The most expensive hotels in the world cater to a tough, albeit well-heeled, crowd.
Rap stars, tycoons, royalty and CEOs know the difference between the sublime and the merely impressive. What's more, if the champagne is not properly chilled, the thread count on the sheets inadequate, the luggage not brought up with alacrity or the morning coffee served anything less than piping hot, they may take their Black cards and Gucci shoes elsewhere.
At a certain level--and price point--a hotel room ceases to be simply a place to sleep and shower in a strange city and, instead, becomes a physical manifestation of one's status and power. Like buying a $100,000 wristwatch, the point is not to tell time better but to show the world you can afford it. Nevertheless, as with a pricey watch, if you are going to be shelling out that kind of coin for the best, you expect your money's worth.
When a hotel charges four-figures per night, it is acutely aware of the inherent quid pro quo involved: Excellent service in exchange for exorbitant rates. They know that pampering at the highest level is what keeps the VIPs coming back. But what most non-VIPs don't know is that all too often the supermodels, Hollywood producers or Saudi princes in the best suites aren't paying the full rate--if they're paying anything at all.
Why is that? Richard Engle, a travel consultant at luxury-travel company TravelWizard.com in California, compares it with the airlines, which through different discount offers and affinity groups can often give the best customers lower rates. "When we're thinking about what we can get the hotel for, we never think in terms of rack rate since we almost never have to pay it," he says.
It is also possible that a hotel's management will upgrade celebrities or other luminaries at their own discretion--sometimes even waiving all charges completely. "In the world of big, high-profile stars, money doesn't apply because they bring publicity to the hotel," says Engle. "I wouldn't be surprised if Oprah didn't pay anything" when she travels.
But one doesn't need to be a billionaire or a talk show host to get the star treatment. In Las Vegas, for example, at The Mansion at The MGM Grand, a subsidiary of Kirk Kerkorian's MGM Mirage, most guests may never know that the official rack rate starts at $5,000 per night because rooms are almost exclusively reserved for the casino's highest rollers, who stay for free.
Yet, it is possible to be an ordinary mortal and still get a great room for less. Thanks to affinity cards, corporate discounts, airline miles and other programs, there are many ways to shave hundreds of dollars per night off the cost of even the most expensive rooms. Of course, not every hotel offers such discounts. But, depending on who you are, you or your personal assistant may be able to work out a more favorable rate. One thing that doesn't change, thank goodness--even if the price does come down--is the quality of the service.
In compiling the 2005 list of the "World's Most Expensive Hotels," we looked at the standard rate for a double room during high season at the most luxurious international hotels. Like last year's list, U.S. properties take first and last place. But last year's least expensive finalist, Little Palm Island in Florida, costs $100 more per night this year. This increase can be explained by rising energy costs--but also by the fact that, as the economy recovers, there is heightened demand and the travel industry is able to charge higher prices.
In the U.S. alone, the lodging industry is projected to earn an estimated $16.2 billion in profit in 2004 across all market segments, from luxury to economy. This represents an increase of almost 27% over 2003's $12.8 billion in profit, says Ricardo Anders, director of Business Travel Development at Smith Travel Research in Tennessee. International data is harder to obtain because participation rates are lower, but it's safe to say that profits from the international lodging industry are rising, as well.
So what is the point of offering rooms at such high prices if so many people avoid paying the full rates? For one thing, just as some passengers will still pay the full cost of a first-class airline ticket, the luxury hotels on our list famously attract hotel guests who are so rich (or traveling on an expense account) that money is, literally, no object. For another, these hotels know that the higher the official rate is for their rooms, the more exclusive the clientele will be. As with the best tax shelters, such benefits are pretty much available only to those who can afford them in the first place.
Sharp-eyed readers will note that there are different rate packages available for the hotels on our list--some are all-inclusive, others are not. We included only those hotels that had the highest daily rates. For example, one couldn't stay at Frégate Island Private in the Seychelles, which charges $2,482 per couple per night, and eat anywhere else--because there is nowhere else to go on the island. (The island is reportedly owned by German billionaire Otto Happel, who ranks 219 on the 2005 list of the World's Richest People with a fortune estimated at $2.7 billion.)
Obviously, adding the cost of three meals per day per couple would lift a number of hotels onto our list that were excluded. The Hotel Cipriani in Venice, for example, which has a standard room rate of €815 ($1,065)--including breakfast--just misses inclusion. (Deluxe rooms start around $1,700.) However, if we were to factor in meals and other costs, it is conceivable that the daily price of a stay there would easily double.
So, if you're planning a big trip and are looking to spend handsomely--or possibly just want to figure out which of these pricey properties can provide the best deal--click the slideshow to see our list of the world's most expensive hotels.
