NEW YORK — One thing has become clear to hoteliers and designers as luxury and ultra-luxury hotels have rebounded from the pandemic to outperform other segments: Differentiating on-property offerings is key to capturing and maintaining demand from high-income earners.
Warren Feldman, CEO of Nehmer and principal of HVS Design, said during a panel at the recent NYU International Hospitality Industry Investment Conference that his team of architects, project managers and interior designers have been bringing luxury trends to its upper-upscale, full-service hotel projects.
“At the same time, [we’re also] working with our luxury clients to really differentiate the luxury from the upper-upscale because that has gotten blended more through the years,” he said.
Feldman’s team is currently working on a project in the Caribbean where the client runs a distillery and has also acquired a hotel.
“We’re trying to work on how we’re going to bring that distillery story into the luxury [experience] so that the experience can go all the way to what you would normally experience on the tour of a distillery, but actually bring that into a hotel,” he said.
Homi Vazifdar, founder and executive director of The Canyon Group, which develops and acquires ultra-luxury resorts, said that the transition from “pure luxury to experiential luxury” has prompted his team to add ultra-luxury tented camps and lodges to its portfolio. The goal is for these concepts to drive high average daily rates and occupancies, he said.
“That’s our mantra for the next few years,” he said.
In economic downturns, Vazifdar said it’s historically always the ultra-luxury segment “that comes back with a ferocity.”
The Canyon Group currently has 10 luxury tent accommodations. Also in its portfolio are luxury resorts in destinations such as Costa Rica, Fiji, New Mexico and Utah, as well as projects under development in Mexico and California.
“When the pandemic shut down all our resorts in March of 2020 and reopened in the middle of 2020, from mid-2020 through the end of the year, we practically ran a 100% occupancy at a 40% premium to pre-COVID rates,” he said. “In the middle of the pandemic, we opened Camp Sarika — a tented camp in Canyon Point, Utah — and ran a $5,700 [average daily rate] at practically 100% occupancy. The point is that overall our industry is so resilient. We all have a great lesson to learn, that there is always a pot of gold at the end of the rainbow.”
Jane Mackie, senior vice president of global marketing for luxury, lifestyle and premium brands at IHG Hotels & Resorts, said that even if economic cycles are fluctuating, guests at upper-luxury and ultra-luxury hotels do not want anything taken away from them, including their ability to travel and to see things they’ve never seen before.
Emily Keip, senior vice president of design services in the Americas at Hyatt Hotels Corp., said her company, which has a heavy presence of luxury and lifestyle hotels, quadrupled its number of lifestyle rooms and tripled its number of resort rooms in the past five years.
One of Hyatt’s luxury lifestyle brands is Andaz. A recent opening includes the Andaz Mexico City Condesa, which is an ode to the Art Deco style and is infused with Mexican architecture. The hotel also features a dog bar, called Wooftop Beer Garden and Canine Club, catering to visitors and locals. The space includes a stationary food truck serving drinks and snacks, including a "dog beer." It also features a pop-up pet accessory shop and space for dogs to play.
Mackie said changes in traveler behavior since the onset of the COVID-19 pandemic, especially among high-income travelers, include their willingness to lengthen stays and dine on property. This allows hotels to drive rates, she said.
“We all know we have some nice tailwinds now. To keep that resilience, we have to make sure that we’re delivering that value,” she added.
Feldman said guests at pure leisure and luxury properties also want more variety in workspaces beyond the guestroom. Because of that demand, his clients are creating more “work-from-the-hotel” environments, though it won’t represent a typical business center in a hotel, he said.
Guests in this segment are also gravitating more toward secondary food and beverage options, such as in-room dining and grab-and-go markets on property, he said.
What Goods and Services Do Luxury Guests Want?
Keip said getting the basics right in terms of what guests need and doing it well with a high attention to detail is crucial in the luxury segments.
Mackie said her team spends time communicating with luxury travel agencies and has learned that ultra-luxury guests want large guest rooms, even when traveling to urban markets such as New York where rooms tend to run smaller.
“That ultimately speaks to ultra-luxury. Whether it’s a single person going in for two nights or a family wanting and needing extra space,” she said.
These guests also want a vibrant bar scene and wellness offerings, she said.
Keip said Hyatt leans into customizable wellness offerings across its brands, whether a guest wants to focus on personal growth or book a spa treatment.
Feldman said closets are one aspect of the guestroom that has become more important to luxury travelers. Today, it’s not just about hanging up clothes. It needs to be fully functional with organizational components to help a traveler not only store clothes but also luggage, he added.
Luxury and ultra-luxury travelers also want spaces where they can be seen and where they can retreat in private. For example, the traveler may want to be seen at the hotel’s bar. However, at the pool, they’ll want a private cabana.
Feldman stressed that luxury and ultra-luxury design doesn’t need to be over the top.
“Ultra-luxury design is a function of ‘less is more,’” he said.
Decadent designs don’t work in the long term, he added. It won't be owner-friendly if the hotel needs redesigned every several years.
“From a guest’s standpoint, if they want razzle dazzle, they go to the bar or the restaurant. But understated is a good thing,” he said.
Creating zones in public spaces and guestroom spaces is a way to give guests a choice of both simple moments and more high-energy moments, Mackie said.
“At Regent, we say it’s 50% serenity — that would be your minimalism, your guest room, your blank canvas. Forty percent of it is stimulation and color in certain parts of the hotel, and 10% decadence,” she said.
Training and Accommodating Staff at the Luxury Level
When IHG first came up with its luxury fundamentals training across its brands, leaders realized it was “just too much,” Mackie said.
“[Staff] couldn’t retain it and implement it at the same time,” she added. “So we’re continuing to evolve [training] into bite-sized pieces, and serving it up differently so that people can actually absorb it and execute it.”
The hotel industry has understood that employee retention is now more important than ever, Feldman said.
More of his clients are building staff housing, he said, which needs to be done in a way that isn’t “a low-income housing project but is something that will attract and retain those employees.” Feldman added that the design of staff housing should include family quarters.
“We did that a little bit 10 or 15 years ago, but on the luxury project side, you either identify somewhere that you’re going to use for [staff housing] or you build it because you want to retain that group. That’s how you can provide that great service,” he said.
Keip said caring for staff is just as important as caring for guests.
But at luxury properties, staff almost need to be invisible to guests, Vazifdar added.
“They’ve got to be almost unobtrusive. That’s the hallmark of phenomenal service. You’re there when somebody wants you, but you’re invisible when somebody doesn’t,” he said.