Developing Hotels for the New Luxury-Class Traveler

By Tom Baker, Managing Principal

Lavish and luxurious properties suffered most in the wake of the pandemic when all but essential travel was suspended. This category witnessed double-digit drops in occupancy and ADR, even in popular hotels that were previously a model of resiliency. In 2022, AHA, along with the rest of hospitality-focused companies, are keeping a very close eye on the revival of travel for the purposes of luxury and leisure. There’s good news to be had; demand is robust, and travelers are bursting at the seams to get out and discover new experiences and locations. 

Developers looking for ripe investment opportunities in hospitality will need to appeal to a new demographic of luxury-class travelers to capitalize on the post-pandemic travel frenzy. The face of travel in 2022 and onward is young – there’s a sizable surge of moneyed millennials aging into more frequent luxury getaways. This demographic is oft-described as “experience seekers” and they travel primarily to immerse themselves in unique (and Instagrammable) settings.

Consumption behaviors have been evolving, and old notions of what was considered a “luxury” property or experience will have to make way. Here’s some insight from our team about the best ways to appeal to this new class of young, affluent travel lovers:

1) Prioritize Private, Distinctive Amenities that Make for a One-of-a-Kind Experience

For those competing with VRBO and Airbnb, combating the decentralized, seemingly ever-looming threats to hospitality may seem futile. Luckily, we have found this to be definitively untrue. As much as Millenials love the option, there are some experiences that a vacation rental share will never be able to accommodate. Having access to onsite restaurants, housekeeping staff, airport shuttle services, and other convenient mainstays of hospitality is still widely appealing to the new demographic. The other newer amenities this crowd is searching for have now become easily identifiable, and will become near-ubiquitous in successful future properties. A classic example of this – a distinctive and original swimming pool. Developments that boast a lazy river, infinity pool, swim-up bar, etc., will absolutely reap the rewards of enhanced social influence. A swimming pool is just a swimming pool. Unless it is also an irresistible photo-op, a thrilling right-up-to-the-edge experience, or a fresh and memorable feature that won’t be immediately forgotten. 

Some classically lavish amenities can find a surge of renewed interest by becoming more personalized or private. Having access to a hot tub or sauna is luxurious. Having an in-room shower sauna or a hot tub on the balcony of your private room is next-generation luxurious. Some features which are relatively cheap and easy to implement in development, like heated bathroom floors, will absolutely make a difference to these travelers. Reviews, which are more important than ever before, are full of praise for all the “little luxuries” guests encounter. Think, adding an in-room craft beer tap. Yes, it is a thing. And, it’s a thing that garners loads of positive interest in your most important demographic. 

2) Instagrammable Everything – Appealing to the FOMO Generation

In 2022, your competition is not just other similarly priced properties in the area. Your competition is potentially every other unique or quirky property featured by influencers and celebrities on social media. Seeing what everybody else is presenting on social media all the time has made the new class of travelers long for a truly unique experience among thousands. 

The key is ensuring that amenities evolve to suit the preferences of a generation that prioritizes a unique, culturally-informed travel experience. Hotels have embraced this need to stand out by incorporating loads of eccentric amenities such as elevator bartenders, customized cosmetic and aromatherapy offerings, in-room plant menus, and more. Consider each feature, amenity, and piece of art in the property and ask, would this appear in a popular Instagram post? Urban area hotels, such as the Modernist Hotel in NYC, have a fantastic opportunity to offer guests a special taste of stylish city life. The Modernest provides visitors with truly breathtaking views of the city from their skyline terraces, and at the same time host their very own acclaimed Modernist Art Gallery. 

3) The Importance of Location is Here to Stay, in a Different Way

The travelers of tomorrow are not interested in having the exact same experience over and over again, just in different locations. The unique location and experience of a place IS the draw. “Locally sourced” is a new mantra for all businesses, and it is the guiding philosophy of traveling millennials. This means your onsite restaurant must be a culinary expression of your unique location. Serving vibrant, authentic cultural dishes is a quick way to the heart of this demographic of traveler. If your hotel is located in a desert climate, there is no need to wax tropical in your decor. Opt instead for a celebration of native plants. Source the art found around your property from local artists (and offer guests the option to support the artists by purchasing the work). Team up with local ice cream and coffee shops to serve and feature their products. 

Another important amenity consideration that is quickly becoming necessary? Rental gear. Many rental vacation shares include access to outdoor activity gear. If the draw of the location is a snowy, winter wonderland, there will be snowshoes available to use. If it is a rugged mountain retreat? You can bet there will be hiking poles and mountain bikes awaiting guests when they arrive. Artisan and boutique hotel the Trumbull & Porter give guests the opportunity to explore the area using city bikes provided by local partner, Detroit Bikes, that are always ready to be taken out on an urban adventure. Instead of purchasing gear for one or two experiences, these travelers would rather purchase zero gear, and instead pay to have all the experiences possible. ‘Rental’ is no longer synonymous with ‘economy’ or ‘budget’. These travelers want to ski without buying the skis, sail without owning a sailboat, do yoga everywhere they go without lugging around a yoga mat, and so much more. 

The AHA Takeaway

The new demographic of luxury travelers are still defined by their generation. Which is to say – they want it all. And they’ll gladly share with others to make that possible. They fully expect to be able to arrive on location and immediately immerse themselves in the culture and activities of that location. A successful hotel today will incorporate the best attractions into its amenity offerings. A hotel can no longer just be a place for guests to rest their heads. It should also be a fundamental element of experiencing the location. It can be the place guests go to meet and greet native wildlife, try exciting and unconventional cuisine, or even to rent a personal yacht for the day. We’re here to help you ensure the relevance of your investment in 2022 and beyond.

Let’s talk. Use the quick form below and I’ll personally reach out.

– Tom Baker, Managing Principal

Share this article on your favorite platform...

Ready to Talk