PAR.08.01.17 Hôtel de Crillon facade
Hôtel de Crillon in Paris, France. Courtesy of Rosewood Hotels & Resorts

How Paris Luxury Hotels Are Persevering in the Wake of Terrorist Attacks

Jul 22, 2017

You didn’t need to see the red carpet to know the inauguration of the Hôtel de Crillon last month was a VIP affair. More than 400 longtime clients, press members, competitors, and personalities packed inside—Duval-Leroy champagne in one hand, fine smoked salmon blini in the other—for a preview of the grande dame’s multimillion-euro makeover before the official opening on July 5. Punctuating live jazz and the chorus of oohs and aahs, there was a quiet chatter, “Enfin! Paris is back.”

Occupying regal real estate on the Place de la Concorde, Hôtel de Crillon has been a Parisian landmark since 1909, drawing in the likes of Orson Welles and Madonna, who have stayed for weeks at a time over the years. The anticipated four-year renovation­ of this now Rosewood Hotel—encompassing a newly constructed lower-level skylighted pool, three restaurants, two Karl Lagerfeld–designed apartment suites, a spa and men’s grooming space, and the sixth-floor Bernstein suite that starts at 25,000 euros—comes only a year after the city’s other most talked about costly overhaul, the Ritz ­Paris. Overlapping clientele aside, it’s their mutual reentry into a radically transformed market, both in terms of competition and context, that connects them.

With 77 five-star properties, of which 10 have Palace status—a prestigious distinction created by the French Ministry of Tourism in 2010—Paris’s luxury hotels have never been denser. By 2018 seven luxury hotels will have opened and six will have considerably upgraded their services since 2000, including established leaders like the Four Seasons Hotel George V, Le Bristol, and the Hôtel Plaza Athénée. According to the Economic Observatory of Parisian Tourism, that’s a 47% increase in offerings and a 300% increase in rooms selling for over 800 euros per night: a significant capacity to fill, particularly in a travel climate that is fresh off two years of hardship.

An employee walks through the lobby of the La Réserve Hotel. Courtesy of Michael Reybier Hospitality 

“In 20 years of working in Paris, I’ve never seen a more disastrous year for hotels,” says La Réserve Paris general manager Didier Le Calvez. The impact of cancellations following the Charlie Hebdo attacks in January 2015 were modest for many hotels—nothing a few bankable private events couldn’t resolve. At the time, the incident appeared retaliatory and not necessarily indicative of sustained trouble. But by the end of 2015, following the Nov. 13 attacks on six sites in the city, it was clear there was an abiding threat that would deter tourists well through 2016.

For Le Bristol, business held out until June 2016 when the succession of the Nov. 13 attacks, the spring’s Seine-river flooding, and heavily publicized airline and taxi strikes pushed it into decline. What saved the hotel, says Catherine Hodoul-Baudry, director of sales and marketing, was a strong European client base (about 40%), a predominantly local clientele for their restaurants, and brisk business in events including film premieres and fashion shows, which compensated for a drop in leisure guests, including 30% fewer Americans. Le Meurice, a Dorchester Collection hotel, has offset a slump in occupancy by ramping up its teatime service, which is helmed by 31-year-old pastry chef Cédric Grolet (recently photographed with Katy Perry, who commissioned bespoke pastries for a private concert held on the hotel’s rooftop terrace).

Terrorism aside, other factors have hit Paris’s luxury tourism industry. “Friction between Qatar and other Middle Eastern nations—there are Palace properties owned by Qatar; some travelers won’t reserve there,” says Ivan Lartisien, cofounder of the upscale travel agency Grand Luxury. “And we have a socialist city government that doesn’t want to be seen defending the luxury industry. Instead it promotes mid-sector tourism.”

Recent troubles, however, like police shootings on the Champs-Élysées, have had only moderate consequences for bookings. “It’s sad, but people have resigned themselves to this new reality and keep traveling,” says Grand Luxury cofounder Rouslan Lartisien.

The 20- to 30-point decline in occupancy for five-star hotels in 2016 can be explained by capacity, the effects of which the industry is only just beginning to see, says Four Seasons Hotel George V general manager José Silva. “When one property would open, another would close for renovations. This is the first time the majority of us are simultaneously open for business.” That hasn’t deterred him from pumping 50 million euros into a brand-new spa (opening in 2018) and ongoing updates to suites: “The properties that do well don’t cut room rates; they reinvest.”

Whether it’s the reopening of legendary properties or the stymied expansion of populism with the election of President Emmanuel Macron, the capital’s image and tourism are rebounding. Competition may be tougher than ever, but affection for Paris is unequivocally a boon for business. “France is a country capable of rising up from the ashes,” says La Réserve’s Le Calvez. “If the ‘Macron effect’ continues, and Paris wins the bid to host the 2024 Summer Olympics, the city will be back on top by next year.”

The Best of Paris

As ranked by readers of Travel + Leisure

Le Bristol: Occupying a 19th-century building near the Élysée Palace, Hôtel Le Bristol has been a favorite of everyone from Grace Kelly to Leonardo ­DiCaprio since 1925.

La Réserve: Michel Reybier's 40-room Parisian escape feels like a hidden private mansion.

The Ritz: Paris's most iconic property features Michelin-star dining and Bar Hemingway, led by English barman Colin Field.

A version of this article appears in the Aug. 1, 2017 issue of Fortune with the headline "A Sanctuary From Terror." We’ve included affiliate links in this article. Click here to learn what those are.

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