The Weak Dollar? Some Don't Worry

LONDON, Oct. 11, 2007— -- A flurry of activity swirled about the concierge desk at the Ritz Hotel on a recent Tuesday morning. With the U.S. dollar at its weakest point in a generation against the British pound and London prices astronomical, this must have something to do with finding a favorable rate of exchange for visiting Americans or a place for bargain shopping.

But no, the buzz is all about last-minute requests for tickets to a tour of nearby Buckingham Palace, the final day it will be open to the public until next year. And guests are saying, "Don't worry about the price."

That's in sharp contrast to travel industry surveys, including one recently from Cheaptickets.com. For the first time they show Americans increasingly choosing destinations other than Great Britain because of the weak dollar and high prices.

But at the Ritz, "It's business as usual," says Michael De Cozar, the concierge, who is in his 35th year of catering to the needs (and whims) of the hotel's guests. And some business: A standard room is $720 a night and the most expensive suite is $10,000 a night (breakfast not included).

Rates at other London luxury hotels are similar. But even in this time of an uncertain U.S. economy and the high cost of going abroad, there are Americans willing to pay for luxury and pampering and famous brands.

"Certainly," says Stephen Boxall, the Ritz's general manager, "we are concerned about the pound." How much higher can hotel prices go? "They are reaching a plateau where they tend to flatten."

The 133-room Ritz sits next to Green Park on Piccadilly. Now family owned, it was opened by the legendary Cesar Ritz in 1906. Its original French Chateau design and Louis XVI interiors have been completely restored.

Forty-five percent of the guests are Americans. And if the price has had an effect, says Boxall, it is that "Americans used to stay here three or four times a year, now, more people are traveling once a year," but the percentage of Americans sleeping at the Ritz each night hasn't changed; they are still willing to spend.

Would he ever cut prices if there's a slump in business?

"We would not discount prices -- that would cheapen the property. We would rather leave it vacant." He argues that U.S. luxury hotels did almost the same, keeping prices high after the travel collapse following 9/11 and reaped financial rewards once occupancy rates returned to normal.

But at $720 a night, what do you get? "I think it's value for money," says Boxall, pointing to a two-to-one staff-to-guest ratio, a Rolls Royce at the ready to ferry guests to other parts of London, six kinds of pillows and absolute privacy.

Even Boxall admits, though, that at those prices the Ritz may have to offer more in the future. "We may add a butler service, packing and unpacking services and other pampering."

But demand is expected to remain strong despite stratospheric prices. The Connaught, a jewel-like luxury hotel, is closed for renovation and the Savoy will close at the end of the year for refurbishment. And London is now flooded with "Nouveau Russkis," newly-rich Russians for whom no price is too high as long as it has a luxury brand name attached.

Back at the concierge desk, De Cozar, in his immaculate uniform, faces another challenge. Dozens of customers are calling from the United States wanting tickets for the Led Zeppelin reunion and to the 2012 London Olympic Games. Those are tickets that haven't even been printed for games in venues that haven't even been built. How does he get them?

"It's who you know, your contacts, calling in old favors and yes, money," says De Cozar with a confident smile.

What's the one request that sticks most in his mind? "Organizing a helicopter for a guest," says De Cozar. But isn't that routine, a helicopter to ferry a hotel guest? "Oh no," says De Cozar, "not for a ride. He wanted to buy one and we got it for him the same day."

Now that's value for a certain kind of money.