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by Cheryl-Anne Sturken | June 7, 2012

atlantaThis week at the 34th Annual New York University International Hospitality Industry Investment Conference, a two-day event held at the New York Marriott Marquis, top executives from several luxury hotel companies were in attendance. The Hotel Insider got a chance to meet with many of them to find out about their expansion plans around the globe, their perspectives on group business and the challenges this sector faces as the competition heats up with new entrants.

There's good news for patient meeting planners, who can expect to see more luxury products in key group markets at home. "Los Angeles is a priority for us. We are currently looking at three projects there," said Richard Barker, executive vice president, operations director, the Americas, for the Mandarin Oriental Hotel Group. "Finding the financing and the right deal takes time. But I think we are very close to announcing something." Just last month, the chain opened the 127-room Mandarin Oriental Atlanta, which features six meeting rooms and a 15,000 square-foot spa. The property is a revamp of the former Mansion on Peachtree, which was managed by Rosewood Hotels. "We had wanted to be in that market for years," says Barker. "We are very bullish on growing our brand. Some may be conversions, like in Atlanta, but we might also look at acquiring a small luxury chain."

Last year the luxury sector enjoyed a 72 percent occupancy, according to Smith Travel Research, the highest of all market sectors, reflecting an improvement of 5.7 percent over the year before. Buoyed by a healthy performance, even as the U.S. economy and the European Union struggle with economic uncertainty, luxury hotel operators plan to get back to the business of driving rate. "New hotel growth is slowing, and that will only help luxury," said Kathleen Taylor, president and chief executive officer, Four Seasons Hotels and Resorts. "America is performing very well at the high end." Also bullish on North America is Homi Vazifdar, managing director of Canyon Equity, which owns and operates several ultra-luxury properties such as the Amangani in Wyoming. "I think rates will continue to inch up, especially in North America, where the rate is very sustainable," said Vazifdar.

In terms of International growth, Asia Pacific and India continue to be the top expansion destinations. "India has, at the most, 200,000 hotel rooms. The U.S. has five million. So there is a huge need," noted Raymond Bickson, managing director and chief executive officer, the Indian Hotels Co., which includes the iconic Taj Hotels, Resorts and Palaces. "You can imagine when all of these hotel brands look at India, they see opportunity," said Bickson. "There are now 47 hotel companies in the country, when it used to be controlled by only three. A lot of the development is at the midscale level, but there are many luxury hotels being built."

According to Starwood Hotels & Resorts, which has 33 properties there, India is the Luxury Collection brand's largest market outside of the U.S. Likewise, this year will see the launch of the Sofitel and Pullman brands in several large Indian cities. In April 2012, the country's economic capital of Bombay welcomed its first Sofitel, the 302-room Sofitel Mumbai KBC, and two other Sofitel properties are under development for that city. Planners should keep an eye on South and Central America, too, as well as major cities in Turkey, where development activity is red hot, according to hotel executives. Among notable projects is the ultra-luxurious 130-room Raffles Istanbul Zorlu Center, with event space for 1,200, which is scheduled to open in the fourth quarter of this year.