Savoy hotel MD: We can’t be complacent with boom in rival luxury openings

The managing director of London’s Savoy hotel has said it faces a battle for guests and top talent amid a boom in rival luxury hospitality openings.

 

Franck Arnold told The Caterer the 136-year-old hotel could not risk becoming “complacent” and needed to stay “relevant” with hundreds of high-end rooms due to open in London over the next few years.

 

“We’ve got company, we’re never bored in London. Even if they don’t say it, hoteliers are concerned about the number of new openings coming into play in the city,” he said.

 

Last month saw the launch of the Chancery Rosewood hotel, a £1b redevelopment of the former US embassy building on Grosvenor Square where prices range from around £1,400 a night for a room to upwards of £18,000 a night for a larger suite.

 

Next year’s openings will include the UK debut of California’s Auberge Resorts Collection with a 102-room luxury hotel in Mayfair while the 100-room Waldorf Astoria London Admiralty Arch will open at the end of the Mall opposite Buckingham Palace with restaurants from chefs Clare Smyth and Daniel Boulud.

 

Arnold, who is also regional vice-president at the Savoy, said this placed added pressure on existing hotels to stop skilled staff being poached by new entrants. The Savoy has cut its staff turnover from 40% in 2023 to less than 25% through initiatives such as investing over £300,000 in its staff restaurant and developing its company culture.

 

“After six months’ experience at the Savoy, a bartender can apply anywhere in London and will ask for more money and responsibilities. That is always going to be the case; London is ultra-competitive. We just need to do the best possible job to retain our top talents,” he added.

 

“We’ve had managers and team members who have left but then we’ve welcomed them back. It’s not only about the money, it’s about this sense of belonging.”

 

In the face of rising competition, many of London’s long-standing hotels are revamping their rooms and restaurants to compete. Claridge’s has completed a seven-year renovation to add 72 new suites and its first spa, while the Ritz London is undergoing a £300m development to add around 50 extra bedrooms to the 118-year-old hotel.

 

The Savoy is set to complete a renovation of 118 rooms and suites this autumn while an overhaul of a further 145 rooms will begin in January. Around 80 rooms are expected to be out of use during the next phase.

 

Arnold added: “What is concerning is for maybe the next two or three years we may see a stagnation of demand and increase of the highest supply of hotels in our central London neighbourhood. So, we need to still be able to say, the Savoy is 136 years of age but still have something very relevant to offer.

 

“For a hotel like ours the challenge is remaining relevant, but also not being complacent. That would be one of the worst things we could do.”

 

Pre-tax losses at the Savoy, a wholly owned subsidiary of Breezeroad Limited, widened from £17.5m in 2023 to £19.6m in 2024 due to room closures and interest payable to wider group undertakings. Revenue also dropped from £63.3m to £59.7m.

 

Occupancy was 58% in 2024, down from 59% in 2023, as many of the rooms were unavailable due to renovations.

 

Arnold said room rates had stabilised over the past year following a post-pandemic boom but cost of living pressures meant many consumers were still reluctant to spend extra money.

 

“I think everyone’s waiting until the Budget in November. I would say [the Savoy] is going to benefit from a natural compression because we won’t have all our rooms available [due to the refurbishment] so we will more than likely maintain the prices we have,” he added.

 

"We will have higher prices at certain times, but we may also see lower prices at others. There will be some good deals to be had."

 

New launches at the Savoy

The hotel has also overhauled part of its food and beverage offer in a bid to appeal to a wider audience. This saw the Thames Foyer restaurant relaunched as all-day venue Gallery last November (pictured below) and the opening of two retail outlets, Scoff – a dedicated scone shop – and a florist.