A more discerning clientele has, writes Darius Sanai, inspired hotel chains to invest more in the luxury end of the market.
On the face of it, the Punta Mita resort on a remote outcrop on Mexico's west coast and the Canary Wharf hotel in London have little in common except for extremely high prices. Punta Mita is a sybaritic spa resort in the wilderness, the other a crisp business hotel in the urban jungle.
Yet both are symbols of an unprecedented expansion of the hotel market. They are owned by the Canadian group, Four Seasons, but share few "chain hotel" physical similarities. The hotel in Mexico feels local, with woven bedcovers and complementary decor; the London hotel has stark, modern furniture and all the hi-tech gizmos an investment bank partner could dream of. They are part of a stratification of the booming high-end hotel scene that is transforming the business.
At the top end, Four Seasons, along with groups like Mandarin Oriental and Ritz Carlton, are at the forefront of the biggest changes in the luxury hotel scene since boutique hotels started appearing in the 1980s.
"People are spending more money on top-end hotels than ever before," says David Crowl, vice-president of sales and marketing for the Four Seasons Group. "There are lots more affluent people and companies and their sense of quality has risen. That applies not just to the rich but to everyone - people are far more discerning about where they stay."
Four Seasons, a listed company still headed by founder Isadore Sharp, will open 10 hotels in the next two years to add to its 48 locations. All will be at the top end - the average room rate is £360 ($1250) - to consolidate its reputation as the world's best.
Mandarin Oriental expanded its portfolio from 15 to 22 top-end hotels by buying the Rafael group of European boutique hotels for $140m, part of a stated aim of doubling its total room numbers to 10,000 in the next few years. And Ritz Carlton is expanding from 38 to 51 hotels in the next two years.
The three groups have all developed from individual luxury hotels, but none is privately owned, evidence of market consolidation. Guests often have the impression that they are staying in an exclusive, private hotel, but more often than not they are merely contributing to the earnings of a large corporation.
Ritz-Carlton, previously owned by American property tycoon W.B. Johnston, was bought by the Marriott Group in 1998, which in turn is controlled by the listed French food services company Sodexho.
Hong Kong-listed Mandarin Oriental is controlled by Jardine's. St Regis, another top-end hotel chain busy adding to its portfolio, has been bought by Starwood, the American group that owns Sheraton, Westin and W Hotels.
Maintaining the illusion of individuality is an art. Anita Heathcote, regional director of sales and marketing for Ritz-Carlton, says: "A large proportion of our guests are unaware we are part of Marriott and so far Marriott have presented the brand quite separately." The expansion is mainly linked to globalisation of the economy.
"The world economy is still very strong and the business travel market is constantly expanding," Heathcote says, "and people are very much more into experiencing the destination through hotels than ever before."
John Wallis, vice-president of global marketing for Chicago-based Hyatt Hotels, the last privately-owned five-star hotel chain, says: "We are seeing the major public companies commoditising the industry on a scale never seen before. And they are bringing their own set of priorities tied to shareholder value, and keeping costs down." He points to the continuing ownership by Bass of the InterContinental chain, and Starwood's creation of the biggest hotel group in the world from scratch in just five years. Wallis says that a return of 15 per cent, as demanded by shareholders, could be difficult to attain if the market tightens and that an 8 to 9 per cent return is attractive "if you take a long-term strategy and own the property as well as manage it,"which is what Hyatt and groups like Mandarin Oriental prefer.
In a high-end market which has two parts, the "normal" five-star hotels and the "luxury" brands, Hyatt is attempting to straddle both sides. Wallis says that Hyatt may not have concentrated enough on differentiating the brands.
Park Hyatt has a way to go before achieving its goal of being as cutting-edge as Ian Shrager's boutique hotels, but it is partly aiming at a new sector of the market: wealthy private individuals.
Jill Kluge, director of communications for Mandarin Oriental, says the leisure market is increasingly important for what were formerly business-hotel chains. A key indicator is the flourishing of marketing organisations like the Surrey-based Small Luxury Hotels of the World, whose membership - all individually owned hotels - has expanded from 102 in 1991 to 267 this year. Regional manager Katrin Holtkott says that they have been innundated with membership applications.
One of the key questions facing top-end hotel chains is how heavily to brand their properties, given inherent fears about the generic branded hotel chains that originally catalysed the rise of boutique properties.
Should they follow the example of British-based InterContinental and stick the brand name on everything from the legendary Carlton in Cannes to more prosaic concrete towers? Or should they play down the chain-nature of the hotel, like the small-but-expanding, American-based Rosewood group, which owns, among others, London's ultra-chic Lanesborough?
Lucinda Seamark, global brand director for InterContinental, believes uniformity of hotels is still the best way of managing revenue: "The market is very dynamic at the moment and the advantage [of being owned by Bass] is the major investment in the brands."
Seamark says that most of the chain's business comes from global business travellers booking through agents who prize brands, and their implicit uniformity, above anything else.
Richard Power, commercial director of the London-based chain RF Hotels, says that Four Seasons has pulled it off well. "A brand is very important for top travel agents, who need to be reassured that individuality still means very good service.
"Our philosophy is to put the individual hotel's name first, but we'd be disappointed if people didn't know there were other hotels in the group."
What of a possible economic downturn, though? Ritz-Carlton's Heathcote says she is not worried.
"Whenever there's a downturn luxury hotels are less affected. Our guests are people like company chairmen and they are the last ones to be reached by a recession."