The most admired luxury brand: luxury advanced experience first

Although it cannot be said that China's luxury consumption market has turned from prosperous to declining, it is an indisputable fact that Louis Vuitton closed three stores at once, and the decline in growth rate for two consecutive years has also explained certain problems. However, the Chinese market is always full of people who continue to strive forward. However, this time, they are not selling handbags and watches, but services and experiences. Marriott, InterContinental and their hotel industry partners are copying the expansion route of Louis Vuitton and Cartier several years ago, gaining a foothold in first-tier cities and advancing into second- and third-tier cities.

The first generation of Chinese luxury consumers, who have experienced a complete cycle of ups and downs with the industry, and the millennials who grew up in the online world and rose through full exchanges with the West, have jointly assumed the role of "buyers". Driven by their curiosity of "the world is so big, I want to see it", they take steps to go on a spontaneous trip and find a room with a view. Moreover, the wealthy and free Chinese are no longer willing to play the role of mere tourists. Following the same logic, Chinese money is attacking everywhere. While striving to realize the ideal of going from tenant to landlord, it has also stirred up the global high-end hotel M&A market.

Compared with material possessions that can be possessed forever in theory, experience will gradually penetrate into a person's speech, behavior, and even outlook on life and values ​​in a subtle way, and eventually become a part of oneself, truly realized for my use. From simple material possession to a full range of physical and mental experience, consumers are growing and maturing, and the definition of luxury goods is constantly advancing. As a result, China's luxury consumption has entered a new normal.

Luxury may only be related to money, but elegance is related to experience and knowledge.

This article was published in the February 2016 issue of New Fortune

New Fortune mentioned in its annual luxury goods research report in early 2014: "The Chinese luxury goods market has maintained rapid growth for many years. Although judging from consumer sentiment and the investment of major brands in the Chinese market, the Chinese luxury goods market will definitely continue to grow, it will sooner or later slow down and stabilize. By then, perhaps luxury groups will find other growth points, but more mature and rational consumers will definitely make China the real mainstay of the global luxury industry."

Only two years have passed, and Chinese consumers seem to be getting infinitely close to this goal.

Although it is not without precedent, Louis Vuitton's closing of three stores in Guangzhou, Harbin and Urumqi in mainland China in 2015 has indeed caused heated discussions in the industry and also sent out certain signals. It is reported that Louis Vuitton may close 20% of its stores in mainland China in 2016. Although this behavior can be interpreted as a structural adjustment of the channel to a certain extent, Lenovo Coach and TAG Heuer both closed their flagship stores in Hong Kong in the Year of the Goat, and Gucci also closed its first flagship store in the southwest at the beginning of 2016. This cannot help but make people worry that in the next one or two years, more luxury brands will follow their footsteps.

Such concerns are not without basis. Bain & Company's research report pointed out that due to the sluggish Chinese stock market and the government's anti-corruption and anti-extravagance efforts, luxury goods sales in Hong Kong and Macau fell by as much as 25%, making the entire Asian region experience its worst year. As a result, the global luxury goods market has unfortunately encountered its most difficult time since the 2009 financial crisis: sales revenue of retail goods such as luxury handbags and high-end clothing rose only slightly by 1 percentage point in 2015 to 253 billion euros.

Despite this, the luxury industry still saw an overall growth of around 5%. Among them, the hotel industry emerged as a dark horse, with an annual growth of 7%, far ahead of the top ten luxury sub-industries identified by Bain. Only luxury cars can compete with it.

For ordinary consumers, the most intuitive observation is that, in stark contrast to the closures of Louis Vuitton and Tag Heuer, luxury hotels are lining up to open in Beijing, Shanghai, Chengdu and Lijiang. This long list includes Ritz-Carlton, St.Regis, Four Seasons, Banyan Tree, Meliá, Fairmont, Aman, Waldorf Astoria... They have not only accelerated their expansion in China, but also extended their tentacles to second- and third-tier cities with the surge in the number of tourists.

Take InterContinental Hotels Group (IHG.NYSE) for example. As of the end of September 2015, it had 20 hotels under construction or planned in Greater China, accounting for nearly 40% of the global planned number. Hualuxe, an exclusive brand launched in 2012 and tailored for Chinese consumers, currently has 22 hotels under construction, and the ultimate goal is to increase the number to 100 within 20 years. Starwood Hotels & Resorts (HOT.NYSE), which has just been acquired by Marriott International (MAR.NSDQ), has as many as 44,000 luxury and ultra-high-end hotel rooms planned.

According to a survey by Digital Luxury Group, a Swiss luxury research and consulting agency, in 2015, Chinese consumers searched for luxury hotels online 39% more than the previous year; the Middle East followed closely behind with 16%; and the United States, where the overall hotel industry is the most mature, saw an increase of 7%. STR Global, a leading global hotel data company, monitored the Asian market in November 2015 and showed that although the occupancy rate of high-end hotels fell by 1.6%, the 86.4% figure was still ahead of other grades of hotels - in terms of the number of hotel rooms, China almost took up half of the entire Asia-Pacific region.

You should know that among the designated 318 conference venues determined by the Beijing Municipal Finance Bureau through public bidding in mid-2014, there is not a single five-star hotel. In order to survive, some hotels in Beijing even reduced their star rating or prices to increase their occupancy rate. The overall environment of the Chinese luxury goods market is also different from the previous two years. What exactly is the reason that InterContinental, Marriott, Hilton (HLT.NYSE), Shangri-La (00069.HK) and others have all started to conquer China, as if they are replicating the behavior of Louis Vuitton, Cartier and Hermès three to five years ago?

The new normal of luxury consumption

All signs indicate that InterContinental and its partners are betting on the advancement of luxury consumption in China.

From the perspective of sociology and psychology, as various socioeconomic factors tend to stabilize, including the "slow bull" economic growth and the increasing formation of various social classes, luxury consumption will move from explicit to implicit: on the one hand, from ostentatious consumption that demonstrates identity and status to a more rational pursuit of comfort and practicality; on the other hand, from the simple desire and possession of property rights to the emphasis on physical and mental experience.

Obviously, whether it is InterContinental and Marriott, or Shangri-La and Mandarin Oriental (MDO.LSE), which have the advantage of being from the same source, they have all determined that the definition of living standards of China's wealthy class has to some extent completed or is close to completing this evolution.

In 2004, the "Regulations on the Administration of Foreign Investment in Commercial Fields" was officially implemented, and luxury brands with the "pass" for independent expansion began to openly explore the Chinese market. In 2008, despite the turbulent global economy, China still became the world's second largest luxury market with a consumption of US$8.6 billion. Today, China's first generation of luxury consumers have experienced a complete cycle of ups and downs with the industry, and have developed their own preferences and established their own tastes in the process of buying and buying. The scale of consumption exceeds that of Europe and the United States, and consumer psychology and consumer behavior are also in the process of catching up with Europe and the United States.

From a broader perspective, the entire consumer market is undergoing a transformation from "property rights" to "experience". It is a foregone conclusion that China has become the second largest exporter of tourism. According to a survey by UnionPay, Chinese tourists are shifting from group tours to independent tours. More importantly, compared with the previous shopping-focused itineraries, more and more tourists are beginning to pursue a balance between vacation and leisure and shopping. They are willing to spend more time experiencing the local history, culture and art atmosphere, and are more willing to spend an afternoon in a hotel and enjoy more hotel facilities and services. During the National Day Golden Week in 2015, China's overall retail transaction volume increased by 30% over the previous year, and restaurant and hotel consumption increased by 52%.

Compared with simple material possession, the biggest feature of experiential consumption is that it is one-time and non-repeatable. It is this more private and rare characteristic that made it popular among the wealthy class in Europe and the United States at an earlier time. The new normal of luxury consumption in China has long been the norm in the European and American markets where consumer behavior is more mature.

According to McKinsey's research, the growth rate of consumer spending on luxury services has even exceeded that of luxury goods. "20% of luxury consumers said they have increased their spending on luxury experiences, while only 13% of consumers spent more on luxury goods." As an important branch of luxury experience, hotels are undoubtedly one of the most direct beneficiaries. According to research by market research company Transparency, the overall size of the global high-end hotel market was approximately US$148 billion in 2014, and will grow to nearly US$200 billion by 2021, maintaining a 4% annual compound growth rate in seven years. In 2015, the revenue growth rate of luxury hotels reached 9%, which is four times that of physical consumption.

In addition to increasingly mature consumers, another major driver of the growing strength of experiential consumption, including hotels, is the millennial generation, who were born at the same time as computers and grew up with the Internet. Whether in China or in Europe and the United States, they are becoming a new force in luxury consumption that cannot be ignored. Compared with their parents, they usually have received higher education at home and abroad, have more complex consumption habits, and also have better appreciation and higher requirements for the spiritual world.

Tao Dong, Managing Director and Chief Economist for Asia at Credit Suisse, pointed out in his article "China's New Generation of Consumers": "These people (the post-90s) have never seen a time of material scarcity since they were born, so they have no awareness of preparing for rainy days. Their parents are their social security. They are more confident, pay more attention to individual experience, and pursue quality of life. As the new generation of consumers gradually become the main force of Chinese consumption, the Chinese economy is also entering a new era. Personalized consumption and experiential consumption are believed to become the trend of personal consumption in China. Looking at the crowded tourist attractions during the long holidays, we can see that China's tourism industry still has great potential to be tapped in market segmentation and high added value."

This is good news for the hotel industry, both at home and abroad. Bill Marriott, who has served as chairman of Marriott for more than 40 years, once pointed out in an interview with the Wall Street Journal that he hopes that the next 200 new luxury hotels and lifestyle hotels under his umbrella will be equipped with new flat-screen TVs, wooden floors and lively bars to replace those musty bedspreads and shaggy carpets. "We have to be cool. In the next four years, 60% of our business targets will be millennials."

In the eyes of millennials, hedonism is no longer a derogatory term, but a positive and optimistic attitude towards life. They are more willing to spend money to enjoy life, and of course they love to travel more. Surveys in Europe and the United States show that they already account for half of hotel bookings. Not only that, compared with the 45-year-old population, millennials travel twice as much for business, and are more willing to spend money on room service and take advantage of business trips to enjoy hotel facilities. A survey by Chase Card Services shows that nearly half of millennials regard staying in a hotel as "enjoying luxurious services." In contrast, among the 50-67 generation, as many as three-quarters of people will regard budget as more important.

As more and more mature luxury consumers gather the well-educated "rational consumption" generation, it is reasonable that the demand for experiential consumption will become hotter. In fact, many luxury brand manufacturers have already noticed this trend and have begun to adjust their strategies. A typical example is the cross-border hotel real estate of luxury brands (Table 1).

As early as 1997, Italian leather goods brand Ferragamo opened its first Lungarno Hotel in Florence, becoming the first luxury brand to enter the hotel industry. To date, the brand has 9 hotels. Since then, luxury brands have continued to follow up across the border, and Armani, Bulgari, Versace, Lamborghini, etc. have already owned hotels with their own brands as their signatures. The latest to join this list is French crystal manufacturer Baccarat, which opened its first eponymous hotel in Manhattan, New York in the spring of 2015. This 114-room hotel redefines luxury: the hotel is decorated with wolfskin armchairs, silk-lined walls, 17 custom chandeliers and 15,000 Baccarat crystal vessels, with prices starting at $899 per night.

When it comes to expanding the Chinese market, it is the supercar brand Lamborghini that has been leading the way, opening its first Tonino Lamborghini Boutique Hotel in Suzhou in 2012, and five more in 2015. Together with the new hotel that will open in Hangzhou in 2016, it now has a total of seven branded hotels, all located in China.

Following it, Armani, Versace and Bulgari also came to China to explore the high-end hotel market, and Bulgari will open two hotels in Shanghai and Beijing in 2016 and 2017. In addition, with the major international chain hotels that have already deployed their forces, this high-end market is bound to be quite lively in the future.

From landlord to tenant, stirring up mergers and acquisitions

In order to cater to Chinese tourists traveling around the world, even high-end hotels that do not operate in China have started from the details. In addition to the more common acceptance of UnionPay payment and hiring Chinese-speaking employees, they also provide Chinese snacks for breakfast, equip guest rooms with kettles, and even provide Chinese newspapers according to the habits of Chinese tourists. For chain brands that have already established a foothold in the Chinese market, Chinese mobile apps have long become standard.

However, the Chinese who have the leisure and money are obviously no longer satisfied with being just tourists and tenants. In early 2015, Italian investment tycoon Andrea Bonomi gave up the bid for the acquisition of French holiday hotel group Club Med (CMIP.PA). The French Financial Market Authority (AMF) announced that the consortium led by Fosun International (00656.HK) had successfully made a tender offer for the latter, and Fosun's long acquisition since May 2013 was finally settled.

As restrictions on Chinese companies' overseas investment were relaxed, with the maximum limit raised from US$100 million to US$1 billion, and no government approval was required, Chinese companies began to move in full force, with hotels becoming one of the most sought-after targets (Table 2).

Although Jin Jiang International, which has made successive moves, mainly owns economy hotels, it has successfully become the fifth largest hotel group in the world in terms of the number of guest rooms after acquiring France's Groupe du Louvre and China's Vienna Hotel Group and Plateno Group (formerly 7 Days Resorts).

In stark contrast to Jinjiang International, which is an industry insider, the targets of insurance funds going overseas are all high-end properties. The Sheraton Hotel in Australia, which was acquired by Sunshine Insurance Group at the end of 2014, has long been ranked first in the list of five-star hotels in Australia. In January 2015, the occupancy rate was as high as 98.4%, 10 percentage points higher than its peers. The acquisition of the Baccarat Hotel in Manhattan, New York, was a rare move that the hotel was sold before it opened, and the purchase price of $2 million per room also set a new record. In addition, Anbang Insurance took over the flagship Waldorf Hotel, one of the famous landmarks in Manhattan, New York, from Hilton, which also made Chinese insurance funds the most popular "landlord" in the hotel industry.

It is worth mentioning that in these acquisitions, the insurance funds, as outsiders, acquired the hotel's real estate properties, while the actual operation and management were still handed over to the hotel brand owners. This not only coincides with the asset-light trend that has been prevalent in the hotel industry for many years, but also meets the insurance funds' multiple demands such as hedging against the risk of domestic economic downturn, diversifying their own investment assets, and achieving stable long-term cash flow.

Data shows that in 2015, Chinese capital spent about $5 billion on the global hotel industry, making China the largest buyer in the hotel industry after the United States and the Middle East. Just a few years ago, China was not even in the top ten. It doesn't take too long to turn the calendar back. When news of high-end hotels being put on the market comes out, a number of buyers, including Middle Eastern sovereign funds, American private equity funds and real estate trusts, will become extremely active. Now Chinese insurance funds have also become one of the powerful competitors.

Because of this, when Starwood was rumored to be selling its entire hotel because its performance was inferior to that of its peers, three Chinese companies expressed their intention to acquire it. Of course, the final result is now very clear. Marriott Group "swallowed" Starwood at a cost of US$12.2 billion, creating the world's largest hotel group. This is the largest merger and acquisition case in the hotel industry since Blackstone, one of the world's largest private equity funds, privatized Hilton Group at a sky-high price of US$26 billion in 2007.

Following the marriage of Marriott and Starwood, Accor, the dominant French hotel group in Europe, also announced that it would acquire FRHI Hotels & Resorts, the parent company of hotel brands such as Fairmont, Raffles and Swissotel, for more than US$2.8 billion. With this move, it surpassed Choice Hotels International in terms of the number of rooms and became the sixth largest hotel group in the world.

Although the scale of the transaction is not comparable between Accor's acquisition of FRHI and Marriott's acquisition of Starwood, the two have the same purpose: to strengthen its presence in the US market, to create a more upscale image, and to expand its scale and achieve synergy. For example, the Fairmont and Raffles brands under FRHI are both luxury hotels, and their history can be traced back a hundred years. The only one with a century-old history in the top camp is Ritz-Carlton; the remaining Swissotel is also an ultra-high-end brand, and Accor originally only had two top brands - Sofitel and Pullman. The acquisition of FRHI has allowed Accor to become a seed player in the global luxury hotel market with a total of more than 500 top hotels.

As for the scale effect, under the light asset model advocated by hotels, seeking growth and efficiency through scale has become an inevitable trend - the larger the scale, the more hotel brands there are for developers and hotel owners to choose from, the greater the opportunity to charge more management fees, and have more loyal customers, which ultimately means a larger market share.

Based on this logic, according to data from JLL's Hotels & Hospitality Group, in the first half of 2015, the global hotel industry M&A transaction volume reached $42 billion, an increase of 55% over the same period last year. If only the two orders from Marriott and Accor in the second half of the year are included, the annual transaction volume has reached $57 billion (see figure). Not to mention, Blackstone, which made huge profits by relisting Hilton in 2013, made another move in September 2015 and acquired Strategic Hotel & Resorts (BEE.NYSE), a real estate trust with 17 hotels in the United States and one luxury hotel in Germany, for $6 billion.

In the view of industry insiders, frequent mergers and acquisitions indicate that competition in the entire hotel industry, especially in high-end hotels, is becoming increasingly fierce, and this phenomenon will continue in the next two to three years.

Compared with other industries, the hotel industry is highly fragmented. In the luxury category alone, single hotels without chain brands account for up to 56% of the market share, and there are ample opportunities for mergers and acquisitions in the market. Even brands that have already formed chain trends, such as Four Seasons, have been reported to be acquisition targets several times in the past few years because they are not affiliated with any large group. In the 2016 New Fortune's ninth ranking of the most respected luxury brands in the Chinese capital circle, Four Seasons Hotels will knock Ritz-Carlton, which has won the first place in the hotel category for three consecutive years, off the top spot, and half of the hotels on the list are independent brands and do not belong to any large integrated group (Table 3).

After the marriage of Marriott and Starwood, the world's largest hotel group now has 8 luxury brands and 8 ultra-high-end brands, with a total of 483 luxury hotels and 1,839 ultra-high-end hotels. This data seems not far from realizing the prediction that half of the world's 1,953 luxury hotels will be owned by three or four large groups (Table 4).

Technology vs. Services: Which One Takes the Lead?

Another driving force behind the rise in hotel mergers and acquisitions is online travel agents (OTAs) and sharing economy startups represented by Airbnb. Compared with the traditional hotel industry, both are typical technology-oriented. In addition to the fluctuations of the economic cycle, the upgrading and updating of technology has become the biggest "disruption" and promoter of the hotel industry. The rapid development of Expedia and Airbnb has stirred up the traditional hotel industry, which is jokingly described as "still in the Stone Age." Even the bigwigs in the hotel industry have reached a consensus that the technology-oriented represented by Expedia and Airbnb have become their biggest common competitor.

In the United States, OTAs account for about 10% of the market share, while in Europe, this proportion has reached 20%; the number of rooms provided by Airbnb, a travel home rental community that focuses on homestays and family hotels, exceeds the sum of Marriott and Starwood; the existence of price comparison websites such as Priceline makes room prices more transparent. All these facts reveal a message that while these technology-oriented ones are eroding the market share of traditional hotels, they are also snatching their pricing power to a certain extent. Therefore, traditional hotels, feeling tremendous pressure, can only expand their scale through mergers and acquisitions to reduce the high cost of acquiring new customers, and the larger the scale, the greater their bargaining chips in negotiations with OTAs - OTA's commission rate is usually 15%-20%, or even higher.

From another perspective, for a long time in the past, consumers could only judge a hotel's service and quality based on its brand and star rating. However, the emergence of social media such as TripAdvisor has provided non-chain and even independent hotels with an open, equal and transparent display platform. This will weaken the advantages of branded hotels to a certain extent, thereby reducing developers' concerns and allowing them to include more independent hotels in their plans, thereby indirectly leading to more intense competition in the hotel industry.

What exacerbates the sense of crisis among the bigwigs in the traditional hotel industry is the speed of development of these technology-oriented companies. They have not only grown into Silicon Valley upstarts with amazing efficiency, but also extended their tentacles to various related fields. Expedia, the world's largest online accommodation sales platform, has successively acquired competitors Orbitz, Travelocity and Airbnb's senior brother Homeaway in one year. Before the acquisition, Homeaway had already opened up a business segment specifically for high-end customers, with more than 800 high-end listings in 40 countries; Priceline, which is engaged in online travel services, not only took over the restaurant review website OpenTable, but also successively incorporated start-ups Kayak and Buuteeq that belong to the same tourism-related industry; TripAdvisor is no longer just a simple travel review website, but also has its own reservation system and has successively acquired four online house rental websites; Airbnb has set its sights on corporate customers. In New York, hotel practitioners who felt a huge threat from Airbnb gathered in front of City Hall at the end of 2015 to protest that some homestay owners on the Airbnb platform illegally converted their houses into family hotels, affecting the business of traditional hotels.

Under the aggressive momentum of Silicon Valley's new upstarts, traditional hotels have also begun to fight back in their own way. Marriott, as gentle as it is, has adopted the most moderate approach. It will establish a partnership with TripAdvisor and leverage the latter's platform to obtain more information about guests in order to improve the efficiency of its own channel platform. Accor, as radical as it is, has decided to open its booking platform to other independent hotels, trying to turn itself into an OTA. As clever as Hyatt, it simply invested in Airbnb's competitor Onefinestay. Coincidentally, Hilton, Hyatt, Starwood and InterContinental have successively established partnerships with Uber, another typical representative of the sharing economy.

In addition, among the many coping strategies of traditional hotels, there is one common one: a large increase in the budget for technology infrastructure, and the desire to equip the hotel with technological elements. This move can also win the hearts of millennials who grew up with the Internet. Marriott's mobile app allows guests to check in and out directly, and has prepared wireless charging equipment in the guest rooms; Hilton Group's new luxury hotel brand Conrad has turned the pictures it posted on Instagram into booking links; Aloft, now owned by Marriott, tried mobile room cards in two hotels in New York and San Francisco in 2015, and plans to fully promote it in 2016.

At the same time, more and more hotels are starting to sell goods other than traditional services. Hilton, Marriott and Hyatt have all opened online stores to sell all kinds of home furnishings from bubble baths to beds, maximizing profits through private-label sales. And Aloft has signed a contract with the American home interior retailer Design Within Reach to display and sell their furniture in 20 hotels in the United States, including armchairs, chandeliers, etc., with the price list placed within the reach of guests in the room.

Looking ahead to 2016, the technology trend in the hotel industry is bound to grow stronger. After all, technology has always played a very important role in the growth and development of the hotel industry. Back then, the many technological innovations brought about by the Industrial Revolution made long-distance travel possible, which led to a geometric increase in tourists and immigrants between Europe and the United States. The hotel industry thus achieved its first great prosperity - at that time, staying in a hotel itself was a luxury, because when the word "hotel" first appeared in the United States in the 18th century, it referred to "an inn or tavern serving upper-class customers."

As technology advances, the definition of luxury hotels is also evolving. In the 1970s and 1980s, the standard was a grand lobby and glass-lined elevators. In the 1980s, the standard became a room full of crystal chandeliers, marble and artwork. Thanks to technological advancements, the acceptable waiting time for guests to check in has been reduced from 4 minutes in the 1980s to just 20 seconds today. It is expected that within 10 years, using a smartphone to check in and open the door will become the new standard for half of the hotels.

However, consumers can never simply define a hotel full of high-tech elements as a luxury hotel. From the perspective of material standards, gorgeous and tasteful decoration, high staff-guest ratio, humanized facilities, diverse and high-quality catering, comfortable and high-end bedding - these are all indispensable elements of luxury hotels. However, its highest standard is always only one, that is, to provide guests with detailed and differentiated services anytime and anywhere - do things their way. Compared with the more easily satisfied material luxury, today's consumers undoubtedly pay more and more attention to personal experience and every detail during their stay.

Therefore, the significance of the existence of technological elements is to enable hotels to keep pace with the times, keep up with the changing pace of most consumers' behavior habits, and meet their needs as much as possible. The highest level of service is to meet consumers' needs before they realize their needs. And technology is always only for the purpose of improving services. From this perspective, it is technology that has promoted the service upgrade of hotels and even the entire luxury industry to a certain extent. ■

Luxury: Standard rooms start at $995 per night

In 1829, a hotel called Tremont opened in Boston. It was considered the first modern high-end hotel in the United States because it was equipped with indoor toilets and door locks, and provided a la carte menus. In 2004, the 8-star Emirates Palace, which was said to surpass the Burj Al Arab in Dubai, opened. The standard of high-end hotels was refreshed again. Architectural design, decoration style, management services, and employee quality all became indispensable conditions. And these conditions were eventually transformed into a quantifiable standard: the average nightly room rate (ADR).

According to the average nightly room rate, STR Global roughly divides hotels into six levels: luxury, ultra-high-end, high-end, mid-range, mid-range and economy. The first two are regarded as luxury hotels in a broad sense, that is, five-star hotels in the usual sense, accounting for 18% of the entire hotel industry (see figure). Among them, the luxury hotels at the top of the pyramid naturally have the highest room rates and the smallest number, with less than 2,000 in the world. Among them are brands such as Ritz-Carlton, Sofitel and Waldorf, which belong to large chain groups, as well as high-end and relatively independent hotel brands such as Mandarin Oriental, Peninsula, Aman and Four Seasons. This is a highly fragmented field, and the five largest hotel groups currently only hold 20% of the market share.

According to the latest survey by Luxury Daily, 7 of the 10 most expensive hotels in the United States are in New York, where land is extremely expensive. The most expensive hotels are the Ritz-Carlton and Mandarin Oriental, which are across the street from Central Park. The lowest price for a double room is US$995 per night, while the cheapest double room in the other five hotels costs US$785 per night.