Hotel guests willing to splurge on the best rooms in the house are about to have many more options. Andrea Petersen and Global Brand Leader for St. Regis, Luxury Collection and W Hotels Worldwide Paul James explain what's behind the rising demand. Photo: Starwood Hotels.
It used to be enough for luxury hotels to offer one spectacular presidential suite. Now, they're finding too many guests who want to play president.
Suites are booming. With occupancy levels and room rates rising, luxury hotels are doing quite well. A growing number of wealthy, globe-trotting visitors and the increasing popularity of multigenerational travel are spurring a flurry of activity in the most spacious and swankiest spaces.
Rosewood Hotels & Resorts is increasing the percentage of suites at its resort properties to more than 40% of total rooms, up from around 30%, because of strong demand, company president Radha Arora says. At Mandarin Oriental, Barcelona, the suites have an occupancy rate of about 80%, higher than the hotel's regular rooms. Now the property is adding a building next door: 17 of the 22 new rooms there will be suites. Peninsula Hotels and Starwood Hotels & Resorts Worldwide Inc. 's luxury St. Regis brand are upping the number of suites as they build new hotels and renovate existing ones.

Lap of Luxury

Rosewood Hotels and Resorts (5); Mandarin Oriental
There's also activity at the very top of the suite food chain. Having just one grand suite with a range of much smaller ones just doesn't cut it anymore. After the Maybourne Hotel Group built the Apartment, a 3,000-square-foot, two-bedroom suite with a wraparound terrace and views of London's Mayfair neighborhood, at the Connaught hotel, it couldn't keep up with demand for the $23,900-a-night space.
"We found ourselves having to disappoint people" because it was full, Maybourne chief executive Stephen Alden says. Some guests jumped to competitors. So the company soon built two more comparable "feature" suites, the Library suite and the Terrace suite. "It is part of sustaining the business over the long term," Mr. Alden says.
Even though suites don't tend to be booked as often as regular rooms, they are usually very profitable. Besides the sometimes eye-popping rates, suite guests tend to stay longer at a property, return more frequently and spend a lot of money on everything from spa treatments to room service and catered parties.
The St. Regis Abu Dhabi connects two towers and has a five-seat cinema. St. Regis Hotels & Resorts
And people now generally pay the listed rates. In the past, hotels often used their top suites as a special giveaway to groups that booked big meetings or as an upgrade to loyal customers. Hotels would rarely charge full price for their presidential suites, says Robert Mandelbaum, director of research information services at PKF Hospitality Research. "The opposite is true now because of the high occupancy of the hotels," he says.
Indeed, hotels say they want to keep those top suites exclusive.
"These suites need to be your sacred cow," says Thomas Steinhauer, general manager of the new Four Seasons in Orlando, Fla. The hotel, slated to open in August, will have 68 suites among its 444 abodes, including a royal suite that can expand into a nine-bedroom space.
Luxury hotels overall have rebounded from the depths of the recession. The occupancy rate at luxury hotels reached 74.6% in 2013, up from 63.7% in 2009. The average daily rate was $290.64 in 2013, up from $243.88 in 2009, according to data from STR Inc.
The Abu Dhabi Suite at the St. Regis Abu Dhabi St. Regis Hotels & Resorts
Hotel companies say the demand for suites is being fueled in part by rising concerns about privacy. Increasingly, hotels are creating entire wings or floors that can be locked off and accessed by a separate entrance. These are coveted by everyone from Hollywood A-listers trying to avoid paparazzi to families traveling with large entourages.
In February, the Ritz-Carlton, Dallas created a new "privacy wing," a 5,500-square-foot space with a private entrance that encompasses the hotel's top suite, two smaller suites and two other regular rooms. (Price tag: $7,500 a night.) "This gives you the capability of a secure area within the hotel for celebrities, royalty, diplomats that are traveling with a nanny, private chef, security," general manager Roberto van Geenen says.
The top suites are being re-imagined, too. The stereotype of the grand suite with vast, empty space and ornate chandeliers is increasingly out of date.
In the past, "it was almost like a regal waiting room," says Paul James, global brand leader for Starwood's St. Regis, Luxury Collection and W brands. "You walked in and you had lots of obvious earmarks of luxury, the gilding, the bronze work, the marble." Now, the largest suites "should feel more like a high-end home," he says. That may mean just as much space, but used more practically, with more connecting rooms, additional bathrooms and larger wardrobes, he says.
The Connaught in London had such demand for its top suite that it built two more grand suites. Maybourne Hotel Group
Suites are also being reconfigured with more flexibility, with hotels able to add and subtract bedrooms based on guest demand. That can boost occupancy and protect hotels from too-big or too-small suites lying fallow.
The Rosewood London actually calls its six top suites House Suites. The largest, the 6,295-square-foot Grand Manor House Wing, has a private street entrance and elevator—and its own postal code. The suite, with six marble bathrooms, three living rooms and two walk-in closets, features funky materials such as a horsehair ceiling and alpaca wool wall tiles. The suite costs $41,500 a night.
Indeed, hotels say they are increasingly competing with lavish private rental homes. The Trump International Hotel & Tower Toronto sits near the Air Canada Centre and Rogers Centre, pro sports venues that host large concerts. But the hotel found itself losing celebrities to private homes. The hotel plans in June to launch four residential-style suites on its 36th floor with a private entrance and elevator. "We're going to make the guest feel like they aren't in a hotel," general manager Mickael Damelincourt says.
While added perks like butler service and the use of hotel cars have long been offered to suite guests, hotels are adding more distinctive and elaborate services for their suites to further set them apart from regular rooms—and to make guests feel better about those high prices. Las Ventanas al Paraiso, a Rosewood property in San José del Cabo, Mexico, opened 12 new stand-alone villas in December with private pools and beaches.
The Connaught in London Maybourne Hotel Group
The $4,500 starting price tag includes a host of extra touches: massages on arrival, a chef-led ceviche class, tequila tastings and s'mores on the beach. When guests arrive, they are introduced to the housekeeper, bartender, pool person and butler in the style of "Downton Abbey," hotel manager Daniel Scott says. Guests of the hotel's soon-to-open top suite will also receive a private fireworks show.
The Las Ventanas villas won over frequent guest Gary Friedman, chairman and chief executive of Restoration Hardware, the furniture and housewares company. He and his girlfriend have stayed in one twice, the last time a weekend getaway recently.
They have enjoyed the complimentary massages, piña colada-making lessons and their beach—personalized each day with a message in the sand. When he stays in a regular room, Mr. Friedman often runs into friends at the pool or restaurant. But on his last villa visit, Mr. Friedman says he only left the villa once. "Sometimes you don't want to run into friends. You just want to chill," he says.