Luxury travelers have long been associated with a preference for opulent physical assets in hotels for an unparalleled experience. However, recent insights from the MODIV Mindset survey and other sources reveal that this is no longer the case. In 2023, consumers are prioritizing personalized, unique experiences over physical luxuries.
To many consumers, luxury has lost its meaning due to oversaturation and blurred lines of just what the luxury experience is.
According to MODIV Mindset, luxury travelers are willing to trade a few physical luxuries for more personalized experiences. They prefer customized interactions that reflect their lifestyle, interests, and align with their values and beliefs. As such, luxury brands should focus on forming partnerships with local services, tastemakers, and creators to leverage the community experience and enhance the luxury travel experience of their guests.
The Personal Touch
According to Forbes, luxury today “all hinges on personal relevance.” (Forbes).
Going so far as to label luxury a “cultural construct,” experts suggest the preference for owning luxury goods is on the way out, instead making room for a desire to create “feelings or states” of luxury.
Design may take center stage in creating this desired atmosphere.
Recent MODIV Mindset data revealed a staggering “88% of luxury travelers are willing to spend “significantly more” on a luxury hotel they feel has a strong design point of view that they can’t find anywhere else.”
Luxury is an evolving, fluctuating standard and experience. 2024 will demand luxury brands understand what they can do flawlessly – for whom – to secure preference. Those on top remain so due to their consistency, clear vision and little fluctuation when it comes to what their customers can expect.
Culturally Savvy Sales & Marketing
Sales and marketing in the luxury sector need to evolve to address the cultural depth luxury consumer’s demand. The best hotels are moving beyond traditional marketing to creatively place brands in culture and cater thoughtfully to subgroups and interests.
- Cultural partnerships, positioning, and programming can create a halo effect that drives rates and perceived value for a property. Hotels can earn a place in the cultural conversation by having an active role in important topics related to guests' interests.
- Content marketing also plays a crucial role in elevating brand touchpoints and aligning them with brand values and propositions.
Strategic Partnerships: Where Fashion Meets Hospitality
The hospitality sector is seeing increased numbers of luxury fashion and lifestyle brand collaborations trying to siphon the “experience economy.”
- Examples include the rise of the Bentley Suite and Dior Suite at St. Regis NYC, and established fashion houses such as Bulgari and Armani developing their own “luxury” hotel portfolios.
- 2024 will see more of these collaborations pop up around the world, as luxury players capitalize on combined brand equity.
The influence of technological advancements and the rise of digital platforms indicates the importance of expanding luxury hospitality's digital transformation efforts.
- Luxury brands can drive revenue growth by focusing on direct bookings and digital transformation. MODIV Mindset found that more than 40% of affluent travelers book their trips online. Moreover, luxury hotels can leverage cultural partnerships, content marketing, and aligned brand values to create a unique and memorable guest experience.
- The multi-day tour industry is still in the early stages of digital transformation, suggesting tremendous opportunities for innovation and digital growth. Similarly, the tours and activities sector is seeing rapid digital recovery, with many small operators trying to maintain their market share against the largest players.
Changing consumer preferences in the luxury hospitality space require a proactive approach from industry players. Brands that prioritize personalized and unique experiential luxury services, become tech-savvy and seek meaningful luxury brand partnerships stand to gain a commercial edge and long-term customer loyalty.