One of the world’s top tourism destinations (Spain) and one of the most visited cities in the world (Madrid), have initially presented me with a challenge of understanding why they are not considered luxury and what they actually lack to be associated with luxury.
Many of us when when traveling use rating websites just to have a quick overview of the hotels in the respective destination, without necessarily checking ratings (or a positioning resulted from such ratings), as well as to get a general idea of the rates but also type of properties- independent or part of a chain.
In a simple search on Madrid, we have consulted four such platforms and based on location (central) and ranking (5 stars) a list of 23 ”five star” hotels downtown Madrid, has been generated with less than half of them actually ‘branded’ (part of a chain, whether a GDS affiliation, managed / operated or franchised), with 6 properties being closed due to lack of demand caused by the Covid-19 pandemic.
Browsing through the properties, I realised that the majority of the five-star ranked hotels are missing luxury essentials such as a swimming pool / Spa, minimal room size or parking (directly on the premises or guaranteed nearby access), twice daily housekeeping service. Some of these hotels would not even have 24 hour Front Office / Concierge services, after 11 pm, the Front Desk being ”taken over” by the security of the hotel, who is also a doorman and a Concierge.
Over 70% of the ”five star” hotels identified would feature nightly rates under EUR 150 with the rest quoting nightly rates under EUR 300. Other ”luxury basics” for being awarded a five-star ranking, which are non-negotiable in other countries include security, air-conditioning to heat and cool automatically, a compulsory selection of pillows, both artificial (foam) and natural (feather / down).
For the night of May 5th 2021, for a standard single room (king bed), Four Seasons Hotel Madrid (officially opened September 2020) proposes a rate of EUR 650 (all taxes included) and the newly opened Mandarin Oriental Ritz Madrid features a rate of EUR 825 (all taxes included). Rooms are fairly large and similar in size and rates do not include breakfast. Both properties have luxury Spas with indoor heated swimming pools.
Officially confirmed upcoming luxury hotel openings for 2021-2022 include Rosewood Villa Magna, JW Marriott, EDITION Madrid, W Madrid. InterContinental Madrid is currently undergoing partial renovations. Nevertheless, I cannot help but wonder what rates these properties would be able to achieve regardless of the pandemic context. Madrid has never had the five star hotel rates matching Barcelona, let alone the rates of Milan, Rome, Paris or London.
To better understand Madrid’s positioning, one must also look at other luxury sectors, especially retail – fashion, accessories, jewellery, watches and home collections (furniture). While the major international luxury fashion brands do have a presence in Madrid, most of them operate smaller sized stores and many of them reflecting an older retail design concept. Also, they would have a rather limited product categories selection, all indicating the limited potential of the market, both for locals and foreign travellers – the overview reflects the pre-pandemic context.
A relevant example is the Four Seasons Hotel Madrid, a complex renovation and reconstruction project combining several heritage buildings which was initiated in 2017. Besides the hotel, development also includes private residences and a 15.000 sqm luxury shopping gallery, Galeria Canalejas .
Galeria Canalejas (15.000 sqm) is 50% owned by OHL and Mark Scheinberg. Although the shopping gallery had been promoted and publicised long before the hotel became operational (before the pandemic) the commercial space remains empty – a sign of incompetence and lack of experience, with Hermes as the only brand which had taken up a small space with a limited selection of product categories. Hermes operates a second store downtown Madrid, twice as large and with a bigger selection of products.
It was obvious from the very beginning that such a large retail space can only have a few mono-brand stores, and instead an experienced department store or concept store operator – not just for fashion, but also watches and jewellery. For instance the three major luxury watches group own and operated multi-brand retail concepts, with their brands represented in corners or shop-in-shops. It was obvious that the luxury brands already present with a mono-brand store in Madrid would not open a second store or a brand new store, such an investment not being feasible because of the limited potential of the market.
The project has been co-developed (co-financed) by Mark Scheinberg, Founder of Mohari Hospitality and real estate developer OHL Desarrollos. Mention must be made that Four Seasons Hotels & Resorts only operates the hotel and residences under a long term third party agreement, without having any financial participation.
Mark Scheinberg founded Pokerstars which he later sold, but he remains involved in the gambling business. In Galeria Canalejas he is a presently a silent investor, holding a 50% stake. OHL Dessarollos has been in charge with the marketing and the lease of the shopping gallery. OHL Dessarrollos is co-developing together with Hinduja Group, the Old War Office project in London (Whitehall) which will house a Raffles Hotel.
Madrid needs a hype luxury lifestyle destination with a high footfall, not a ”luxury retail museum”. Fashion brands may be rather seeking space for innovative pop-ups or installations (seasonal collections, capsule collections or artistic collaborations), art galleries, gourmet retail, etc.
Ironically, right across the street from the Four Seasons Hotel Madrid is one of the most spectacular heritage buildings of Madrid which houses Real Casino de Madrid, (founded in 1836) which operates as a private club, with a two Michelin star restaurant by Chef Paco Roncero (including a superb roof-top).
There are several lavish events halls (up to 1200 attendees), an indoor heated pool, gym, sauna & hammam, a private cinema. Membership is priced at EUR 12,000, as a one time fee, and members also have access to two 18-hole golf courses, Golf Olivar de la Hinojosa and El Encín Golf
Oliver Petcu in Madrid
More from OPPORTUNITIES
Dorchester Collection’s Beverly Hills Hotel collaborates with Koio on a luxury footwear collection featuring the iconic Martinique Banana Leaf Print. Koio …
Selfridges has dived deeper into the rental market with the debut of Selfridges Rental online, moving it from an exclusively store-based …
Max Mara will stage its next cruise collection on Ischia, the sister island of Capri, located in Italy's Bay of …