Paris's luxury hotels brace for new Asian rivals

Fri Jan 7, 2011 3:18am EST
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By Astrid Wendlandt

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.

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 opened a plush new hotel with exceptional views of the Eiffel Tower while a Mandarin Oriental 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.   Continued...