One of the things that plagues this industry the most (no, not Airbnb) is how luxury is defined. The concept has evolved from gilded ballrooms and butler service to a more experiential way to view the upper echelon of travel.
This was the topic addressed at the Differentiated and Experiential Luxury panel at the 38th Annual NYU International Hospitality Industry Investment Conference, held in New York earlier this month. Panelists included: Alan Fuerstman, founder and CEO, Montage Hotels & Resorts; Michael Glennie, president and COO, FRHI Hotels & Resorts; Ben Leahy, managing director, Goldman Sachs; and Homi Vazifdar, managing director, Canyon Equity.
Luxury is a holistic experience that comprises design, experience, and brand recognition that focuses on programming more than everything else. Here are 10 additional insights from the panel about luxury today.
1. Design has to be timeless. “Great design is a huge magnet for the ultra-luxury traveler,” says Vazifdar, but “great design supported by great service and a great sense of adventure is what makes up luxury.”
2. Play up the emotional connection. “By having that connection, you can figure out what’s important to guests during their stay,” says Glennie. “You can create experience with them. What we call surprise and delight.
3. Be Proactive. The customer has evolved and owners and operators have to catch up, adds Leahy. Beyond responding to a new demographic (ahem, Millennials), the level of service has to be there. “You don’t have to be so myopic in your outlook,” says Vazifdar.
4. But, seriously, you can’t escape Millennials. They have impact because “they have influence over their baby boomer parents who do have purchasing power,” says Fuerstman. With the money they do have, they’d rather spend it on experiences than anything else.
5. Incorporate technology. A large portion of luxury guests are incapable or don’t want to interact with only tablets and phones. At the Montage Beverly Hills, for example, tablets are available for in-room dining but it’s intuitive enough “so you don’t have to be an expert to do the basics,” says Fuerstman. Mobile, too, is a driver for wooing guests. “If you don’t have mobile, you’re losing out on a whole segment” who books travel that way, explains Glennie.
6. Human interaction still matters. Relationship building is a key tenet of the luxury segment, says Fuerstman. Adds Vazifdar: “Ultra-luxury is a highly touchy-feely business. When you walk into a lobby you need to interact with someone.”
7. Be authentic, of course. The Raffles Hotel Singapore has its own staff historian, who has worked at the hotel for the last 50 years. “When they talk about the history [of the hotel], he can bring it to life,” says Glennie.
8. Self-enrichment and giving back trump relaxation. Safaris are great, says Glennie, but people want to do more than just ride around in a Land Rover watching animals. They want to take it a step further and go to village and “contribute and help ”in some way. Guests want to come away thinking that they “can make a difference,” he adds.
9. Location is important. Sort of. It may not be a sound investment to put a super-luxury resort in a market that won’t support it, but for Aman hotels, it’s the brand that drives people to a destination. Vazifdar trusted the power of the brand to make the Amangiri in Canyon Point, Utah (in the “middle of nowhere,” he says) a success.
10. Consumers expect and want more. Fuerstman launched Pendry to combat location anxiety. The brand will open a property in San Diego “where I can’t get the same rates as a Montage,” as well as in Baltimore. But Pendry also plays into the excitement of design-centric hotels that also offer great service. In the past those two things were mutually exclusive. “Combining service with great design is the future of a large segment moving forward.”