Paris Palaces Face Gloomy Future

(Bloomberg) -- As the capital of the world’s No. 1 tourist destination, Paris has no shortage of hotels for all tastes and wallets, from the dumpy dive to the pillared palace, where a single night can set you back as much as 30,000 euros ($35,000).

But coronavirus and the ensuing lockdown have been hard on the City of Lights. The fanciest hotels previously pulled in at least 80% of their guests from outside Europe, a route now closed because of international travel restrictions. As a result, most of the ultra-luxury hotels went into months-long hibernation, from which they will only begin to emerge at the end of this month.

Paris boasts 12 high-end hotels that are classified as palaces, a cut above the mere 5-star status. It’s a designation bestowed upon the houses by Atout France, the agency charged with promoting the country as a tourist destination abroad.

Palace hotels include storied names like the Plaza Athenee, the Le Bristol and the Hotel de Crillon. Only the smallest of the deluxe dozen — La Reserve with its 40 rooms — has been open since May 5.

That brief monopoly on the most exclusive hotel segment has blessed La Reserve with occupancy rates of close to 80%, according to General Manager Romain Meiran. But when the rest of the pack come back, life will be tougher for everyone, he says.

“What we can do is adapt ourselves to a difficult situation,” Meiran says. That includes new initiatives like delivery service from its restaurant and special dinner offers to pull in customers.

Christophe Laure, chairman of the UMIH Prestige hotel industry group, estimates revenue will drop by at least 40% this year. Tourism is crucial to France, representing 7% of its economy and accounting for more than 2 million jobs.

There’s hope to claw back some business later this year, with the French Open at Roland-Garros set to start on Sept. 21 and the Fashion Week a week later. Official delegations from foreign countries meeting with the President at the Elysee --a 3-minute walk-- should also make a comeback, said Luca Allegri, who runs the Le Bristol palace hotel.

Allegri is taking no chances at Le Bristol, with its geranium-dripping balconies. Each suitcase entering the premises will pass through a disinfection gateway, there will be a 24-hour gap between new room occupancy to allow for deep cleans, and a staff nurse will now be on location each day of the week.

When the 600 staff and hopefully some guests return on Sept. 1, business will likely be “very challenging, very difficult,” Allegri said, though the hotel won’t raise prices to make up for lost business.

Others are taking an even dimmer view on their prospects. Over at the Shangri-La hotel located close to the Eiffel tower, the 100 rooms and suites will remain closed for longer: the reopening was just postponed by a month to Oct. 1.

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