The appetite for luxury goods and experience continued to grow in 2023, as the sector rebuffed the headwinds that constrained other parts of the economy. Diamonds shone brightly at auction, artwork painted a brighter picture as the year went on; unlikely partnerships were made while old gastronomic favourites parted ways. This was the shape of luxury in 2023.
Billion-pound hotels arrive in London
A luxury-hotel boom defined the hospitality scene in London in 2023. The Peninsula London’s arrival in Grosvenor Place in October topped a year dominated by five star, $1 billion-pound hotels where nightly rates rarely dip below £1,000, the biggest surge in openings since the 2012 Olympics, according to property information company CoStar.
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Other high-profile launches included the £1.5 billion Raffles London at The OWO, the spectacular reimagining of the Old War Offices building in Whitehall, which opened after an eight-year development. Sanjay Hinduja told Spear’s the London outpost represented an important ‘legacy’ project for the family, saying: ‘We wanted to create a legacy in London. That was the dream of my father and his brothers – to leave a legacy behind.’
G.P. Hinduja & Family won the Entrepreneur of the Year award at the Spear’s Awards 2023, and were represented on the night by Shalini Hinduja.
The $1 billion hotel trend is set to continue into 2024 and beyond. Six Senses at The Whiteley in Queensway is due to launch next summer, while the doors of the prestigious Mandarin Oriental Mayfair on Hanover Square are slated to open in early 2024. The Chancery Rosewood on the former site of the US Embassy in Grosvenor Square is to open in 2025, as is the Waldorf Astoria Admiralty Arch.
Meanwhile, not to be outdone, London grandes dames Claridge’s and the Dorchester had extensive makeovers, ready to vie with the slew of sparkling new openings. The Coalin Finn-helmed Claridge’s Restaurant opened its doors in September, bringing a menu of refined British classics. It was last known as Claridge’s Restaurant more than 20 years ago.
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The Dorchester had its biggest refurb in three decades with the iconic London hotel given a glamourous refresh by French interior designer Pierre-Yves Rochon and his studio PYR. Public spaces, including the spectacle Promenade, were reinvented with a blend of 21st-century luxury that retained the hotel’s ‘British spirit’. The rooms’ interiors were inspired by an English garden, adorned pale leaf green and rose fog pink, and heather blue and lemon yellow. The makeover followed the opening of its spa in April and the refurb continues, with penthouses and suites slated for later in 2024.
Why London and why now? Many of these ultra-luxe hotels were in the pipeline pre-2020 but the pandemic has accelerated the pivot to high-end travel.
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Fflur Roberts, Head of Luxury Goods at Euromonitor says: ‘The pandemic has left many consumers yearning for real-life experiences and normalised routines. The trend transcends industries particularly those manifesting in luxury travel and hospitality. This is giving further opportunity for luxury fashion brands in the UK and in London in particular to side-step into this area by venturing into luxury hospitality with branded cafés, restaurants, food and wine pop-ups and of course luxury hotels, spas, wellness and residents.
‘This also comes at a time where marked increased spending on experiences and the “experiential” luxury category has been noted, with the likes of travel and hospitality being of particular note as more brands move towards the “lifestyle” sector.’
Global luxury experts at Virtuoso forecast travellers will be more interested in visiting far-flung destinations and having once-in-a-lifetime experiences than ever before in 2024, with ‘exclusive-use experiences,’ like private jets, yachts, and villas top of the list.
Art market’s (semi) revival and London clings onto to its crown
The art market had a subdued start to the year thanks largely to high interest rates that put the market into reverse: auction sales by Christie’s, Sotheby’s and Phillips were down 18.2 per cent in the first half of the year, according to Anders Petterson, founder of analysis firm to ArtTactic.
Collector confidence appeared to pick up in the second half of this year with Christie’s New York pulling in $864 million during its Fall Marquee Week with its highlight, Monet’s Le basin aux nymphéas (1917-19), selling for $74 million. In a blockbuster auction, Picasso’s Femme à la montre (1932) sold at Sotheby’s New York in November for $139 million.
But these sales may have disguised a market where ‘average values have moved little since 2016’, as one expert said.
‘The auction season’s spring sales are the first measure of market confidence and recent results suggest growth is already starting to slow,’ says AMR’s Sebastian Duthy. ‘While it’s tempting to connect the fortunes of the art market with current external events, big changes to the way auctioneers do business is equally important to factor in.’
Despite a patchy market, data suggests artworks are continuing to drive solid investment returns for UHNWs and investors as increasingly turning to art as an alternative asset class.
Art topped Knight Frank Luxury Investment Index (KFLII) in Q2 with 12-month growth of 30 per cent. It also outpaced other luxury investments as being seen to be more secure than traditional asset classes like stocks and bonds, according to research from London law firm Fladgate.
There was a growing split between New York and Europe, with the Big Apple’s autumn evening sales outperforming London. But the UK’s capital did bounce back and held off Paris in the long-running rivalry to be Europe’s art hub. Since Brexit, London has not been seen as the attractive opportunity it once was, particularly for those based in Europe but auction sales in London jumped 40 per cent in Q3 2023, ArtTactic analysis found, showing it was too early to draw any conclusions.
Watch this space
Watch partnerships gained more momentum in 2023 with top-tier Swiss brand House of Bovet partnering with Raffles London at The OWO, to design limited edition wristwatches. The watches are engraved with details found throughout the OWO buildings and a quote from Winston Churchill: ‘We shape our dwellings, and afterwards our dwellings shape us.’
In an exhilarating partnership, luxury watchmaking brand, Richard Mille, teamed up with SP80, a racing sailboat designed to break the world record for wind-powered vessels. The partnership began through an introduction by NTPT, a company that supplies durable carbon to both Richard Mille (for its handmade watches) and SP80 (for the structure of the boat).
Its prototype was on display for the first time at the 2023 Monaco Yacht Show where it drew a large crowd.
Vacheron Constantin’s ongoing ‘Masterpiece on the Wrist’ project with the Louvre in Paris includes a private tour of the gallery and a one-off watch in which an artwork of the client’s choice is reproduced on the dial in grande feu enamel.
Audemars Piguet’s somewhat controversial tie-up with Marvel resulted in Royal Oak tourbillon watches with micro-sculpted versions of Black Panther and Spider-Man on the dial. And these collaborations don’t appear to be a flash in the pan: the Black Panther watch, launched in 2021 with a price of around £118,000, currently changes hands online for around £380,000.
Panerai’s Submersible Chrono Navy SEALs also launched this year. Limited to 50 pieces, this all-action boys’ toy of a watch is sold with an invitation to an immersive Special Operations Experience.
In other watch news, Audemars Piguet took home the coveted top prize at prestigious ‘Aiguille d’Or’ prize at the 2023 Grand Prix d’Horlogerie (GPHG) awards ceremony. The ‘Oscars of watchmaking’ recognise craftsmanship, innovation and artistry.
And who says sports watches can’t be bling? Not Patek Philippe, who launched ultra-opulent women’s sport watches in 2023, including the spectacular gem-set Aquanaut Luce Rainbow Minute Repeater, Reference 5260 that is set with 52 rainbow-coloured baguette-cut sapphires (3.19 ct), 112 baguette-cut diamonds (7.31 ct) and 160 brilliant-cut diamonds.
The brand also announced three spectacular versions of its classic sports-luxe watch, the Nautilus, emblazoned with all-over snow-set diamonds, and decorative elements – bezel, dial markers and bracelet centre links – in either blue sapphires, rubies or emeralds.
Car market stalls but some sectors overtake expectations
High interest rates and government sanctions on UHNW Russians put the brakes on UK sales of new supercars, research published in November suggested.
Sales of supercars in the UK slowed significantly, with just 621 cars registered in the UK in the year to March 2023. This was down from the 1,906 added in the 12 months to March 2022 and the 1,099 in 2021, according to the research compiled by national accountancy group UHY Hacker Young using DVLA figures.
Worldwide, the luxury car market was projected to reach US$20,650m in 2023, but with sales concentrated in the US.
Not all sales were stuck in the slow lane. The most expensive Ferrari ever sold at auction, a 1962 330 LM/250 GTO, was bought for $51.7 million in a sale hosted by RM Sotheby’s at Sotheby’s New York in November.
John Mayhead, UK editor of Hagerty Price Guide, told Spear‘s at the time, the sale was proof classic car collectors were still keen to buy, despite external factors subduing the market.
‘Pandemics, wars, fluctuating interest rates and a rise in the cost of living have created uncertainty and, in certain areas of the market, dissuaded investment in cars,’ he explained. ‘But for those who are wealthy enough, this can be a time of great opportunity, but they will only buy the very best.’
And they don’t get much better than the Rolls-Royce $30 million La Rose Noire Droptail which was unveiled in September. The first completed car in the third project from Rolls-Royce’s ultra-exclusive Coachbuild division, the La Rose Noire became the world’s most expensive car. The client’s identity has been kept confidential but they are rumoured to be a billionaire French family.
Royal bleu diamond is the year's most expensive jewel
The Bleu Royal, one of the rarest diamonds in the world, became the most expensive jewel to sell at auction in 2023. The 17.6-carat diamond ring was sold at Christie’s Geneva for slightly over $44 million, just shy of the $50 million upper estimate set prior to the auction.
Max Fawcett, head of jewellery at Christie’s Geneva said the sale reflected a wider trend for interest in coloured stones. Driven by collector demand and an increasingly limited supply, prices for top-quality coloured diamonds have increased exponentially in recent years.
Fawcett said the diamond was unique because of its deep rich blue colour and its unmodified pear shape. ‘It really ticked all the boxes, which is why we managed to excite collectors all around the world, all the way from the Far East, also to America,’ he said at the time. ‘We're extremely delighted with the result.’
It was only the fourth time in Christie’s 250 years that a fancy vivid blue diamond over 10 carats has been on sale.
LVMH reshuffle sparks Arnault family succession rumours
HBO’s super-rich saga Succession might have been TV’s big draw in 2023 but for some, the real drama lay with who will inherit the business empire of the world’s second richest man, Bernard Arnault.
The 74-year-old – one of the billionaire winners of 2023 and a 2023 Spear's Power List inductee – has spent years preparing his five children to step up to take control of LVMH, his luxury and fashion conglomerate but has kept any succession plans underwraps.
In November, a reshuffle at LVMH sparked succession rumours when it was announced eldest son Antoine, 46, will step back from the day-to-day management of upmarket menswear label Berluti as of 1 January. Was he being lined up for the top job?
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It’s by no means a given; all five of Arnault's children manage one of LVMH's brands: Delphine Arnault, 48, is CEO of Dior; Alexandre Arnault, 31, former CEO of luggage brand Rimowa, is now a Tiffany & Co. executive; Frédéric Arnault, 28, is CEO of watch brand Tag Heuer; and Jean Arnault, 25, is marketing and product development director of watches for Louis Vuitton.
Despite the re-positioning, LVMH lifted the age limit for its CEO in 2022, allowing Bernard Arnault to stay at the helm until he’s 80 so he might not be relinquishing the reins just yet.
The shine comes off whisky
Purchases of rare whisky bottles, which have been the strongest performer over the past 10 years in the Knight Frank index, were the only luxury asset class to see a fall this year.
The results were compiled for Knight Frank by Rare Whisky 101, an intelligence and insight firm which tracks interest in fine whiskies. ‘Bottles of rare whisky have had a far more sedate time from a performance perspective over the past three years,’ said Rare Whisky 101’s Andy Simpson of industry consultant Simpson Reserved.
[See also: How to secure the latest edition of Diageo’s ‘rare’ Prima & Ultima whisky collection]
‘Higher value (over £5,000) bottles have re-traced recently due to a myriad of geo-political, social and economic reasons. Certain brands have still performed well, while the market leader (from a sheer volume of market perspective), Macallan, has seen particularly punishing losses with its index re-tracing almost 12 per cent over the past twelve months.’
Mayfair manoeuvres
In August chef patron Michel Roux Jr announced he would be closing Mayfair stalwart Le Gavroche in January (the last day of service will be Saturday 13 January 2024 – but good luck getting a table).
The restaurant was started by his late father, Albert, and uncle, Michel Sr, in 1967. In a heartfelt statement, Roux Jr said he needed to step down to find a better work/life balance, spend more time with his family and on his other business ventures.
But as W1 said goodbye to one legendary Mayfair venue, another rises from the ashes as Richard Caring’s 90s’ society favourite Le Caprice is about to be relaunched by Jeremy King as Arlington.
Arlington is one of three slated King openings as he resurrects a new empire after losing control of the Wolseley along with the rest of his portfolio when he was ousted from Corbin and King in 2022. The Park, a ‘21st-century grand café’ in Marylebone, is slated for a spring 2024 opening, while the regeneration of Simpson’s in the Strand looks set to reimagine this bastion of English dining that will still draw on tradition.
