Original article from Skift.com, source
Whether or not the luxury travel industry is willing to admit it, the sector finds itself at a pivotal crossroads.
The traditional mainstays of luxury hospitality are no longer as valued as they once were, and a new way of thinking about it has emerged, making it harder than ever to know what luxury really is, and how to deliver it to guests.”I think the luxury segment is facing some really unprecedented challenges,” said Bjorn Hanson, clinical professor at the NYU Jonathan M. Tisch Center for Hospitality and Tourism.
Hanson pointed to the diminished role of concierges and turndown service as examples of how much luxury has changed.
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“What’s happened to concierges? Does a 28-year-old want to rely on a concierge to tell him what he’d like for dinner tonight?” Hanson asked. “With social media and other forms of gathering information and using something like Yelp, younger travelers are looking for things with social media awareness.
“The selection process is different from going to a hotel where you traditionally have an older gentleman concierge and you’re getting his view on what’s a great place to go. The concierge has changed in what it does; now it’s more about making a reservation if there’s an availability issue. The value of a concierge is not what it once was to many travelers.”
Then there’s turndown service, which is colliding with privacy concerns, he said.
“As it becomes optional for more guests, it’s less expensive for hotels to offer. But we’ve eliminated another one of those distinctions that define a luxury hotel. Many of the things and services that were highly valued at luxury hotels before are just not as needed anymore. We keep taking away what defines luxury.”
It’s becoming tougher for luxury hoteliers to deliver a clear value proposition to guests — a reason to choose to stay in their hotels over an upper upscale, upscale, or a limited-service hotel, or even an Airbnb. So, what can they do to compete, and how are they choosing to define what “new luxury” means?
Skift spoke to hotel executives at the International Luxury Travel Market last month in Cannes, France to ask how they are defining luxury, and their responses are as varied as their respective hotels’ approaches.
The Curious Traveler
“I think of today’s luxury traveler as a curious traveler,” said Marc Dardenne, interim CEO of Jumeirah Group. “Before we wanted consistency in luxury but now we want to be enriched in cultural experiences and learning, and having engagement.”
To that end, Dardenne said Jumeirah is considering debuting luxury tented camps in the desert or in Africa to appeal to guests who want more adventure or an opportunity to learn from their travels.
Next year, Capella Hotel Group is opening its own luxury tented camp in Ubud, Bali, and CEO Nicholas Clayton said he and his team are aware luxury will always be defined, in some way, by price and the fact that not all luxury can satisfy every guest.
“Luxury is an overdone word and I hate to use it but prices will always be consistent with that exclusivity,” Clayton said. “It’s OK that we’re not everyone’s cup of tea. There will always be more exclusive products and higher price points, but how it appeals to people and what appeals to people is changing. They understand quality and standards but they also want some degree of surprise.”
Both Dardenne and Clayton said they are incorporating more wellness into the guest experience, and Clayton acknowledged the importance of “rich programming for things people want to do both on and off a property.”
Wellness and Balance
Neil Jacobs, CEO of Six Senses Hotels, said hoteliers who are just now realizing the significance of wellness in the guest experience aren’t knowledgeable enough to deliver the kinds of wellness experiences guests need.
Jacobs said that, like definitions for luxury, the definitions for wellness are just as varied. “Wellness and luxury are really about both wellness and wellbeing. It encompasses all of it,” he said. While he believes wellness is an integral part of what defines new luxury, he said “sustainability” is also important, as is a sense of community.
“People want to be with people,” Jacobs said. “Dr. Oz said that loneliness contributes to ill health and that’s why creating community is so important. We want to provide experiences and content for building memories, for things that touch your heart.”
Expanding Experiences for Cultural Currency
One company that made sizable investments in wellness in 2017 was Hyatt Hotels & Resorts, which purchased Miraval and Exhale. Tristan Dowell, vice president of global luxury, lifestyle, and leisure for the Hyatt Sales Force said that today’s “high-net-worth travelers want experiences beyond what a traditional hotel company can offer.”
“We know the wellness market as a whole is a trillion-dollar business and people are more focused on well-being and mindfulness,” Dowell said. “There’s a perfect synergy with Miraval, and it’s providing wellness options across all of our brands. It lets us think about what we can further offer in terms of wellness experiences within all of our brands. We also plan on bringing well-being experiences from Exhale into all of our brands, too.”
Hyatt’s investment in Oasis, an alternative accommodations platform, was equally driven by a desire to give its guests more choices in the experiences they can have when they travel. Dowell said, “Oasis will be carefully incorporated into our Unbound Collection by Hyatt, and will offer experiences for World of Hyatt members.”
This type of direct investment into the sharing economy is one that few major hotel companies, with the exception of AccorHotels, have made. But Hyatt and AccorHotels’ forays into the luxury and upscale home sharing space shows they acknowledge the growing popularity of private homes, villas, and luxury apartments for luxury travelers.
“Our competitors have different priorities, and we’re very focused on listening to what customers are asking for, and that includes alternative accommodations,” Dowell said. “Our core business has always been our brands, but we’re always keen to explore opportunities that expand our offerings.”
Those expanded offerings play a big role in Hyatt’s new World of Hyatt loyalty program, which debuted in March 2017. “World of Hyatt is aligned to experiences and what customers wanted,” Dowell said. “While the term ‘experiences’ has been used for a number of years, we are finding that what travelers really want is knowledge, to learn; they have a hunger for learning new cultures and experiences that can be passed on. It’s about cultural currency.”
Real-World Experiences With Purpose
Tina Edmundson, the global brand officer of luxury and lifestyle brands for Marriott International, sees today’s luxury traveler as more socially and consciously aware of his and her impact than previous generations, and like Dowell, she believes they crave more culturally enriching experiences.
“The new school of wealthy is economically powerful but also aware of how their consumption affects others.” She said. “They are craving real-world experiences and for them, luxury is about quality, comfort, and elegance.”
Chinmai Sharma, chief revenue officer of Taj Hotels Resorts Palaces and Safaris, said he’s also seen a rising consciousness among luxury travelers. “Luxury means different things to different people. It’s about maximizing the value that they have,” he said. “We’ve been in the luxury market for a long time and we’re looking at food and beverage, the local aspect, CSR (enriching lives of communities), safari lodges, employment for local communities, etc. We’re trying to be more responsible. There’s a larger purpose to luxury today.”
Edmundson added that the three things, or “macro trends,” defining luxury today are “self-actualization, wellness/well-being, and high-tech.” Edmundson said, “Bucket lists are evolving from where you want to go and who you want to see what you want to be. Access has become the new authentic.”
High-Tech to Complement High-Touch
Edmundson also said that technology’s role in defining today’s luxury guest experience shouldn’t be discounted.
“When you say that technology shouldn’t overtake human experience, you’re saying something that doesn’t make sense to today’s consumer,” she said.
Jumeirah’s Dardenne said his group is looking at ways to leverage technology to elevate the guest experience and develop more personalization.
At Hilton, John T.A. Vanderslice, global head of luxury and lifestyle brands, said “I think the new luxury is really being defined by something we like to call ‘smart luxury.’” He pointed to the Conrad brand as being tech-forward and efficient, without sacrificing high-touch service.
Grace Bay Resorts COO Nikheel Advani said that while technology is important, the truth is that the one thing that will keep luxury distinct is service. “Luxury will always be about relationships,” Advani said. “TVs, marble, etc. will always be mainstays but we don’t compete on those. Experiences will always be important; you go back because of the way people made you feel.”
Debra Dhugga, managing director of the Dukes Collection, echoed Advani’s sentiments. “Lifestyles at home today are so high that it’s hard for hotels to keep up sometimes. But at the end of the day, luxury is really about being catered for so you don’t have to think of anything and you never have to ask for anything.”
The Future of Luxury
Although luxury travel is facing some challenges, as Hanson noted, the hoteliers with whom we spoke are hopeful about its future.
Hilton’s Vanderslice said, “We all knew that luxury would come back after the recession in 2008. It’s remarkable that the growth of luxury has been so strong, but it’s because people primarily want to reward and participate themselves with luxury.”
And as long as they do that, there will always be room for luxury experiences, even as they evolve and that’s a continual process that the luxury hospitality industry is not only responding to but driving in some ways.
“For us, this idea that people are looking for authentic, more genuine experiences translates into many directions,” said Christian H. Clerc, president of worldwide hotel operations for Four Seasons Hotels and Resorts.
“It really shapes the way we develop a product, design, and the way that we use technology. We look not only at what’s happening within our hotel space, but I am inspired by what’s happening in the luxury space in general. These trends aren’t limited to the hospitality industry. What we are trying to do is help people live their lives today and travel the world, and their desires are very similar in terms of what they are looking for, not only in the hotel space but also in their lifestyles, and we are inspired by that.”
Photo Credit: A suite at the Andaz Amsterdam, Prinsengracht. Today's luxury hotel experiences have evolved greatly from traditional concepts of luxury. Hyatt Hotels and Resorts