The Luxury Hotel Edition

Colin here. A ticking time bomb is lurking in the heart of luxury hospitality. It hasn’t been very well-acknowledged in the maelstrom of financial analysis, or endless speculation about recoveries. Also, in many ways, it has been covered up by the sky-high prices that properties have been commanding as people return to the road and to vacation. But brands that have had storied reputations, an air of prestige, and great reviews, are shells of their former selves. While they occupy prime real estate and still show up in the right neighborhoods and arrondissements, they have changed. Put simply, a lot of properties are not living up to the mystique and equity they have built over time. 

There are several reasons for this. A lot of people dedicated to the craft of hospitality simply didn’t return after being shown the door in the pandemic. They were left high and dry. The backbone of these properties, alongside all of the beautiful linens and floral arrangements, are the people. And many of the best aren’t coming back.

And while we all know there are countless briefs out to ad agencies seeking to stimulate hiring and the allure of hospitality careers, some very deep damage has been done. 

Why is this interesting? 

First, it means that just like in Men in Black when memories are erased with a little flash of light in the eyes, countless years of brand equity, reputation, and reviews are being pushed out of the public consciousness. For many people, today is a blank slate where all relationships, preferences, and loyalty in luxury need to be re-examined and rebuilt. 

There’s a case for travel advisors again: the select few that continue to kick the tires with rigor and know what is exactly good right now. The value of boots on the ground due diligence from advisors for their clients is even more essential than it used to be. The luxury resort that was a no-brainer for decades still looks good on the website, but an advisor knows they are down by 30% staff and their kitchen has been decimated. 

On the brand side, it also means that a lot of new, valuable customers are up for grabs. On the marketing side, luxury properties need to move beyond these broad, boring platitudes and really drill down into hyper-unique value propositions. More so than ever, properties and brands that have a heartbeat, have a purpose and have a bit more soul have the ability to win share from some of the big, established brands who have lost their way and continue to peddle boring 40,000-foot narratives about “re-connection” and other empty promises. 

Right now, it is time for challengers to make a play to convert customers aggressively. This is obviously done through the courting of the travel trade and marketing spend, but it also comes from generating old-fashioned word of mouth and hustle. New ideas and new approaches today create a disproportionate amount of leverage. 

Luxury is completely being rebooted. Priorities have been realigned (as we have heard ad nauseam). But the sooner that luxury hospitality brands consider they need to start as if it is day one, and not coast on old, storied reputations or the ghosts of great reviews past, the better they will be positioned to win the future. (CJN)

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Thanks for reading,

Noah (NRB) & Colin (CJN) 

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