It’s harder than ever to open a new luxury hotel. Interest rates and construction costs are high, causing even projects that do make progress to take longer than expected.
On the one hand, this means fewer new hotels coming into the space, driving nightly rates even higher. But on the other hand, it puts a lot of pressure on hotel owners to renovate and refresh existing hotels to offer something new to old guests. This often means new restaurants, out-of-the-box experiences and revitalized rooms and suites.
The recent International Luxury Travel Market conference in Cannes, France, showcased some of the leading trends in luxury hotels leading up to 2024. Here are some of our takeaways.
Extensive experiences
Luxury hotel brands generally don’t add waves of new hotels in the best business climates. But current financing trends make it more difficult than ever to expand into new markets. When a brand fails to add a slew of new properties, the existing hotels in its portfolio must suddenly shine brighter than ever before. This means we offer returning guests new experiences, in addition to beautiful room and suite additions they haven’t seen before.
The Peninsula New York, first opened in 1905, will undergo a phased renovation in 2024 that will include new carpets and wall fixtures, as well as a brighter Palm Court restaurant. The hotel’s rooftop bar will have more of a loft atmosphere and is expected to be ready in September.
Waldorf Astoria Maldives Ithaafushi’s guest base relies on 65% repeat business, including the $90,000-per-night private island favored by Beyonce and Jay-Z. The fact that the resort has so many returning guests means that the resort must constantly find new ways to keep everything fresh, from the food served to guests to the cocktails mixed at the bars.
“I find it a huge luxury to work for us, because how do you satisfy a billionaire? How do you satisfy someone who already has everything?” TJ Joulak, general manager of the Waldorf Astoria Maldives Ithaafushi, said. “You touch the heart. It’s the experience.”
The luxury juggernaut called Marriott
All signs point to a major tailwind for luxury travel at Marriott International in the new year. The world’s largest hotel company hosted a breakfast at ILTM, showcasing all the numbers that give Marriott leadership confidence in their luxury travel sector heading into 2024. Furthermore, there are signs of an expansion of luxury hotels around the world.
Global wealth is expected to increase by 38% to $629 trillion by 2027, according to data from luxury group Marriott. Furthermore, 30% of the world’s wealth is expected to be in emerging economies in the same timeline. But demand for luxury hotels is outpacing supply, with demand expected to grow 11.4% by the end of 2025, compared to a supply increase of just 4.5%.
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How is Marriott targeting new luxury travelers? The hotel company’s leadership team pointed to newer offerings such as the Ritz-Carlton Yacht Collection, which brings brands like Ritz-Carlton Reserve and St. Regis and Edition to Saudi Arabia, and an expansion of the Luxury Collection hotels in markets like Nara, Japan; Tbilisi, Georgia; and Bali, Indonesia.
IHG’s luxury launch continues
The big news at last year’s ILTM was IHG’s massive conversion of Carlton Cannes’ InterContinental membership to Regent Hotels & Resorts. While the Carlton Cannes, a Regent Hotel, opened earlier this year, it was the first time that many in the international luxury travel press had the opportunity to see the property. The hotel’s Belle Epoque architecture shines brighter than ever in this part of the French Riviera. It is also a great compliment to IHG’s continued expansion into luxury and lifestyle.
We’ve covered this extensively, but our eyes are firmly on IHG this new year to see if it can build on its recent momentum with Six Senses and Regent and maintain its leadership in luxury. A brand refresh for InterContinental was announced at the end of the year. Let’s see how that turns out.
It takes a while for luxury hotels to get off the ground
If there’s one thing guaranteed in the luxury hotel space, it’s that projected opening dates are merely suggestions and not firm timelines – especially in recent years. Raffles Boston and Raffles London at the OWO both experienced significant timeline delays during the pandemic.
The end date of the ongoing renovation of the Waldorf Astoria New York, which has been closed for renovations since 2017, is under discussion. (Hilton says late 2024, but sources also told the New York Post it could be as early as 2025.) Eight years still isn’t that bad compared to The Peninsula London, which opened this year after a whopping 35 years in the to have been. Teams spent 25 years finding the right location in London’s Belgravia district and then another ten years from the time the deal was signed.
Good things and wealth come to those who wait.
Geopolitical tension
ILTM wasn’t just about the decadence and sophistication that comes with a luxury hotel stay.
An opening night presentation from Tina Fordham, a geopolitical strategist and advisor to companies and boards of directors, provided a wake-up call for the sector. She called on the industry to stop burying its heads in the sand when it comes to the reality of simmering tensions around the world that are reaching boiling points. This applies to areas such as Ukraine, Israel and Gaza.
While Ukraine didn’t have much of an impact on willingness to travel (Russian airspace may have been closed, but European travel demand was still sky-high last summer), tension in Israel and Gaza did, Fordham said.
“We are already seeing how the conflict in the Middle East, among other things, has affected the US willingness to travel abroad in a way that the conflict in Ukraine has not,” she added.
The upcoming election cycle in the US and other countries around the world, as well as a possible Chinese invasion of Taiwan, also threaten the geopolitical landscape. The travel sector must take this into account. Yet there is also an underlying message behind all the uncertainty: go out and visit your bucket list destinations sooner or later. The past few years have shown how quickly things can change.
‘I wonder how many [travelers] We’re thinking the same way about making sure you take the opportunity to start looking at things before there are more Brexits, before there are more conflicts and other factors that could limit your freedom of movement,” Fordham said.
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