The range of high-end hotels in cities such as Dubai, Abu Dhabi, Doha, Cairo, etc., has expanded over recent years, to the extent that those seeking a luxury hotel experience are now faced with more options than those looking for something cheaper. But the luxury hotel definition is blurring and what customers are looking for in this segment of the market is increasingly varied. So what defines luxury in today’s hospitality sector?
Luxury Hotel Definition
What makes a 5* hotel? There used to be a clear difference between mid and high end properties and there was a well understood star rating system to help customers know what to expect from a particular property. This is no longer the case and there has been a move away from the star rating system by many industry players. Nowadays, luxury hotel definition is formed around the customer experience, not just the rating. Many hotel operators today prefer to brand their projects as ‘luxury’, ‘upscale’ or ‘mid market’, rather than 3, 4 or 5 star. In more recent times with the large number of brands available in the luxury hotel market there has been a blurring of the factors which differentiate brands in these categories.
Part of the movement away from the star grading systems is the problem of defining exactly what should be expected from a particular grading. The offering within the same star rating has become far from uniform as hotels increasingly seek to provide an experience, rather than a predetermined range of facilities. You could say the emphasis has switched from the hardware to the software, with the difference between properties being more focussed on the quality of the experience offered rather than the size of the TV’s or the swimming pool. A wall mounted flat screen TV and an extra throw pillow could be all you would notice from one star rating to the next.
Under the traditional approach, the physical differences between the star ratings varied between cities but could generally be defined and found online. A 5 star luxury hotel definition in a certain city may be differentiated from a 4 star hotel in the same city in terms of the amenities offered ( such as having a 24hr multi-lingual reception, a safe in the room, a mini-bar, etc). The problem with this approach is the difficulty of quantifying or defining a certain level of service or experience. Standard determines the difference between different hotels in the mind of a customer. It is the experience that now defines the level of luxury and therefore the pricing and attractiveness of any particular hotel.
The memory is as important as the experience
Today it is much more a question of how far the hotel staff are prepared to go to meet the (often unreasonable) requests of guests. With such fierce competition hotels must treat guests as individuals if they are to retain business. Many leading operators are already creating detailed profiles of their regular guests. Reception staff know what guests will arrive and how to greet them. Room service already knows their dining preferences, etc.
Nevertheless, the guest experience is not only defined by how the hotel staff interact with guests but how the hotel is able to provide an environment that will create an experience that becomes a memory. This can be through unique hotel F&B services, one off private dinners, interaction with the GM through cocktail evenings or integration with local surroundings giving guests a local flavour to their experience. Digital connectivity is also an important part of an experience in the modern world, allowing guests check in the comfort of their room, ability to play music wirelessly, wifi across the resort and the ability to open their rooms with smart phones.
Many 5-star hotels on the market are able to be on par with luxury hotels in terms of facilities, location and size of rooms but what truly separates a luxury hotel is the overall guest experience creating memories that will define their future selection for location or brands. In the end we have seen the importance for a luxury hotel to be truly defined as luxury is to leave a lasting experience with each guest and this should be through a variety of factors.
About JLL: Through every phase of the hotel investment and operating cycle, we offer leading luxury hotel market advice and apply a broad spectrum of hotel valuation, brokerage, asset management and consulting services. We have helped more luxury hotel investors, owners and operators achieve high returns on their assets than any other real estate advisor in the world. For more information on luxury hotel definition or consultancy services, contact our Hotels & Hospitality team.
Author: Marko Vucinic
Marko has more than 11 years of consulting industry experience focused around Hotels and Commercial Real Estate. Marko is responsible for managing JLL’s Hotels & Hospitality business and the delivery of services to clients, such as investment & development advisory, search & selection, valuations, strategic advisory and asset management.