Do real luxury hotels earn money?
#1
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Do real luxury hotels earn money?
If we take the narrow FT definition of luxury (like Amanhotels, FS, Dorchester, PEN):
Do real luxury hotels earn real annual returns?
Or is it mostly for appreciation of real estate value?
Or rather a prestige benefit for Ultra-HNWI hotel owners?
I hear that the best money is earned in the 4 star category.
And undoubtedly a lot of the flagships struggle.
Do real luxury hotels earn real annual returns?
Or is it mostly for appreciation of real estate value?
Or rather a prestige benefit for Ultra-HNWI hotel owners?
I hear that the best money is earned in the 4 star category.
And undoubtedly a lot of the flagships struggle.
Last edited by TrophyCollector; May 19, 2010 at 5:04 am
#2
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Many high-end hotels do lose money, but obviously the ones that stay in business have a revenue stream that makes it work. Often it is from other than the hotel itself. Hardly surprising: most of the 10 best restaurants in the world lose money (despite charging hundreds for a meal). There are so many other revenue sources available that sometimes book tours are worth more
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#4
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My guess would be that a property that is clearly acknowledged as the best in a given area is going to attract (almost by default) a good deal of non-lodging revenue from things like corporate parties, weddings, and the like. The cachet that "being the best" provides can serve to allow these hotels to drive profitable food & beverage income.
#5
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My guess would be that a property that is clearly acknowledged as the best in a given area is going to attract (almost by default) a good deal of non-lodging revenue from things like corporate parties, weddings, and the like. The cachet that "being the best" provides can serve to allow these hotels to drive profitable food & beverage income.
I chose my Trophy name relating to hotels that are a status symbol to visit (in my case) - or own (important motivation for billionaire owners of Dorchester Group, Frégate, African lodges, many FS, etc.).
Especially Amanresorts with hard access, few rooms and virtually no outside-F&B must have constant difficulties. We should thank the owners for providing such an excellent price-benefit-ratio, even at prices way above 1.000 US$.
#6
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I recall reading somewhere that for Mandarin Oriental their most profitable hotel was 4* Excelsior in Hong Kong and that's why they keep it, despite it being the odd one in their portfolio
#7
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Kage quoted some financials here http://www.flyertalk.com/forum/13542264-post47.html.
#8
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That sounds consistent with what I hear about real luxury hotels - and how tough it is to earn money with them. As compared to the 4* segment.
#9
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one can pull up financials for any public company...
im amazed at how many things have 5% > 10% margin, even in luxury industries.
OE "tourist trains and cruises" > http://www.flyertalk.com/forum/13852961-post24.html
aman did better >http://www.flyertalk.com/forum/13610023-post102.html
other >
http://www.flyertalk.com/forum/13627784-post24.html
http://www.flyertalk.com/forum/13979995-post184.html
Kage quoted some financials here http://www.flyertalk.com/forum/13542264-post47.html.
OE "tourist trains and cruises" > http://www.flyertalk.com/forum/13852961-post24.html
aman did better >http://www.flyertalk.com/forum/13610023-post102.html
other >
http://www.flyertalk.com/forum/13627784-post24.html
http://www.flyertalk.com/forum/13979995-post184.html
Last edited by Kagehitokiri; Sep 18, 2011 at 12:24 pm
#10
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you can pull up financials for any public company...
im amazed at how many things have 5% > 10% margin, even in luxury industries.
other stuff >
http://www.flyertalk.com/forum/luxur...l#post13852961
http://www.flyertalk.com/forum/luxur...l#post13627784
http://www.flyertalk.com/forum/luxur...l#post13979995
aman was better >
http://www.flyertalk.com/forum/13610023-post102.html
im amazed at how many things have 5% > 10% margin, even in luxury industries.
other stuff >
http://www.flyertalk.com/forum/luxur...l#post13852961
http://www.flyertalk.com/forum/luxur...l#post13627784
http://www.flyertalk.com/forum/luxur...l#post13979995
aman was better >
http://www.flyertalk.com/forum/13610023-post102.html
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#13
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room service
http://www.flyertalk.com/forum/4474058-post19.html
http://www.flyertalk.com/forum/13006779-post53.html
http://www.flyertalk.com/forum/4474058-post19.html
http://www.flyertalk.com/forum/13006779-post53.html
Last edited by Kagehitokiri; Sep 18, 2011 at 12:23 pm
#14
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Many high-end hotels do lose money, but obviously the ones that stay in business have a revenue stream that makes it work. Often it is from other than the hotel itself. Hardly surprising: most of the 10 best restaurants in the world lose money (despite charging hundreds for a meal). There are so many other revenue sources available that sometimes book tours are worth more
#15
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