Luxury travellers’ preferences are constantly evolving, but many hotels are failing to keep pace because the people controlling renovation budgets and capital expenditure are not listening closely enough to those who know guests best: travel advisors. At the same time, an explosion of luxury hotel brands means there’s too much noise around what they stand for and the quality of individual properties.
Those were among the key themes debated during a panel discussion at the NYU International Hospitality Investment Forum where luxury hotel executives and leading travel advisors examined how hotels can continue innovating while maintaining relevance with increasingly discerning guests.
“The people on this panel are paid to understand luxury brands, and yet, I think that if we were now to do a quiz, none of us can really list all of the luxury hotel brands that have launched in the last year," said Kempinski Group CEO Barbara Muckermann. "If we can't figure it out, how can we expect consumers to understand?”
Unlike most global hotel companies, Kempinski is moving toward an asset-heavy model where it owns and operates its properties. Most other luxury chains manage the day-to-day operations but don’t own the physical hotels or have a say over when to invest in renovations.
“We need to show skin in the game,” Muckermann said, arguing that greater ownership involvement can help push the boundaries of hotel design and guest experience.
For travel advisors, one of the issues are practical shortcomings that directly affect guest satisfaction.
Stacy Fischer-Rosenthal, president of Fischer Travel, said advisors regularly identify issues ranging from undersized bathrooms to a lack of connecting rooms, feedback that often fails to reach the people making investment decisions.
“My clients aren’t going to fill out a feedback card and leave it at the front desk,” Fischer said. “So how do you get that feedback? It really is talking to people like us.”
Fischer stresses that while advisors have good relationships with the general managers or head of sales, ultimately it’s the owners that need the feedback.
“If we're not listening to our customer and evolving, we're going to become outdated soon,” said Jack Ezon, founder and managing partner at Embark Beyond. “Let's face it, anybody can get a much prettier Airbnb for half the price than many hotel rooms but that's not what you're buying, and that's why we have to keep listening to the customer.”
“Advisors are essentially the market research for hotels and ownership groups," Jordin Greene, vice president of hotel partnerships for Signature Travel Network, added.
So, who is setting the trend?
Tamara Lohan, the global brand leader for luxury at Hyatt and founder of Mr and Mrs Smith, said that customers are being bombarded every day on social media as the industry has become too focused on chasing trends rather than understanding what travellers actually want.
She argued that especially in the luxury market, people travel in order to disconnect from the stresses of everyday life, pushing hotel executives to look beyond hospitality for inspiration
“Don’t just look at hotels or else you risk being stuck in an echo chamber,” she sated.
Yet advisors challenged whether brands are delivering consistently on those promises. Fischer said her team maintains detailed records of individual properties because performance can vary significantly within the same brand family.
“There is a lack of consistency. You have hotels that desperately need renovation. They may be landmark properties that people have known and loved for years but we can't sell them anymore,” she said.
Ezon doubled down on that point, saying that brands are “getting so diluted” that clients and advisors don’t know what they stand for anymore.
In response, Lohan who recently stepped into her luxury leadership role at Hyatt, acknowledged the challenge, stating that the company's focus is on defining how brands such as Park Hyatt can remain relevant to the next generation of luxury travellers while maintaining a commitment to highly personalised service.
Which leads to the question: how high can nightly room rates go? Event moderator Cameron Sperance, the editorial director of Luxury Travel Advisor, noted that only a year ago headlines questioned whether US$1,000 room rates had become the new normal. Today, the debate has shifted to whether prices can keep climbing.
James Farrah, vice president of development for upper luxury brands in the Americas at IHG Hotels & Resorts, said that while price is always a concern, it really isn’t paramount for those at the higher end of travel.
"If you can transform somebody while they're taking a vacation — maybe they're spending a six-figure vacation, who knows — but if they can go and come back and say, 'That was incredible, I feel transformed, I feel reconnected. The way they took care of me, the way they anticipated everything, the way they did things I didn't even know I wanted' — that's when people come back," he said.
Ezon argued that price itself is rarely the issue for affluent travellers, comparing luxury hotels with high-end retail purchases.
“It’s not about price," he said. "It’s about the value proposition. You want to feel good about what you bought. Someone feels good when they spend US$25,000 on a Birkin bag. Do they feel the same way when they spend US$25,000 on a villa at your hotel? That's the question. It’s had to put a dollar value on human connection.”
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