It’s harder than ever to open a new luxury hotel. Interest rates and construction costs are high, so even the projects that do move ahead take longer than expected to finish.
On one hand, that means fewer new hotels entering the space, so nightly rates are going even higher. But on the other, it puts major pressure on hotel owners to renovate and refresh existing hotels to provide something new to longtime guests. This often means new restaurants, outside-the-box experiences and revitalized guest rooms and suites.
The recent International Luxury Travel Market conference in Cannes, France, showed some of the leading trends in luxury hotels heading into 2024. Here are a few of our takeaways.
Beefed-up experiences
Luxury hotel brands, in general, don’t add waves of new hotels in the best of business climates. But financing trends nowadays make it harder than ever to expand into new markets. When a brand can’t add a slew of new properties, suddenly the existing hotels in its portfolio must shine brighter than ever before. This means providing returning guests with new experiences alongside lofty room and suite buildouts they haven’t seen before.
The Peninsula New York, first opened in 1905, is undergoing a phased renovation in 2024 that will see new carpets and wall fixtures as well as a brighter Palm Court restaurant. The hotel’s rooftop bar will get more of a loft vibe with an anticipated finish by September.
The guest roster at the Waldorf Astoria Maldives Ithaafushi relies on 65% repeat business — including its $90,000 per night private island that is a favorite of Beyonce and Jay-Z. Having such a high level of repeat guests means the resort has to constantly find new ways to keep things fresh, from the food served to the guests to the cocktails mixed in the bars.
“I find it extremely luxurious to be working for us because how do you please a billionaire? How do you please someone who has everything?” TJ Joulak, general manager of the Waldorf Astoria Maldives Ithaafushi, said. “You touch the heart. It’s the experience.”
The luxury juggernaut that is Marriott
All signs point to a major tailwind for luxury travel at Marriott International in the new year. The world’s largest hotel company hosted a breakfast at ILTM showcasing all the metrics that give Marriott leadership confidence in their luxury travel sector heading into 2024. Further, signs point to a luxury hotel expansion around the world.
There is an anticipated 38% increase in global wealth by 2027 — reaching $629 trillion, according to data provided by Marriott’s luxury group. Additionally, 30% of the world’s wealth is expected to be in emerging economies in the same timeline. But demand for luxury hotels is outpacing supply: Demand is expected to grow by 11.4% by the end of 2025 compared to only a 4.5% increase in supply.
Daily Newsletter
Reward your inbox with the TPG Daily newsletter
Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts
How’s Marriott catering to new luxury travelers? The hotel company leadership team pointed to newer offerings like the Ritz-Carlton Yacht Collection, bringing brands like Ritz-Carlton Reserve and St. Regis and Edition to Saudi Arabia, and an expansion of the Luxury Collection hotels in markets like Nara, Japan; Tbilisi, Georgia; and Bali, Indonesia.
IHG’s luxury liftoff continues
The big news at last year’s ILTM was IHG’s massive conversion of the Carlton Cannes from InterContinental affiliation to Regent Hotels & Resorts. While the Carlton Cannes, a Regent Hotel, opened earlier this year, it was the first time many in the international luxury travel press had a chance to see the property. The belle epoque architecture of the hotel shines brighter than ever on this stretch of the French Riviera. It’s also a major bragging right for IHG’s ongoing luxury and lifestyle expansion.
We’ve covered this extensively, but our eyes are keenly set on IHG this new year to see if it can build off its recent momentum with Six Senses and Regent and hold its command on luxury. A brand refresh for InterContinental was announced at the end of the year. Let’s see how that plays out.
Luxury hotels take a while to get off the ground
If there’s one thing guaranteed in the luxury hotel orbit, it’s that planned opening dates are mere suggestions rather than firm timelines — especially in recent years. Raffles Boston and Raffles London at the OWO both faced significant timeline delays over the span of the pandemic.
The completion date of the ongoing overhaul of the Waldorf Astoria New York, closed since 2017 for renovation, is up for debate. (Hilton says the end of 2024, but sources also told the New York Post it might be 2025.) Eight years still isn’t that bad compared to The Peninsula London, which opened this year after a whopping 35 years in the making. Teams spent 25 years finding the right location in London’s Belgravia neighborhood and then another decade from when the deal was signed.
Good things and opulence come to those who wait.
Geopolitical tension
ILTM wasn’t entirely about the decadence and refinement that comes with a luxury hotel stay.
An opening night presentation from Tina Fordham, a geopolitical strategist and advisor for corporations and boards of directors, offered a bit of a wake-up call for the industry. She called for the industry to stop keeping its head in the sand regarding the reality of simmering tensions around the world moving to boiling points. This applies to areas like Ukraine, Israel and Gaza.
While Ukraine did not have as much of an impact on willingness to travel (Russian airspace may have closed, but European travel demand was still sky-high last summer), the tension in Israel and Gaza has, Fordham said.
“We’re already seeing how the conflict in the Middle East has impacted, among other things, U.S. willingness to travel abroad in a way that the conflict in Ukraine did not,” she added.
The upcoming election cycle in the U.S. and other countries worldwide, as well as a potential Chinese invasion of Taiwan, also threaten the geopolitical landscape. The travel sector should be mindful of that. Still, there is also an underlying message of all the uncertainty: Get out and visit your bucket list destinations sooner rather than later. The last few years have demonstrated how quickly things can change.
“I wonder how many [travelers] are thinking similarly about making sure you take advantage of the opportunity to go see things before there are more Brexits, before there are more conflicts and other factors that might curtail your freedom of movements,” Fordham said.
Related reading:
