“Less is more,” so, famously, said the German architect Ludwig Mies van der Rohe. But New York’s Waldorf Astoria Hotel has just bet $2 billion van der Rohe was wrong. That, in fact, more is less.
The Waldorf reopened last year after a radical $2 billion refurbishment. Previously, a hospitality giant with over 1,400 rooms, the hotel now offers just 375.
The restoration has been meticulous, blending Art Deco grandeur with modern amenities. The Daily Telegraph comments, “reincarnation blends past and present, with an 1893 clock, Cole Porter’s Steinway and nightly jazz filling the sultry bar.” So, same building, same square footage. But over a thousand less rooms to sell. From a financial point of view, how does that work?
As it turns out, rather well.
National Geographic notes, rooms now “start at 570 square feet. They span across 11 guest room categories and five specialty suites, all with spacious closets and beverage bars.”
And bigger rooms command a higher rack rate – Waldorf’s new room prices often exceed $1,200 and can reach $2,000 during peak periods.
With less guests, the hotel’s staff can deliver a far more personalised experience. One that not only boosts guest satisfaction but enhances the Waldorf’s reputation as the epitome of luxury.
In addition to the rooms, the property now also has 372 condos, allowing the Waldorf to unlock a lucrative new revenue stream. These ‘branded residences’ are sold or rented at premium prices, attracting a high-end clientele that values privacy and the cachet of living at a legendary Big Apple address.
The Waldorf’s strategy is part of a continuing worldwide trend among luxury hotel groups. Major brands are scaling down room numbers, prioritising exclusivity, and launching branded residences to drive profitability.
Marriott – another market leader in the sector – has around 300 branded residential projects in its open and pipeline portfolio across brands like Ritz-Carlton, St. Regis, and W Hotels.
Marriott International’s Chief Development Officer Dana Jacobsohn told Hospitality Investor, ‘We know branded residential is so popular because it helps capitalise a project and it is easier to finance. Hotels are expensive to build, financing is challenging and it takes time for the return on investment, compared with selling a residence.”
So,1,400 rooms vs 375? Sorry, Ludvig – as far as the Waldorf’s concerned – more was less.