Hotel Companies Break Out Luxury Tiers

Hotel Companies Break Out Luxury Tiers

By David Eisen

In a quest to reap the rewards of the influx in luxury travel, many hotel companies have rethought their inventory and decided to re-identify their current crop of luxury properties and, in some instances, launch entirely new brands.

Obviously that is what Sofitel had in mind in creating its new luxury tiers, and, similarly, what Starwood Hotels & Resorts did by isolating and allowing its Luxury Brands Group to breathe on its own.

One of the problems is that the luxury segment is becoming more crowded by the quarter, with operators touting almost anything as luxury. It used to be that you could count the number of luxury brands on one hand. You had: Four Seasons, Ritz-Carlton, St. Regis, Mandarin Oriental and, to some extent, Conrad. (Some would also make a case for Fairmont and InterContinental.) Those five still remain, but many boutique hotels along with other independent properties are now obfuscating the luxury picture.

Now, or so it seems, any small boutique hotel is calling itself a luxury property. W Hotels, which pioneered the boutique brand, was usually accepted as upscale. Now, folded in Starwood's Luxury Brands Collection, it is deemed luxury, at least by Starwood.

Marriott International will surely tout its new Ian Schrager-collaborated properties as luxury—which is to say boutique luxury. One could argue that W was the progenitor of this tier, and companies such as Marriott are looking to cash in on the growing segment. Schrager and Marriott are expected to collaborate on about 100 boutique properties under a yet-to-be-determined name.

Hyatt, a hotel company that competes primarily in the upscale and upper-upscale segments, has announced its own plans for a luxury brand, Andaz. According to Hyatt, Andaz will focus on casual luxury, offering guests an environment that allows them to live in their own personal style. The first North American Andaz's will open in New York in 2009, while the Great Eastern Hotel in London has already been reflagged and been operating as an Andaz since October.

Reversely, some luxury brands are spinning off "boutique-y" brands. Ritz-Carlton earlier this year announced The Reserve brand, whose first property will open in Turks & Caicos in 2008. "A departure for Ritz-Carlton in size and scope," said Simon Cooper, president and COO of Ritz-Carlton. "The Reserve brand will feature signature, one-of-a-kind boutique resorts located in choice settings with distinctive personalities."

Yes, it's safe to say that hotel companies are looking to take on new and distinct personalities, focused on raising the bar and awareness of their luxury offerings.


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