January 7, 2011 / 10:26 AM / 9 years ago

Paris's luxury hotels brace for new Asian rivals

PARIS (Reuters) - Luxury Parisian hotels are entering 2011 knowing they need a combative spirit and ambitious initiatives to protect their turf from the arrival of powerful Asian chains such as Shangri-La, Mandarin Oriental and Peninsula.

France's President Nicolas Sarkozy and German Chancellor Angela Merkel arrive at the Bristol restaurant for lunch following a bilateral summit at the Elysee Palace in Paris June 11, 2009. REUTERS/Philippe Wojazer (FRANCE POLITICS)

The three luxury Asian hotel groups have invested heavily to get a foothold in Paris, ranked as one of the world’s top tourist destinations, prompting rival European five-star hotels to make major refurbishments and review their strategies.

Last month Shangri-La (0069.HK) opened a plush new hotel with exceptional views of the Eiffel Tower while a Mandarin Oriental (MOIL.SI) is due to open in the summer and the Hong Kong-based group Peninsula is to open a hotel near the Champs Elysees in 2013.

“Of course we are worried,” said Francois Delahaye, director of the five-star Plaza Athenee, which belongs to the Sultan of Brunei.

“The arrival of Asian competition forces us to put ourselves into question ... But we will not let ourselves be overtaken and lose market share.”

Delahaye said the Asian chains would introduce new services in Paris — some offer in-room spa services — a different culture and would prove tough to beat as the chains can draw on a significant database of loyal Asian customers.

In October another rival returned to the Paris luxury hotel market, the entirely refurbished Royal Monceau, which is managed by the Singaporean group Raffles.

To address the new competition, unprecedented in Paris, Delahaye said the Plaza Athenee, one of Paris’s most high-profile venues, is renovating its rooms, expanding its premises and investing in training and retaining staff.

In the same spirit, five-star rivals the Bristol and Four Seasons George V also said they were refurbishing their rooms.

But Didier Le Calvez, the seasoned hotel manager who runs the Bristol and used to manage the George V, said he expected to benefit from such new Asian competition as it would attract fresh flows of Asian tourists to Paris.

“They (Asian hotel chains) are helping put Paris on the map and promote the capital as a tourist destination,” said Le Calvez. “I think we can absorb this new competition.”

Le Calvez said the Bristol was refurbishing its gastronomic restaurant, doubling its spa space, renovating rooms and creating three new suites of 250 square metres each. By the end of April the hotel would be completely revamped, he said.

The Bristol is one of the last family-owned luxury hotels in Paris. It belongs to the German Oetker family who also owns the Hotel du Cap Eden-Roc on the Riviera, a famous hide-out for Hollywood movie stars.

Prices for a room at the Bristol, like many five-star hotels in Paris, start at 750 euros and reach 13,000-14,000 euros.

The Bristol, the Plaza Athenee and the George V, all said they enjoyed strong trading during the festive period and were all nearly or fully booked on and around New Year’s eve.

The three hotels said corporate customers, which had cut spending in 2009, had returned in 2010.

However, overall the year 2010 proved good but not as exceptional as hoped as the luxury hoteliers were hit by a series of disruptions to travel, starting with the Icelandic volcano cloud which grounded regional air traffic, followed by public sector strikes in France and finally by snow storms. (Editing by Greg Mahlich)

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