Am I in Heaven, or Am I in My Hotel?

High-end business and leisure travelers are demanding superluxury, and hotels around the world are responding

by Reena Jana

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Superior hotel amenities once brought to mind elegant spa facilities or a private beach. But over the past five years, the world's most luxurious lodgings are increasingly upping the ante. Helipads, undersea restaurants, and expanses of gold leaf that stretch farther than in any castle are some of the details that exclusive hotels are offering to woo jet-setting business travelers and wealthy tourists.

"The lodging industry is very healthy at the moment," says Scott D. Berman of PriceWaterhouseCoopers' Hospitality & Leisure division. "The luxury hotel portfolios are driving a great deal of that success worldwide." In the U.S. alone, hotel industry profits are expected to rise to $29.7 billion by 2007.

That's up from an estimated $25.2 billion in 2006, according to a Jan. 23, 2006, presentation by PriceWaterhouse Coopers researcher Bjorn Hanson. And new hotel construction is up too, largely to meet increased demand. In 2006, there were approximately 127,708 room starts, up from 77,549 in 2005.

Pushing the Design Envelope

Berman points to emerging economies, such as China (site of the 2008 Beijing Olympics, which will no doubt attract legions of tourists) and India as areas of the biggest surges. "The growth in hotels in these countries reflects the growth of their overall economies," Berman says.

In these Asian locales, many luxury hotel properties are pushing the envelope in terms of sumptuous design details and adventurous architecture to attract high-end tourists and business travelers. Nestled beside the Great Wall of China at Badaling, for example, The Commune, which opened in 2002, is a collection of sophisticated homes designed by 12 leading Asian architects who were each given a budget of $1 million. Collectively, these chic dwellings make up a stunning new concept for a luxury "hotel."

The property includes the Furniture House, featuring the laminated plywood typically used for modular furniture, by Shigeru Ban, the Japanese architect most famous for the paper houses he designed for refugees of the Kobe earthquake.

Location, Location, Location

China's Yung Ho Chang created the Split House, which takes the idea of a boxy dwelling, splits it in two, and spreads it out like a fan. The Commune is currently operated as a boutique hotel by Germany luxury hotel group Kempinski, which is responsible for an upcoming expansion. Scheduled for completion in 2010, the updated Commune will feature a total of 21 homes (including replications of the originals).

One draw that will remain untouched: the Commune's private walking trails, which trace sections of the Great Wall, a breathtaking—and hard to beat—backdrop.

In India, a record number of foreigners entered the nation in 2005, 3.92 million, up 19% from the previous year. India's Tourism Ministry predicts that the number of tourist entries will increase to 5 million by 2007 and rise to 10 million by 2010, creating ample opportunity for international hoteliers to profit.

And Then There's Dubai

Hilton (HLT), Starwood Hotels & Resorts Worldwide (HOT), Intercontinental Hotels Group (IHG), and Marriott (MAR) have all recently announced expansion of their offerings in India.

The Middle East is also quickly becoming a site of spectacular hotel design firsts and broken records, led by the United Arab Emirates. Dubai's ruler, Sheikh Mohammed Bin Rashid Al Makhtoum, also the Vice-President and Prime Minister of the UAE and president of the Dubai Development & Investment Authority (DDIA), hopes to attract 15 million tourists in 2010, up from 5.24 million in 2003.

Why 2010? Sources such as The Economist predict that Dubai's known oil reserves will be tapped by that year. Dubai is racing to pump up new industries, such as tourism.