The Savoy, the 121-year-old London hotel that has hosted Elizabeth Taylor and Claude Monet, may add to strains on the city’s luxury guesthouses when it reopens next April following British hospitality’s most expensive renovation.
After last year’s collapse of Lehman Brothers Holdings Inc sparked a slump in business travel, the belated and overbudget completion of the Savoy’s makeover will dump 268 luxury rooms into a market suffering a dearth of bankers and corporate guests.
Even with the Savoy shut, revenue at London’s upscale hotels this year has declined the most since the Sars outbreak in 2003, according to STR Global, which tracks the industry.
‘Luxury properties are going to feel it when the Savoy opens,’ said STR Global analyst Konstanze Auernheimer on Tuesday. ‘In these market conditions, when it is already tough for everyone, it has been a blessing for rivals to have it out of action.’
Savoy manager Kiaran Macdonald said he’s counting on an economic recovery by the time the property reopens, almost a year later than planned.
The delays to restoration work meant the hotel missed the worst of the market’s decline, although the final cost to owner Prince Alwaleed bin Talal will be ‘a lot higher’ than £120 million (S$277 million), Mr Macdonald said, compared with an original budget of £100 million. Continue reading
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