How has the luxury hotel market evolved?

“I think the likes of the Claridges and the Ritz – beautiful properties and wonderful places but attract mostly the older generation – will have to make some changes eventually or be left behind,” says Ronald Homsy, CEO and co-founder of the Utopian Hotel Collection, a newly created hospitality consortium of luxury independent hotels.

Homsy started his career studying hospitality management in Switzerland before deciding at the age of 24 he wanted to own his own restaurant – turning one restaurant in Beirut into over 30 outlets including bars, nightclubs and catering companies across the Middle East and Europe. After 17 years he wanted to return to the hotel industry, so he sold his company. “I missed the hospitality and hotel side of things,” he says, “and wanted to combine this with a technology component.” He was in conversation with a friend and colleague from his days studying in Switzerland, Paul Cordier, and realised that “we were on the same wavelength in the sense that there was a big gap in the market on the luxury independent properties for the new luxury traveler of today”.

In 2015 the pair embarked on a plan to meet what they saw as a big opportunity, and conducted research which found that 72% of people would rather spend money on experiences than ‘things’. This is indicated that “travellers are now seeking more than just exceptional service, fittings and furnishings”, says Homsy.

He believes there is an “appetite for the intangible” and a “desire for truly authentic adventures which enrich and surprise”. This trend is one that is not only found in the luxury hotel market but one felt across all sectors. A 2017 Euromonitor study found a trend fairly evenly represented across the globe for a “pursuit for experiences over possessions”. Recognising this shift in preferences, other hotel chains reacted fast. Hyatt launched the ‘Unbound Collection’ in March 2016, offering non-hotel travel experiences such as river cruises and other adventures. Similarly, Hilton’s Conrad Hotels’ latest marketing strategy emphasises selling experiences through blog-style local guides, enabling a fully customisable experience. Homsy and Cordier’s answer to a rapidly growing space was to find 25 luxury independent hotels created to capture “a new sense of luxury”.

New sense of luxury

They curated a list of five key ‘principles’. “We are really looking for quality not quantity, and consistency inside our luxury properties is crucial,” says Homsy. “We are curators – what we do is go into a property, we live the moment, talk to the people, and use the spas, and if we come to the conclusion that the property meets our ‘five principles’ – ‘the story of everything’, ‘the people to people service’, ‘the unexpected adventure’, ‘the playful character’, and ‘the seamless technology’ then it meets what we are looking for in a luxury hotel. If on top of that if that it also has the design characteristics we want…that is when we engage with the properties and propose that it joins Utopian.”

The portfolio of the Utopian collection certainly offers guests more than the standard luxury stay. From fig-picking in Europe’s biggest fig plantation at the Hotel Furnirussi Tenuta’s in Italy, to the Nolinski Paris where guests can have an old-school photoshoot experience at Studio Harcourt, or even Heli-yoga at the Le Grand Bellevue Hotel in Switzerland. “We believe that luxury in the old days, all about gold ornate, over time has become more about experiences, but what we believe here at Utopian that it is all about attitudes.

“Everyone sees luxury from a different perspective. We need to make sure we are catering for our clients depending on what they are really looking for and not coming back to our clients with the same rhetoric, there is no point offering a luxury golf experience for someone that has no interest in golf.”

He adds luxury is now about understanding what clients want personally – something “you could not do back in the day”. However Homsy admits nowadays data allows business owners to cater for their customers’ needs and be as personalised “as humanly possible”.

Clare Thomas, director of marketing at the Grand York Hotel and Spa – York’s first five-star hotel and the only AA five-star rated hotel in Yorkshire – is on the ‘experience’ bandwagon “As with everything, it’s all about the experience,” she says. “Consumers, and the way in which they make purchasing decisions, have changed; it’s not enough to have a good product or competitive price, guests demand unique experiences to keep their interest and keep them coming back.”

She says the emergence of new technologies has changed guest expectations and has also redefined the “customer journey”, altering the way in which hoteliers reach out to and communicate with consumers, as well as the way in which they book.

So what are these hotels doing to make their mark in this new experiential landscape? The Grand York offers a personal helicopter transfer service which will allow guests to be whisked, VIP-style from their homes and back again – the only such service in the UK. Philip Bolson, general manager says he was asked by guests about whether such a service could be rendered. “To fulfil this,” he says, “we have teamed up with a local aviation company who can provide transfers in two types of helicopter depending on how many guests will be staying with us.

“Where possible, our helicopter will pick up guests from the grounds of their homes, or land nearby, and fly them to York where our chauffeur service will collect them from the drop-off point within the grounds of York Racecourse, a five-minute drive away.”

Homsy explains it is as much about the “authentic attitude”, as much as it is about the experience. “People want to experience things as locals do” and it is important to them to be in properties that are very “authentic to their destination”.

“They do not want to wake up in a hotel in Paris and not recognise that they are in Paris or New York or Bangkok because it is a chain hotel – they want to feel the Parisian experience,” he exclaims. “Gone are the days when you want to get to the hotel and the first thing they ask you is for your passport or credit card or ‘how was your flight?’ –  which obviously isn’t going to be great if you’ve been on a plane for 10 hours.”

A ‘younger mindset’ to luxury

Data from Mintel in 2016 shows that older millennials (aged 25 – 34) spend the most on holidays. Londoners in particular are key targets for luxury travel operators with consumers living in Inner and Greater London spending the most on the holidays. This is also supported by research from Forbes which shows as many millennials today enter their peak earning years, this generation will experience affluence forever, and will increasingly spend their disposable income on travel. Homsy sees the generational shift in the luxury traveller as one of the main reasons the market is evolving. “It is definitely the younger generation that makes up the bulk, but interestingly the Gen Xs and boomers have adopted similar characteristics because technology has changed the spectrum of things and the spillover is huge. It is not just defined by generations everyone is looking at luxury through a different lens.”

To make waves in a market that changes at growing pace, Homsysays the value of investing in technology is “huge”. One of the key areas he points to are hotels offering their own iPads or smartphones to guests in their room. But he believes that in the luxury market guests should be be able to use their own devices.  “They don’t want to have to be carrying two, or if you have to make sure they are given a smartphone that allows them to make calls and use data without extra roaming charges so they can go out and explore without any constraints,” he says.

Principally he says owners need to realise “they have to change as market and expectation of luxury has changed”. “Either they are going to make a plan and start making changes or they are eventually going to be out of the market”.

CONCLUSION

Technology will continue to change guests’ expectations and the way in which we communicate, agrees Thomas. “Those who remain competitive will be those who adapt technology to meet guests’ expectations, as well as creating truly unique experiences,” she says.

While the Utopian Collection is still in its infancy, its founders are ambitious, and aim to be one of the “main innovators” in the luxury market. They have plans to expand into Asia next year and by 2021 to have locations in every continent. The end game of this masterplan? 250 properties in five years.

During that time Homsy believes the main target will be to keep up with developments in the sector and see it as a continuous challenge.“There will be a gradual change but hotels will have to innovate even more, because the discussion we are having today will, I can guarantee, be outdated in two years. We have to constantly re-imagine and innovate amongst an ever-changing backdrop.”

 

Homsy details the five details that outline a Utopian hotel below

1.THE STORY OF EVERYTHING
From the heroic story behind the stag’s head hanging in reception, to why the staff always skip the last step on the staircase — these are the places where every detail has a reason for being and a story behind it.

2.UNEXPECTED ADVENTURE
We select only places that offer a sense of discovery, where you started your evening with one plan and ended up doing something far more exciting. They encourage you to explore and find out what’s around the next corner.

3.PEOPLE TO PEOPLE
Instead of being fawned over by servants or dictated to by overlords, we value the places that evoke a sense of equality — where a member of the service team could just as well be one of your entourage.

4.SEAMLESSLY INTEGRATED
It’s not about free Wi-Fi or iPads. We look to partner with hotels who want to use technology to make guests’ experiences even better: before, during, and after their stay.

5.PLAYFUL CHARACTER
These are hotels run by people who understand what play means to people. They flaunt their individuality, fly the flag for eccentricity, and give their guests permission to be just that little bit more carefree, experimental, and sometimes, downright silly.

This article first appeared in the October 2018 issue of Hotel Owner