Sun, Dec 07, 2008 page12

• French luxury hotels feel the chill of a cool economy

  • By Lizzy Davies / THE GUARDIAN
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  Farooq frowned from behind his polished reception desk and whipped up his waistcoat to reveal a belly hanging over a tightly fastened leather belt.

  “Now we’ve got the crisis,” he said, his laughter echoing loudly around the sepulchral lounge. “I’m wearing it two notches further in.”

  As chief receptionist of a gleaming four-star hotel in one of Paris’ grandest, most expensive locations, he has good reason to be worried about the economic downturn — though, like any smart businessman, he is reluctant to admit it.

  

  The Eiffel Tower is seen on Tuesday in Paris. As more tourists tighten their belts, Paris’ luxury hotels are feeling the pinch.

  PHOTO: AP

  “You can smell it, you can feel it. Thank God it’s not hit us so hard yet, but it could,” he said.

  Squeezed by shrinking demand from both foreign and French clients, the Parisian tourism industry is beginning to feel the pinch. And nowhere is it hurting more than in the opulent suites and elegant piano bars of the city’s luxury hotels.

  New figures released this week show that October profits for the capital’s four-star establishments — the highest category hotel is a four-star luxury — were down 16.2 percent on last year — the second month in a row that the industry has made a loss.

  Fewer people — both tourists and businessmen — are making reservations at the higher end of the market, while room prices have been slashed to levels not seen for years.

  “We haven’t seen such a severe slowdown since 2003,” said Samuel Couteleau, who researched the figures for accountants Deloitte.

  The survival tactic of the large, business-orientated hotels seems to be clear: Cut prices until customers feel they are getting a good deal. Travel savings Web sites such as Expedia.fr are awash with big-name hotels offering discounts — far more than last year, industry experts say.

  But this method, which has seen the average price of a luxury hotel room fall to 296 euros (US$375), is dismissed as short-sighted and irresponsible by others who are either too small or too reliant on their exclusive image to offer themselves for less.

  The Hotel Villa d’Estrees, tucked away in a quiet side street in the Latin Quarter, is both of these things. Its manager, Yann Chevance, refuses to give in to pressure to lower prices, saying it “destabilizes” the market.

  But yesterday eight of his 21 rooms had no guests and he is worried about what is to come.

  “So far we’ve been a little protected because we’re very niche and our prices aren’t so huge,” he said, sitting on a plush velvet sofa in the empty, low-lit lounge.

  “But the British and the Americans are hesitant, the Japanese too. Everyone is worried about what next year will bring,” he said.

  If there is one sector that can afford to be a little optimistic it is Paris’ budget hotels, so long derided as small, pokey and undesirable by countless guidebooks. Their owners are beginning to think their time might have finally come.

  “So far the [financial] crisis hasn’t really affected us,” said Salah, receptionist at the Hotel Eugenie, sandwiched on a busy Latin Quarter thoroughfare between a Greek kebab joint and a souvenir shop selling Eiffel Tower boxershorts. “This weekend we’re almost completely full.”
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