BoF Opinions | How To Capitalize On The Lasting Appeal Of Famous Luxury Hotels

If recent announcements from the airline industry are anything to go by, the global travel and tourism sector is expected to grow exponentially in 2023. That’s good news for the top industry whose advertisers are entering $4.3 trillion.

While the expansion of many fashion companies often connects with customers at home – which was very important during the pandemic – there are now new opportunities to participate in customer journeys to hotels and resorts.

The authors of BoF Insights’ latest report, The Lifestyle Era: The Most Valuable Opportunity in Home and Hospitality, show how hotels are becoming an integral part of many luxury sports books.

Why do hotels play a bigger role than they used to in increasing luxury?

In line with the growth of the travel industry, sales generated through luxury hotels this year are expected to reach $600 billion worldwide, up from $494 billion in 2022, according to Euromonitor International.

But for many brands, making money is not the main motivation for their hotels. Consumer research from BoF Insights underscores the potential growth in sales growth can provide along with sales opportunities. For affluent consumers surveyed by BoF Insights, a visit to an iconic hotel can have a lasting impact, often influencing future decisions. About 80 percent of the people who were asked said that when they stay at a hotel or a building associated with a certain brand, they can buy high-end fashion or household items.

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For some brands, there is another benefit: providing an additional space for their customers that is superior to a store that aims to be personalized and memorable. At Boucheron’s private house in Place Vendome in Paris, a select few guests are invited each year. Guests receive a white-glove experience that goes beyond the on-site jewelry experience, with concierges and caterers to organize parties and events at select locations.

As Hélène Poutin-Duquesme, head of Boucheron, observes: The house “is about to awaken the imagination and experience something that will live forever. … [It] it is interesting but not scary. You understand that you are in a private French house, not just any showroom – you are at home. “

What other strategies are luxury brands pursuing to expand their hotels?

While few brands have the luxury of access to boutiques to offer exclusive, VIP amenities like Boucheron’s, there are other ways hotels can offer a brand exclusive to their customers. And many of these add-ons are built into licensing agreements with host businesses or affiliates.

In some cases, this allows designers to use home symbols and decorations to decorate the suites and other interiors with the hotels they own, to put home accessories in the rooms to match their furniture, linens and other textiles, or even room and travel fragrances. of foreigners. experiences. For example, Gucci has partnered with the Fairmont Hotel and Resorts’ Savoy Hotel in London to give visitors to London a taste of the city. This includes creating a collection that showcases products from furniture and home decor that emphasize urban development with views of the River Thames and skyline, along with drivers and other special services for visitors.

Other brands go further, and open well-known hotels under their own names. One brand that has been adopting this approach is Bulgari. After entering into a partnership with the Ritz-Carlton Hotel Company in the early 2000s, the jeweler opened its first hotel in 2004 in Milan, followed by another one near Hyde Park in London in 2012. Today, it has eight hotels, who have a list of openings planned for the next few years in Rome, Miami Beach and Los Angeles, as well as a resort in the Maldives.

Other brands are now changing the look of hotels and leading entire buildings, often in mixed-use areas that include shops, restaurants and other opportunities to showcase the brand, such as spas. Last year, Dolce & Gabbana announced the construction of two buildings in Miami and one in Marbella, Spain, through local partners Sierra Blanca Estates, and is collaborating with Saudi property developer Dar Global to create a landmark hotel in this area. Maldives. The announcement followed the creation in 2022 of a new beauty section and the launch of the “Casa” home collection.

What are the most important factors in hotel expansion?

A common theme for cutting successful hotels is good – starting with the contracts and agreements they enter. As in all industries, top players face reputational and other risks by joining businesses that put their products front and center. A well-chosen partner helps ensure that the hotel experience associated with the brand matches that of the brand.

Along with the company’s technology, execution becomes more difficult as the size of the investment increases. Clear alignment where technical areas are kept in-house also helps brands manage sales. For example, Ritz Carlton, Bulgari’s partner in hotels and resorts, supports employee training while Bulgari manages other functions, including sales, marketing and public relations.

Ultimately, successful hotel accessories capture the brand in a way that makes sense to customers. “It’s about making sure you’re relevant to the hotel’s guests, and then, how does that fashion brand translate into the hotel?” said Jenni Benzaquen, managing director of Design Hotels and senior vice president of EMEA brand portfolio at Marriott International, which is the parent of Ritz-Carlton. The main goal, he added, is for the product to “become part of the memory of the trip, so that when the visitor goes home, you have a better mind when it comes to shopping.”

For more information and information on how to start your home and hospitality business, buy the full report.