4 days ago
The £1,000-a-night hotel is here to stay – and I know why
Oscar Wilde once said that 'a fool is someone who knows the price of everything and the value of nothing'. As a hotelier, these are words that have remained close to my heart throughout my career.
Almost 30 years ago I dined at Chez Nico at Ninety Park Lane, where Nico Landelis – then one of the most celebrated chefs in the world – had been brought into one of the most expensive restaurant sites in the city by Sir Rocco Forte to create a destination restaurant at the Grosvenor House Hotel.
This was the first time a celebrity chef had been brought into a hotel space in London; Marco-Pierre White, Heston Blumenthal, Angela Hartnett, Marcus Waring et al would soon make similar journeys, but Nico was the trailblazer.
A meal for two at Chez Nico cost a smidgen under £400, which was a king's ransom back then. Friends the next day wanted to know all about my experience and several asked how I felt about shelling out so much cash on 'just' a meal.
I was delighted to admit to them that I was just fine about it; indeed the truth was that I would happily have paid more. I had just enjoyed the best meal of my life, a dream-like epicurean evening, and by those metrics it offered tremendous 'value' to me.
Price, however, has now become impossible to ignore. Luxury dining in hotels and indeed high-end hotels themselves have become increasingly pricey over the past 30 years; in London the £1,000-a-night barrier is regularly breached – and the real change has happened since Covid. So what is driving this price rise, and can value still be found at the top of the market?
The people
All luxury is created by people: talented, highly skilled individuals. At the very best hotels we need an army of wonderful, dedicated and able colleagues to create the magic.
At The Goring we have only 69 bedrooms (making us one of the smallest of London's great hotels ) but we employ just short of 200 staff members to deliver the high levels of traditional service which our guests expect from us.
Over the past few years the cost of employing the very best people has risen sharply, much more quickly than any other period in my 40-year career. Indeed, in the last five years alone, wage costs have risen between 30-40 per cent.
We seek out the finest staff we can find because we know that the greatest asset of any hotel is its people. In London many of our industry's greatest waiters, chefs, barmen and front-of-house staff have returned back to their homes abroad following changes in freedom of movement laws.
The result is a much smaller pool of potential staff, which has led to significant increases in pay, all of which ultimately ends up in the price mix.
The surroundings
At the luxury end of hospitality only the best will do – and that means everything you see around you in a hotel. At The Goring the silks on the walls are woven for us by Gainsborough – silk-makers to palaces across Europe, great houses in America (including The White House) and high-net worth families across the globe.
Our wallpapers are hand-painted bespoke designs by Fromental; some are even hand-embroidered in silk over the painting. Each bedroom has individually made furniture from great British furniture makers: Linley, Gosling and Manbourne.
All of these suppliers are luxury brands themselves; all have experienced huge price increases, with the costs of their raw materials and skilled workforces far outweighing headline inflation increases.
Luxury hotels endeavour to supply the best that money can buy, so that guests will experience the intangible 'value' of their stay that Wilde identified.
Think of your bed, with its crisply (and expensively) laundered 800 thread count Egyptian cotton sheets, or those piles of bright white towels and all those unctuous soaps, creams, shampoos and body washes. (And when it comes to the bathrooms themselves, these have to be exquisitely decorated havens of cleanliness and recuperation. Some hotels spend £75-£100,000 on a single wet-room refurbishment.)
Next time you sit in a luxury hotel's dining room or bar, take a moment to notice the glassware, the china and the cutlery. The china will almost certainly be of a bespoke design, costing upwards of £40 a plate or £50 for a cup and saucer.
Alas, all china and glassware chips, and the finer it is the more easily it damages. When it comes to cutlery, a local restaurant is likely to use stainless-steel cutlery. However, in luxury hotels all the flatware is at the very least silver-plated and polished every day before use. Just another small detail in creating a really wonderful hotel experience.
And don't forget the 'consumables': some cuts of beef rose by over 30 per cent last year; chocolate prices have never been higher; the same goes for champagnes and wines.
The business
Business rates continue to penalise physically large businesses such as hotels located in towns and cities. These rates can amount to hundreds of thousands, even millions of pounds before we even open our doors. As well as the increasing cost of staff wages we now have to add in the recent National Insurance increase to that equation.
Then there's the 20 per cent VAT we have to factor into all our prices (one of the highest rates of VAT on accommodation in Europe). The removal of VAT relief for overseas visitors has led to many of them swerving London for cities such as Paris, Rome and Milan for their holiday shopping trips.
This loss of high net worth guests affects many British businesses including hotels, restaurants, taxis and luxury shopping (though the big luxury shopping brands may make up some of their losses in the other European cities) .
Energy prices have soared; gas costs have followed suit. Like most businesses we have seen eye watering increases in our various insurances over the last five years. The costs of our refuse, collection and recycling only goes one way. The move to be more sustainable as a business sector is vital but we must accept that it comes at a financial cost for all of us.
Much of the international business incoming to London and the United Kingdom is reserved at our properties by travel advisors across the world, particularly in America. These are vital partners for all luxury hotels. However, they typically charge between 10 and 20 per cent commission on their reservations, which is yet another cost of doing business in the hospitality world.
Finally I want to mention another major cost: investment. No hotel can stand still; all require constant and substantial expenditure. Most bedrooms are 'soft-refurbished' every seven or so years, which means all carpets and fabrics are replaced and the room completely redecorated. Every 20 or so years a full redesign of rooms tends to be programmed into the hotel life-cycle.
Running a luxury hotel is a complex business, with many expensive moving parts.
However, I have always found them a joy to work in – and should always be a joy for our guests to stay in. Hopefully, despite the cost, they will perceive the value of what they experience, just as I did at Chez Nico all those years ago.
