Five Star And Far Out

Marc Hediger knows the luxury-travel experience very well. As a senior vice president for the high-end Shangri-La Hotels and Resorts, he has spent plenty of time in posh accommodations in France, where his company is converting a former Bonaparte family mansion into its first Paris hotel. Yet these days, as head of the group's development team, Hediger is much more likely to be found treading muddy construction sites in Inner Mongolia, where the Hong Kong-based company is building several new projects. "The last few months, I have been to so many places with names I can't pronounce—locations I'd never heard of until we built a hotel there," he says.

He's not the only luxury-accommodations executive reaching for the atlas. Remote destinations where once only grubby backpackers dared venture are now drawing business travelers accustomed to wireless access and pillow menus. "The economic map of the world is being redrawn," says Gebhard Rainer, Hyatt's managing director in Paris, who oversees Europe, Africa and the Middle East. "And the five-star business-travel industry follows this." He counts outsourcing and high petroleum prices, which increase disposable income locally and lure multinational companies, as the primary forces creating the fresh demand for luxury hotels in decidedly unluxurious destinations. The Ritz-Carlton Hotel Co. has found that the bankers, lawyers and corporate executives that form its client base have begun adding to their itineraries economically booming but rough locales like Shenzhen in southern China, a manufacturing powerhouse—and the home of a soon-to-open Ritz-Carlton. "It's about identifying where our customers are traveling," says Mark DeCocinis, the company's Hong Kong-based regional vice president.

The stratospheric cost of oil has certainly hastened the arrival of high-class hotels in Central Asia, especially in cities with petroleum industries. "The biggest change in the region has been the price of oil, which has driven prosperity," says Rainer, who has worked on hotel projects there since the mid-1990s. Like Almaty, Tbilsi and Baku—which just a few years ago could offer only bare-bones lodging—are buzzing with several new international hotels. The gracious Park Hyatt in Baku features a spa with a solarium. Hyatt has about a half-dozen major projects in the works in Central Asia, aimed not only at the growing numbers of foreign visitors but also at the locals getting rich from oil.

One of the biggest challenges for luxury-hotel companies in emerging markets is living up to the legend. "It is important that we keep the promise of consistent service," says Ritz-Carlton's DeCocinis, who intimates that customers in developing countries actually have higher expectations than those in the developed world: they want the usual amenities plus tight security. "Road warriors need everything to work: plugs, light switches, Internet. If you sleep at a Shangri-La, you want this service," says Hediger, who often works with local contractors who don't necessarily know the protocol. Weaknesses in the local infrastructure can require creative problem-solving. Delivery of a glass wall ordered for a Shangri-La hotel going up in Ningbo, China, was delayed from another province, threatening to set back construction for weeks. To stay on schedule, Hediger did something he never would have dreamed of doing in Paris: he allowed interior work to begin before the exterior had been completed, despite the risk of water damage.

Staffing these operations remains a major hurdle. Boomtowns usually suffer chronic labor shortages, and the workers they do hire are not often familiar with the details of luxury-travel services. In China, where five-star hotels have mushroomed ahead of this summer's Olympic Games in Beijing, training has been a major challenge. In the next five years, Shangri-La plans to double its hotels in China to 50, including three in Inner Mongolia. At the company's standard rate of two staff per room, it will need to hire some 25,000 employees in China alone. To fill that many jobs, Shangri-La has brought in qualified workers from other parts of China, as well as from outside the country. It has also opened its own school near Beijing to train potential hotel workers. "In these emerging markets, local labor pools usually have to be developed," says Rainer. "Sometimes new staff need to be taught basics like grooming and hygiene." Creating a culture of luxury where there was none is not for the dainty.