1. Ambassadors Bloomsbury London : 28 April 2010 Stephen Frood Davis Langdon COMPARING HIGH END HOTELS IN LONDON TO THE REST OF THE WORLD

2. Content

Introduction

Defining high end hotels

What are the top hotels in the world?

Facts and figures on the top hotels worldwide

Market feedback from key Davis Langdon locations

London What will the future bring?

3. DEFINING HIGH END HOTELS 4. How do we define a top end hotel?

What makes a top hotel?

Range of large guest rooms

Substantial front of house facilities (restaurants, bars, banquet, conference, retail etc)

Range of back of house facilities to support hotel operation

Exemplary service and quality standards

Location, reputation and destination status

Cost

5. WHAT ARE THE TOP HOTELS IN THE WORLD 6. What are the top hotels in the world?

Beijing

Mandarin Oriental

St Regis

Park Hyatt

Shangri-La

Ritz Carlton

Singapore

St Regis

Raffles

Ritz Carlton

Capella

Fullerton

Hong Kong

Four Seasons

Mandarin Oriental

W Hong Kong

Grand Hyatt

Island Shangri-La

Barcelona

W Barcelona

Mandarin Oriental

Gran Hotel La Florida

Hotel Arts

Hotel Casa Fuster

7. What are the top hotels in the world?

Sydney

Park Hyatt

Four Seasons

The InterContinental

The Observatory

Westin International

New York

Four Seasons

Peninsula

Ritz Carlton

St Regis

Hotel Plaza Athenne

Paris

Four Seasons George V

The Ritz

Hotel Le Crillion

Hotel Le Bristol

Park Hyatt

Dublin

The Westbury

The Shelbourne

The Fitzwilliam

Ritz Carlton

The Dylan Hotel

8. What are the top hotels in the world?

Cape Town

Mount Nelson

The Table Bay Hotel

The Cape Grace Hotel

Crystal Towers

Westin Grand

London

The Ritz

The Savoy

Claridges

The Connaught

Dorchester

9. What can we take from this?

London, Paris, Dublin and Barcelona have more privately owned top end hotels

Key emerging world wide locations dominated by the leading luxury brands (Four Seasons, St Regis, Ritz Carlton, Shangri-La, Mandarin Oriental)

Major European Cities have mature markets and older more established building stock

Major European cities maybe have older more traditional hotel stock the Ritz in London, Claridges etc

Selecting the top 5 is very subjective !

Lets hold onto these thoughts and return to them later..

10. FACTS AND FIGURES ON THE TOP HOTELS WORLDWIDE 11. Operational performance of top end hotels

Occupancy global ranking index 2008

Source: Deloitte / STR Global 12. Operational performance of top end hotels

Average room rate global ranking index 2008

Source: Deloitte / STR Global 13. Operational performance of top end hotels

RevPAR global ranking index 2008

Source: Deloitte / STR Global 14. Operational performance of top end hotels

What Trends can we take from this performance data?

5 cities or locations feature in all three rankings Paris, New York, Dubai, Abu Dhabi and London

These destinations command top room rate, high occupancy and therefore leading RevPAR figures

Despite the negative impact of the world wide recession these are still leading world wide destinations especially for the top end market

15. Design Economics of top end hotels 16. Design Economics of top end hotels 17.

What Trends can we take from this data?

Far East and Asia Top End Hotels are bigger bigger bedrooms and bigger public areas

Proportion of public areas to bedrooms is higher

Bigger emphasis on food and beverage facilities in some of the emerging locations ?

Design size and standards reflects land and property constraints in historic and mature locations like London

Smaller overall size and smaller guest rooms reflects higher build costs in London (and the USA and Europe)

Locations like London can still earn top rates and achieve high RevPAR from smaller hotels

Design Economics 18. MARKET FEEDBACK FROM KEY DAVIS LANGDON LOCATIONS 19.

Dublin

Top end hotels dominated by privately owned stock

2003 2008 saw huge increase in new hotel development

Currently a huge over supply

12% drop in visitors in 2009

Occupancy levels down to circa 55% (last seen in the early 1980s)

Very low levels of development activity or intent

Some Feedback from around the World 20. Some Feedback from around the World

Beijing

Top end market is still very hot

Four Seasons have two new and current hotels under construction

Typical size is 50,000m2 with 400 500 bedrooms

Most have 4 5 restaurant options

Top end hotels all tend to be new build

Hotel fabric and Operators are both international 5* grading but service levels yet to reach 5* standard

21.

Hong Kong

All top end hotels in the city centre or CBD

Shortage of land in the CBD

Ritz Carlton to open a major hotel in 2010

Food and beverage a major source of income for top hotels

Top hotels tend to be surrounded by high end shopping/retail offer

A lot of budget hotels now under construction tend to be outside centre and aimed at mainland Chinese visitors

Some Feedback from around the World 22.

Singapore

Top end hotels all 200 500 rooms

Historically a mixture of new build and conversion (Raffles was a refurbishment and Capella and the Fullerton were conversions)

Two Integrated Resorts nearing completion will release 4,000 top end rooms into the market

6 7 further hotels under construction in 2010

2009 was a tough year in Singapore 20% decline in average room rate for 5* hotels

Some Feedback from around the World 23.

Sydney

Current occupancy levels are 80% plus (five major cities in the 2008 occupancy ratings)

Probably one of the few world wide locations not to have felt the chill winds of recession

Still demand for top end hotels but short on supply (economics are difficult to make work)

Biggest scheme underway is the new 5* Star City Casino Development

Some Feedback from around the World 24.

Barcelona

Top hotels in centre are constrained by density of historic core

21 of Barcelonas 321 hotels are 5* standard

36% of hotel stock is privately owned

Between 2006 and 2009 - 36 new hotels were completed, 6 were top end 5*

Between 2010 and 2012 - over 50 more are planned but a serious slow down due to the economic position

Some Feedback from around the World 25. Some Feedback from around the World

London

Mature market, historic context,high property and land values

Top performing location

Great tourist draw

Backdrop of London 2012 looming

Some of the greatest top end hotels in the world but..

A lot of over rated 5* hotel stock

A lot of top hotels in need of refurbishment and upgrade

26. LONDON WHAT WILL THE FUTURE BRING? 27. London What will the future bring?

2010 sees some great additions to Londons top end offer Savoy re-opening, W Hotel (Leicester Square), Four Seasons on Park Lane and the Corinthia

Occupancy growth is forecast in 2010 2 to 2.5%

Room Rate growth 3.5%

6,000 new rooms under construction by 2013

London - New Hotel Room Supply by Category 2010-2013fSource: TRI Hospitality Consulting 28. London What will the future bring?

35% of this supply will be 5* / Luxury hotels

Key focus on the City and the West End (in particular Westminster)

5* and Luxury market make for more attractive development propositions

Big overseas luxury brands seeking entry into London (ie Shangri-La at the Shard)

The future is looking good for top end hotels both for the construction and property sector and for tourists and business users but..

Some London hotels have much to learn from their counterparts around the world and need to raise their game in terms of quality and service standards

29. QUESTIONS