit of a no-go zone. Look how that’s completely developed, with fantastic luxury boutiques, not to mention the restaurants and the hotels. We try to liken it somehow to the expansion of that area and where a once sort of quieter area in London has now expanded and become so much more interesting.
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| Nathalie Seiler-Hayez, The Connaught |
Ruthanne Terrero, Luxury Travel Advisor: It helps to cater to the client who might want something a bit edgier.
Geoffrey Gelardi, Lanesborough: I have a slightly different perspective. I’ve been in this market for almost 25 years now, so I know it and I’ve seen it change. There has been a very big change in the last five years or so. Clearly, things are much more competitive and that actually is a good thing. It’s been really interesting to monitor where my guests have gone and how they’re acting. We used to have terrific guest loyalty. I think guest loyalty is dying fast. People want to try new things. Before, people would just go to places because that’s where they were comfortable. Now, with the competition and the job that all of you guys are doing, promoting yourselves and promoting the different areas, it’s certainly had an effect on how we operate. It’s given the guest the ability to do whatever they want and to be more demanding. Response time, for example, is another thing that the guests will not tolerate today. If he sends in a request or even a reservation and you wait a day or a couple of days to respond, they’re gone. There’s less loyalty with the guests.
Ruthanne Terrero, Luxury Travel Advisor: Sue, in terms of new supply, what does that actually mean to Cliveden? It is a little different for you being outside of London.
Sue Williams, Cliveden House: I spend a lot of time trying to keep very abreast of everything that is going on in London because we’re such a short hop away, and I think of our old history and heritage as a complete tie-in with London. We are a half a day’s ride from London. Business is strong for us, and thank you. Keep it going. It’s strong; it’s feeling very positive all around.
Andrew Pike, The Milestone: I spent the first four to five years at the most, trying to convince the U.S. travel agency fraternity where Kensington was. Move the clock forward three or four years, and they know where Kensington is. We’ve just been saying that there is huge diversification now, and people are less inclined to be tied to a specific part of London, but I think it’s got to be good news overall because it is making people realize that London is a series of different spaces, and they’ve all got their own character. There is something for everybody.
There are three key criteria to me for five-star hotels: Service, location and the style of the property. When I started with The Milestone, a number of people said to me, “It’s got to be location first. If you’re not in the right part of town, forget it. Forget about rates. It’s about location.” But now, 10 years later, location is still important, but the service element appears to be number one, and clearly if people like a contemporary hotel they are less likely to stay at The Milestone. There is nothing I can do about that.
As Geoffrey was saying, the days when you could consider that the happy guest at your property would automatically return and bring the next generation of their family there, have gone now. In fact, the next generation will probably be looking for something a little different. So it’s a two-edged sword. It’s exciting for London, which is good for us all. I think we definitely have to step up to the mark even more than we’ve done before, but we’ve got to adopt a broader view as well.
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| Ruthanne Terrero, Luxury Travel Advisor and Kostas Sfaltos, One Aldwych |
Emerging Neighborhoods
Ruthanne Terrero, Luxury Travel Advisor: The newer neighborhoods are so interesting to hear about. Are your clients asking to go to places such as Shoreditch?
Jurgen Ammerstorfer, Shangri-la at The Shard: Our head concierge has found that North American travelers, and particularly those from New York, are asking for these new areas, I believe because New York has seen similar changes with areas that are now up and coming.
Kostas Sfaltos, One Aldwych: We find a similar trend. People like to check out the restaurants there, and then come back into their hotel. There are a lot of technology companies, so there is also a business aspect connected with Shoreditch. The Millennials absolutely love it, especially when you’ve got multigenerational families, the young crowd wants to go there, whether it’s a pop-up restaurant or a trendy bar, or a trendy barber even.
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| Geoffrey Gelardi, The Lanesborough and Jurgen Ammerstorfer, Shangri-la at The Shard. |
You now have such an evolution of the hotel scene there, as well. You had the Hoxton, you had the Ace Hotel and now you have M by Montcalm opening. You have Nobu London and the Gansevoort, so there’s again an influx. It is all the four-star-deluxe market. I don’t mean that in any kind of a derogatory way, but that’s the kind of market that seems to be more relevant to [those areas]. Then you have other parts of London, such as Peckham and Hackney, where development continues.
Anne Golden, Mondrian: There are a lot of early adopters, particularly in the Northeast, who, when going to London or Paris now want to go back and [brag], “I discovered this place.” They want to be the people that talk about the new restaurant or the new bar or hotel. The imagery they’re posting on social media links into that.
John Stauss, Four Seasons London at Park Lane: We operate the hotel furthest east, in Canary Wharf. Obviously there are guests hanging out a lot in Shoreditch, because they’re over there. Then we also operate the hotel furthest west in this group. It’s only 28 miles from Hyde Park Corner, our hotel in Hampshire, but I think reality is that all of those groups migrate more to the other areas much more than they used to. It’s the same for the guest who is perhaps staying in Canary Wharf around Hampshire, and coming into Mayfair. Mayfair is totally reinventing itself. Whether it’s restaurants or retail or galleries, there’s every reason for people staying anywhere in London to migrate into the West and particularly Mayfair. There’s a lot going on in Mayfair, and it’s not like Mayfair is just sitting there, not changing. While there’s a shift to the East, the West End is keeping pace every bit as much, I think, and your hotels are much more in the heart of the Mayfair. Even with the Beaumont opening so recently, there is evidence there’s lots going on in Mayfair.
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| Sue Williams, Cliveden House |
Renaud Gregoire, Corinthia: Our guests are much more educated than they used to be, because when we first opened, it was all about Mayfair. Now you don’t really have to explain so much the shift toward a new location, because people already know and they have explored already. They go because of a new culinary destination or new museums opening there.
Anne Golden, Mondrian: The Olympics did that as well. Olympic Stadium is in Greenwich and people were forced almost to go to this area in London. The fact that you could actually get on a train in St. Pancras and be in the Olympic Stadium in six minutes or something is crazy, but I think the whole moving things toward Greenwich really opened it up to a lot of people.
John Stauss, Four Seasons London at Park Lane: I had an American guest today who wanted to walk to the Tate Modern and wondered how long that was going to take from Hyde Park corner. I told her and she said, “You live here. Would you walk?” I said, “Absolutely I would, on a beautiful day.”
Paul Brackley, The Beaumont: We mustn’t overlook the huge developments in terms of infrastructure in London that have happened and are still going on with the Crossrail project coming to us in a couple of years. Getting into Mayfair will take 20 minutes from Heathrow and then another 10 minutes will take you to the heart of the city, you know?
Kostas Sfaltos, One Aldwych: There are plans for the Garden Bridge — a pedestrian bridge over the River Thames — just down the road from [One Aldwych]. This will mean a lot of people will be walking in this part and the opportunity to just cross from South to North will create ease, whether you stay in Mayfair or you stay here. It will be an interesting walk to take.
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| Renaud Gregoire, Corinthia Hotel |
Andrew Pike, The Milestone: I think we’ll see more guests who are happy and comfortable to use public transport. We had a request once from some guests who wanted tea at the Ritz, and they said, “So, what’s the best way to get there?” We said, “We’ll call you a cab to drive you up there.” But they wanted to walk. That was going back a few years now, but we planned out a route through the park, and the only time they had to cross any roads was of course at Hyde Park Corner, but other than that it was completely in the green space of London.
Geoffrey Gelardi, Lanesborough: Did they make it?
Andrew Pike, The Milestone: They made it safely. We used to shudder at the thought of suggesting the local underground station to a luxury traveler, and even now, we’ll keep out of the rush hour, but once they’ve been to London a few times, there’s definite willingness to experience London as a Londoner, dare I say. That’s a new trend as well.