Inside LVMH’s new Paris hotel

To receive the Vogue Business newsletter, sign up here. From the cognac to the spa products, Cheval Blanc’s first urban hotel is opening in Paris on the Seine next week, filled with LVMH-owned brands. A dedicated guest elevator transports guests directly from the hotel to the adjacent LVMH-owned Samaritaine department store. A sprawling Dior-branded spa offers exclusive treatments and a fragrance. Rooms include amenities designed by Dior perfumer-creator François Demachy. Windows in the hotel lobby are dedicated to jewellery houses including Tiffany, Chaumet and Bulgari, while a cellar features very rare bottles of Cheval Blanc, Château d'Yquem, Dom Pérignon, Hennessy. Staff uniforms are designed by Patou artistic director Guillaume Henry and artwork is curated by the team of Fondation Louis Vuitton (to wit, a horse-shaped sculpture by Frank Gehry, the architect of the Fondation, sits across the elevators). Peter Marino, the architect behind numerous LVMH stores, designed the hotel with the spirit of a Parisian apartment in mind. The new hotel, opening at a difficult time for Paris tourism, gives a glimpse into how the luxury conglomerate is appealing to high-net worth clients interested in “experiential luxury,” and leveraging its existing brands to do so. More Cheval Blanc hotels are planned, and sitting under the same umbrella of the Belmond Hotels, they could be a signifier of LVMH’s plans for the $3.2 billion acquisition of the luxury hotel group it made in 2019. The brands could also benefit: Dior Perfumes and Cosmetics and the Moët Hennessy brands will have direct-to-consumer relationships through the hotel, something beauty and wine and spirit brands tend to lack. “Albeit being a small brand — it’s our fifth hotel — the strength of Cheval Blanc is to benefit from all the know-hows of the group,” Cheval Blanc CEO Olivier Lefebvre tells Vogue Business. “Our business is experiences. In a way, hospitality is a lab at the service of luxury,” says Lefebvre. (For 72 rooms and suites, four restaurants and a spa, Cheval Blanc Paris employs 400.) “The talent of our teams is to personalise and detect the expectations and desires of our guests in terms of speed of service, level of formality... Training is essential. We have teams from other Cheval Blanc hotels here.” Cheval Blanc sits in LVMH’s “other activities” division, alongside Cipriani Hotel owner Belmond Last year, Andrea Guerra was appointed CEO of a new entity within the conglomerate, LVMH Hospitality Excellence, which oversees Cheval Blanc and Belmond. “[Belmond]’s heritage, its innovative services, its excellence in execution and its entrepreneurship resonates well with the values of the group and is complementary to our own Cheval Blanc maisons and the Bulgari hotels activities,” LVMH chairman and CEO Bernard Arnault said when the acquisition was announced in December 2018. (A Bulgari hotel is set to open on Paris’s Avenue George V.) The rationale for investing in experiential luxury is still relevant despite the difficult tourist landscape according to Mario Ortelli, managing director of Ortelli & Co, a strategy advisory company for luxury goods. This week, the EU recommended to its member states to ban non-essential visitors coming from the US following a rise in the country’s Covid-19 cases. The American clientele is a key market for Cheval Blanc, especially in Saint Barthélemy and St Tropez. It’s betting on the American visitors in Paris, too. “The demand growth for experiential luxury is a secular trend, driven by the new generation. In my view, when the Covid restrictions will go away, the spending will significantly bounce back,” Ortelli says. “We have already seen this summer when restrictions lifted in high end locations, the top hotels sold out with very high net per diem. Bernard Arnault is never betting on the next week. He’s betting on the long term. I believe experiential luxury is a good bet for him and his investors.” Occupancy rate in Paris’s luxury hotels in the first seven months of 2021 was 14.3 per cent, a steep decline compared to 72.8 per cent in 2019, according to MKG data; July saw an uptick to 43 per cent. August was also strong, according to François Delahaye, general manager of Hotel Plaza Athénée, driven by Middle Easterns and Americans. Tourist flows from the US and the Middle East are expected to fully recover by 2023, according to Anita Balchandani, McKinsey & Company partner EMEA and apparel, fashion & luxury leader. She predicts China, a typically significant tourist region for France, remains a challenge, with flows to and from China expected to recover to 80 per cent of 2019 levels by 2024. Cheval Blanc also opens in a competitive market for luxury hotels in Paris, with historical landmarks including Ritz, Crillon and Lutetia that all reopened in the last five years after major renovations, while boutique hotels are mushrooming. While expansion is LVMH’s long-term goal for the hospitality brand, Cheval Blanc’s project in London’s Mayfair is in limbo, “for many reasons including Covid”, Lefebvre says. Projects in the Seychelles and Beverly Hills are going ahead. Lefebvre estimates Beverly Hills is expected to open by 2026. Cheval Blanc Paris intends to draw Parisians at its four restaurants and ultra exclusive fitness club featuring a 30-metre pool. With only 72 keys, the hotel is less reliant on tourism flows than larger hotels, says Lefebvre. Prices start at €1,150 and are not disclosed for the 1,000-square-metre suite on the top floors. Before Covid, LVMH typically booked around 1,250 hotel rooms for its guests for Paris Fashion Week across Paris (the group reserved only 250 for fashion week in September 2020), according to Hotel Plaza Athénée’s Delahaye. The group now has its own place to put them in when Paris Fashion Week kicks off on 27 September. It wouldn’t be surprising either to see houses host events at the hotel. “It is an essential [opening] for us because we are a French brand so being in Paris is a consecration,” Lefebvre says. Comments, questions or feedback? Email us at feedback@voguebusiness.com. More from this author: The Long View by Vogue Business: Luxury’s new sales professionals The new threat to China’s luxury boom: What to know Prada adds to luxury industry’s recovery as sales jump

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