Ibiza Rebranding from Hippie Haven to Luxury Destination

The hotspot for sex, drugs and dance music is looking to go from 24-hour partying to 24-karat gold

Orlando Bloom punches Justin Bieber in a club. Leonardo DiCaprio lounges on his yacht. It is all part of summer time on the Spanish island of Ibiza, famous for its A-list celebrities, world-class DJs and jam-packed, all-night parties.

Celebrities have identified the clubbing mecca as a must stop on the international party circuit at least since the 1950s when Errol Flynn used to moor his yacht Zaca and come ashore with his entourage.

But something seems to have shifted lately, according to a BBC report earlier this month in which several DJs said Ibiza has become too expensive for young people.

“I’m playing in Ibiza this year, only because they pay well,” Afrojack told the BBC. “The whole magic you used to have on Ibiza is not possible anymore because a ticket is $100 (€75). I go to Mykonos, play exactly the same thing and you buy a $13 (€10) ticket. They are too focused on the VIP.”

With competition for the title of party island coming from Greece and Croatia and Las Vegas’ comeback fueled by Electronic Dance Music and Sin City’s ability to snag top talent, Ibiza is in the midst of rebranding itself from a destination for 24-hour partying to one offering a 24-karat gold experience.

Spain’s so-called White Island is aiming to lengthen its season and boost its identity as a luxury destination. Think a newly improved marina for yachters, fancier restaurants and five-star hotels — the only new hotels allowed on the island since 2007.

“There has been a huge investment in thematic hotels aimed at the upper-end of the price range,” said the Ibiza government’s tourism secretary Carmen Ferrer. “It’s not just about the hotels, but all they offer surrounding them — restaurants, water sports, music and leisure. But I think what really distinguishes the luxury offer in Ibiza is the unique lifestyle the island allows.”

The clear preference for the very VIPs this year was the Ibiza Gran Hotel, which boasts the island’s only casino and is sandwiched between the legendary club Pacha and restaurant-cabaret Lio, next door to the marina and cocooned in lavishness.

“We have noticed that the luxury consumers are growing faster and faster, and the world of luxury involves so many services,” Ibiza Gran Hotel general manager Raul Sierra said.

But for Sierra, one of the key ingredients his hotel’s guests are looking for is anonymity. And that’s a tall order. Sitting across the street from Pacha and offering extreme elegance and tailored services make it the natural choice for DJs like Calvin Harris and David Guetta or celebrities like Kim Kardashian and Kanye West, who are at the club at night and chill at the hotel during the day. Paris Hilton recently posted on Instagram a picture of herself on one of the hotel’s balconies overlooking the pool.

“It’s true that among our guests, we have many celebrities but one of our most important goals is to preserve and protect their privacy in order they can make the most of their stay,” Sierra said, refusing to drop names.

Just a bit down the coast, next to super-club Ushuaia and its Ushuaia Ibiza Beach Hotel, Hard Rock has opened its first European hotel property with the 493-room five-star Hard Rock Hotel.

The Grupo Empresas Matutes, owners of Palladium Hotel Group, which owns the Ushuaia Ibiza Beach Hotel and the Palladium Palace Resort & Spa, said it will invest $400 million (€300 million) over six years to cater to the new target of upscale tourists in a public 18-hole golf course and driving range, a luxury shopping center, long bike trails and pedestrian walks that will be handed over to the local government.

Even so, young revelers still are willing to splash out between $67 (€50) and $107 (€80) just to get into a famous party and some $3,340 (€2,500) to rent a house for a week with friends. But they complain about how out of reach the Ibiza prices are getting.

French teenager Elise Heguy passed out from the heat at Pacha just before Steve Aoki came on and blames the expensive cover charge that doesn’t include a drink, the $27 (€20) cocktails and the policy of not providing free water at the club.

“You could be at the point of fainting and they won’t give you a glass of water,” Heguy said. “It’s unacceptable that they charge $11 (€8) for a small bottle of water and they check your bag when you come in so you can’t bring in water.” But fainting didn’t push Heguy to leave before Aoki’s set began at Pacha.

“The clubs are amazing and famous, but expensive. It’s just different in Ibiza,” Heguy explained. “There are pools in clubs, people are partying all the time, the fabulous landscape and weather are worth it. Ibiza has all the famous DJs at the clubs and even if it’s expensive, it’s an experience we won’t ever forget.”

So for now the mix of celebrity, VIP, luxury and young partiers in Ibiza still seems to work.

Aug. 14, 11:10 a.m. A previous version of this article incorrectly indicated that Swedish House Mafia was still together and that Afrojack was one of the world's highest-paid DJs, which conflicted with Billboard's recent assessment of how much he and other DJs make per gig.