It may be the best-known luxury hotel in Paris, but it's also one of the oldest, having opened in 1898. Time then for a serious facelift, to bring the Ritz into the 21st century and keep its clientele coming back in an ever more competitive market.

The five-star hotel has not had a refit since 1979 and failed last year to win France's coveted "palace" designation, given to five-star hotels "of special character."

Located next to the famed jewelers of Paris's Place Vendôme and currently owned by Egyptian tycoon Mohamed Al Fayed, it was once the hotel of choice of Charlie Chaplin, Coco Chanel and Ernest Hemingway. In 1997, the Princess of Wales and Al Fayed's son Dodi dined in the hotel's Imperial Suite before their fatal car crash.

An intimate bar at the rear of the hotel is named The Hemingway Bar after the American writer. In 1944, the machismo-loaded Hemingway, known as Papa to his chums, claimed to have "liberated" the Ritz from the Germans. Former French Resistance fighter Jean-Marie L'Allinec, who was with him, told the San Francisco Chronicle in 2004: "The manager was delirious, he was so happy. He said, 'We resisted the Germans – we kept the best premiers crus from them. We saved the Cheval Blanc!' Papa looked at him for a moment. Then he said, 'Well, go get it.' They brought up some bottles and Papa started slugging it down. Imagine! This great old Bordeaux, and he's slugging it down like water."

In peacetime Hemingway also liked to drink Bloody Marys at the Ritz, before attending the steeplechase meets at Auteuil. In a letter to a friend in 1947, he detailed his Bloody Mary recipe:

To a large pitcher (anything smaller is worthless) add:
1 chunk of ice (the biggest that will fit)
1 pint of vodka
1 pint chilled tomato juice
1 tablespoon Worcestershire  sauce
1 jigger fresh lime juice
Pinch celery salt
Pinch cayenne pepper
Pinch black pepper
Several drops of Tabasco

Keep on stirring and taste it to see how it is doing. If you get it too powerful weaken with more tomato juice. If it lacks authority add more vodka.

Hemingway added: "I introduced this drink to Hong Kong in 1941 and believe it did more than any other single factor except perhaps the Japanese Army to precipitate the fall of that Crown Colony. After you get the hang of it you can mix it so it will taste as though it had absolutely no alcohol of any kind in it and a glass of it will still have as much kick as a really good big martini. Whole trick is to keep it very cold and not let the ice water it down." 

The 140-million-euro ($170 million) refurbishment of the Ritz will last until mid-2014, equipping the hotel with a new garden restaurant and fitting out its 160 rooms with "the latest technology." All the bedrooms will be redecorated, although a Ritz spokeswoman said they would stay traditional in style, in the hotel's trademark tones of pink, almond green, yellow and sky blue.

For industry insiders, the overhaul is long overdue. "It was a waste to see a hotel with such a location, with such a history, in a state like this," said Vanguelis Panayotis, head of development at the MKG Group hospitality consultancy. "To justify this kind of price, you really have to offer quality on a par with the competition."

From cables from flat-screen televisions hanging down in full view, to aging elevators and dumbwaiters, the Ritz spokeswoman admitted the hotel has some sprucing up to do to match the competition.

Like the rest of the luxury industry, the high-end hotel sector is booming, thanks to demand from emerging markets, while Paris has also seen American clients flood back to the French capital to take advantage of a weaker euro.

Two state-of-the-art Asian luxury hotels, the Shangri-La and the Mandarin Oriental, opened in Paris in 2010, raising the stakes for senior players like the Ritz. Another established Paris hotel, the nearby Crillon, is closing for renovations in the fall, while the Bristol and the Meurice have already had face-lifts. The Plaza Athénée is working on an extension, and the Royal Monceau underwent a full refurbishment under its new Qatari ownership from 2008 to 2010.

Founded by César Ritz and the chef Auguste Escoffier, the Ritz is home to L'Espadon restaurant, holder of two Michelin stars, and the Ritz-Escoffier cooking school. For closing night on Tuesday, chef Michel Roth put on a special 240-euro ($295) menu with foie gras (eat your heart out Californians), blue lobster in raspberry vinaigrette with caviar, and Escoffier's famous creation peach melba among the delicacies on offer. The guests also availed themselves of L'Espadon's legendary wine cellar. The Ritz boasts that it contains 35,000 bottles, including extremely rare Cognacs and grand cru wines. 

The hotel's rooms were virtually booked out for the final night, mostly to regulars, for prices ranging from 850 euros ($1,040), to 10,000 euros ($12,300) for the Coco Chanel suite.

In Escoffier's autobiography, "Memories of My Life," he writes that at the time of its opening, the Ritz contained "the services essential to an innovative hotel with all the modern comforts necessary to satisfy a demanding clientele." It rapidly became the meeting place for "the cream of society in France and abroad."

He also recalls the night at London's Carlton Hotel that he created peach melba for the great opera singer Nellie Melba. Having seen her perform at Covent Garden in "Lohengrin," Escoffier decided to commemorate the majestic mythical swan that appears in the first act.

"I presented her with a dessert of peaches on a bed of vanilla ice cream, covered with a lace of spun sugar, and placed in a silver bowl nestled between the wings of a beautiful swan sculpted out of a large block of ice. The effect was stunning."

The Ritz's 460 employees have all been promised their jobs back after the renovation. In the meantime, 320 have taken up a severance package offered by the hotel. Star chef Roth will keep working for the Ritz as an ambassador, promoting it to clients in Asia and around the world. "Many of the kitchen staff have found other employment, but most have said they want to come back to the Ritz. It's a very close-knit team," said the hotel spokeswoman.

As Escoffier noted in his autobiography, "the entire staff of the Hotel Ritz is, and has always been, most exemplary."

- AFP with Wine-Searcher staff