Why people pay £20k a night to stay in a hotel mega suite
They’re vast, luxurious and cater for the 1 per cent, but how often are they filled and can those prices really be justified? By Mark C O’Flaherty
Just who pays £20,000 a night for a suite in a hotel? And what are they getting for that? The answer to the first question is simple: very rich people. The answer to the second is: whatever they want. There’ll be a fully stocked wine fridge, a kitchen and dining room.
The reason people are willing to pay a fortune is straightforward – if you’re in the 1 per cent and don’t have a house in the city you’re visiting (because a house is an asset not a tax deduction), you want the utmost luxury that replicates the dynamic of a mansion for yourself and staff.
The Grand Manor House Wing
These people aren’t pondering sleeping pods – they want a penthouse and a butler
at Rosewood London costs £20,000 a night, has seven bedrooms and its own postcode. That price is fairly standard. The new Ritz-Carlton New York NoMad opened a £20,500-a-night suite in February. “It has a private wellness room and media room, plus a 200 sq ft dressing room,” explains its GM, Bastian Germer. “It also includes five culinary offerings throughout the day, all curated by Michelin star-winning chef José Andrés.”
To those of us agog at inflation, the growth in the mega-suite market may seem bizarre, but there’s a reason behind it. Marc Speichert, chief commercial officer of the Four Seasons brand, says we’ll see $68trillion of family fortunes pass from boomers to millennial offspring in the next five years, creating a 50 per cent increase in HNWIs (high-networth individuals). These people aren’t pondering sleeping pods when they travel – they want bragging rights over a penthouse with a butler. “Our Signature Suites offer residential-style living,” says Vlad Doronin, chairman and chief executive of the Aman Group. “Guests feel as if they are staying in the comfort of an exceptional home.” The average Aman guest doesn’t register the cost of a suite because they feel it represents value. These are people who are happy to pay in excess of £50,000 for an Hermès bag, despite the design existing in countless units, because they believe that’s what it’s worth. Cost is reassurance. A hotel doesn’t have to justify anything, because it’s just what the market dictates as acceptable.
The business model around super suites is fascinating. Back in 2018, the Mark on the Upper East Side in Manhattan launched a 10,000 sq ft penthouse with a rack rate of £61,000. Occupancy cruised at a steady 50 per cent, yet it achieved its goal. If you have 10 rooms and an additional suite that has the footprint of the other 10 rooms, and there are 50 hotels in the neighbourhood, each with the equivalent of those fairly similar standard 10 rooms, then it’s the mega suite that makes the money. Even if you keep that penthouse empty half the time, it’s still turning a profit the rest of the year.
There’s another reason why these suites exist: buzz. Only Elon Musk would take his mother to the suite at the Rosewood for a birthday treat, but you might have read about it somewhere and so decide to take your mother to the David Hockney-themed £140 afternoon tea downstairs with a glass of Dom Pérignon. Suites equal stories. Who wouldn’t want to stay in the room at the Hassler in the Italian capital where Audrey Hepburn lived while filming Roman Holiday, or the one in the same building that Karl Lagerfeld used to stay in? It’s about alignment.
A rock star might stay in a suite for four nights on tour, but Middle Eastern royalty might stay for a couple of months. The mega suite is a marketing tool as well as a money spinner. If 50 magazines write about a lavish new penthouse, that equates to an equivalent of £650,000 worth of advertising space – so it’s also about making the news.