A stone's throw from the Arc de Triomphe, in a building where George Gershwin composed "An American in Paris" in 1928, the Peninsula opened its doors on Aug 1, becoming the French capital's latest five-star hotel.

Qatar's Katara Hospitality and The Hongkong and Shanghai Hotels spent $1 billion on the project, buying the building from the French Foreign Ministry, which had taken it over after World War II, when it had served as the German army headquarters.

The Peninsula's opening coincided with the reopening of another luxury hotel in the city, the Plaza Athenee, which had been closed for several months for refurbishment, increasing super-high-end lodging options for the world's rich. While Paris - one of the world's most-visited cities - has fewer five-star hotels than New York or London, the market's heating up with several new and renovated hotels set to come on stream by 2016.

"I think the competition in 2016 will be intensely tough," Nicolas Beliard, general manager of the Peninsula Paris, says.

For now, Paris's hotel market remains attractive as the French capital continues to lure an increasing number of visitors, especially newly wealthy ones from emerging markets.

About 30 million tourists visited Paris last year, with 40 percent of them coming from overseas.

Although the large majority of clients of luxury hotels are still American, British or Japanese, since a growing number of them are coming from countries such as China, hotel chains are taking note.

"Twenty years ago, all hotels had the same code," Vanguelis Panayotis, director of development at Paris-based MKG Hospitality, an industry analysis group, says.

"Now, they specialize to appeal to particular clients. The Peninsula is a bit ostentatious compared to what traditional clients seek. Westerners want a more authentic experience."

At the Peninsula, Chinese lion sculptures greet visitors at the entrance and it has a Cantonese restaurant - one of the hotel's six eateries - a reminder of its Hong Kong connection.

Its other restaurant L'Oiseau Blanc, or the White Bird, has a miniature of the French biplane by the same name that disappeared over the Atlantic in 1927.

The hotel's Kleber bar is at the site where former US Secretary of State Henry Kissinger negotiated the peace agreement that ended the Vietnam War. The talks took place at the international conference center that emerged from the conversion of the Hotel Majestic, which the Germans had taken over during the war - like they did several others during their occupation of the capital.

With 200 rooms including suites with rooftop gardens, a spa, and the Peninsula's signature Rolls-Royce limousine service, the hotel has introductory rates from 695 euros ($933) to 25,000 euros ($33,500) a night for the most expensive suite. It also boasts an in-house developed tablet application to manage the temperature and the lights of each room.