Lifestyle, Boutique and Affordable Luxury

What is impressive is the blurring of boundaries between luxury and lifestyle, and that they now seem to coexist in one shelf-space. Luxury used to be defined as specific guest amenities, room sizes, service levels and product quality; now it can be determined by the guest experience and rankings. A “five star” hotel is no longer even mentioned as part of a description when guests talk about a luxury or lifestyle hotel experience.  Hotel service culture is being questioned – what is a luxury experience? The formal greeting at a Four Seasons or the informality at an Edition hotel?

From an investor perspective, the informality of guest service levels and the flexibility around product specifications potentially make lifestyle hotels a more compelling proposition, as they allow for potentially lower overall investment and higher operating margins than classical luxury hotels.

Luxury is also no longer confined to the top end of the hotel spectrum, as we have seen the emergence of “affordable luxury” with brands such as CitizenM, Moxy and Mama Shelter, whose parent companies’ position the brands at the top-ends of their respective categories.

It is clear that the entire definition of luxury is being shaken-up, by both the consumer and investment communities. It is expected that this blurring of boundaries will only continue, as it will be in investors’ interests that consumers are prepared to pay a premium to experience hotels and brands which outperform, versus the amount invested.

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