On Leading Brands Shaping the Future of Hospitality
In our recent report, "The World’s Most Iconic Experiential Luxury: How Leading Brands Are Shaping the Future of Hospitality," we discuss the surge in demand and a desire for highly personalized and memorable experiences in the luxury hospitality industry, resulting in the establishment of new luxury standards. The report highlights several motivating factors contributing to this trend.
Download "The World’s Most Iconic Experiential Luxury: How Leading Brands Are Shaping the Future of Hospitality" report.
Excerpt from "The World’s Most Iconic Experiential Luxury: How Leading Brands Are Shaping the Future of Hospitality"
The Rise of Experiential Luxury: Why Experiences Are the New Status Symbol
A Significant Shift in Consumer Values and Expectations
The world of luxury, with its established definitions and norms around what constitutes luxury, has shifted and continues to do so. Luxury has embraced meaningful experiences, mindfulness, authenticity, and sustainability as non-negotiables. Due to its very experiential nature, luxury hospitality can tap into these new notions more intensely than luxury products. Customers seek personal growth, self-discovery, and connection through unique and memorable activities delivered authentically. At the same time, they demand ethical and sustainable practices.
The Power and Influence of the UHNW Consumer and the Opportunity for Cross-Selling
Due to their high spending power, ultra-high-net-worth (UHNW) individuals represent a disproportionately high share of consumption in the luxury hospitality sector as well as in the personal luxury goods category. This allows hotels and resorts to invest in creating high-end, curated experiences that cater to their specific desires and tap into the high demand and premium value of bespoke experiences, offering customization based on interests, exclusivity with access to unusual events and amenities, and a high level of unprecedented service. According to BoF Insights, over 30% of HNW individuals surveyed see branded hospitality experiences as a driver for purchasing the brand’s home goods. There is an inherent cross-selling opportunity here, allowing brands to deepen existing ties with customers and facilitate a lasting memory of that experience through an evocative product purchase.
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In addition, luxury brands benefit from elevating their brand image and reputation through the UHNW individuals who are also excellent brand ambassadors (especially when they have VIP/celebrity status). They cement the brands' reputations through recommendations, word-of-mouth, and visibility as they promote the brand in their social circle.
Growing Demand for Personalized and Memorable Experiences
Whether customers belong to the very wealthy or merely well-off category, they desire personalized and memorable experiences that are not just cookie-cutter but customized to their tastes. This can involve personalized itineraries, curated activities, and access to exclusive events or locations. Customers also crave emotional connection through immersive experiences, interactive elements, and opportunities for social interaction. Hospitality experiences can offer this much more authentically than products.
These memorable experiences have a lasting impact and create a deeper connection with customers, cementing emotional attachment and loyalty. Shareability in social circles, often through social media, can further strengthen the brand’s reach and engagement. In April 2023, when the Prada Caffè opened at Harrods in London (a little reminiscent of Ladurée), a viral TikTok reel showcasing the cafe recorded 220,000 views within 24 hours of its posting. Comparisons were made to similar ventures, such as the Dior pop-up café that had opened at Harrods the prior year. Last year’s inauguration of the Dior Seine Cruise Ship with spa services is another example of experiential immersion with a fashion brand.
Download "The World’s Most Iconic Experiential Luxury: How Leading Brands Are Shaping the Future of Hospitality" report.