While meeting the demands of the current luxury market is hard enough, hoteliers are being urged to turn their attention to the emerging Generation Z and their vastly different expectations.
Mandarin Oriental head of development, Americas, Tiffany Cooper argues with this group being well into their 20s, they are becoming increasingly affluent and a market worth considering.
However, she adds they are completely redefining the idea as to what makes a good holiday and luxury hoteliers must learn how these changes if they are to remain relevant.
Cooper says: “It used to be you would go on vacation and you’d sit and have cocktails on the beach and read a book, or the men would go to golf and the women would go to the spa.
“That has really fundamentally changed and shifted and the younger generation is actually moving away from drinking in general for this social sober thing. It’s important to stay abreast and be aware of these trends.”
She adds Generation Z’s impact is being felt far beyond the bar too as they help drive the demand for sustainability while even their love of wellness extends far beyond traditional focus on the physical and encompasses the mental and spiritual too.
Cooper says; “It’s really important to know what these trends are because as you try to grow your portfolio, you want to make sure you’re building to these standards for the future.”
Corinthia Hotels chief executive Simon Casson agrees that while hotels need to cater for this changing demographic, they need to maintain their core brand values that have created their success.
He adds: “It is incremental change but you have to hold on to the traditions … and consider how they maintain their relevance today.
“The best way is to ask questions, listen to the customers, listen to the developer and listen to who you want your future guests to be that are coming demographically through the pipeline.”
Renovation innovation
Xenia Hotels & Resorts president and chief operating officer Barry Bloom believes that the right renovation provides one of the best chances to redefine a hotel and pitch it towards the luxury market.
He cites the example of the $115 million recently spent on the two-year renovation of the 40-year-old Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch.
He adds when it reopened in November 2024 as the Grand Hyatt Scottsdale Resort, it could be pitched at the luxury market thanks to the changes made.
Bloom says: “We looked at everything we could do in that building to make it more valuable than it was and drive the right return on investment.
“We were in a market where the competitors were all pushing and driving rates far in excess of where we were and that we had an opportunity to do so too by completely redoing the property.”
Marriott International chief development officer Dana Jacobsohn agrees, adding: “What is really important is that the brands are pushing the owners to keep the hotels relevant and we are doing that.
“Over 50 per cent of the Ritz Carlton portfolio is under, has been renovated or will be under renovation. We have to listen to the customers and to the trends and we’ve got to make sure we’re always innovating.”
Join our club
Meanwhile, HEI Hotels & Resorts chief operating officer Rachel Moniz adds luxury hotels can reap the financial benefits of ancillary products such as membership clubs, as HEI has recently done with a hotel in California.
She says: “The club experience is actually a huge part of the business plan and a huge part of what makes the economics work in this particular hotel.”
However, Moniz admits there is still a balancing act to maintain, adding: “Clubs can be tricky because of the membership component that’s so important because you count on those dues every single year and the club member can be a little put off by a hotel guest coming into their space that they’ve paid a membership for.”
Jacobsohn agrees that offering more than simply the core hotel product can be a good way of driving revenues and growing the brand, providing it is the right fit.
She says Marriott’s Ritz-Carlton Yacht Collection is just one example of this, adding: “We have a tremendous branded residential business model which makes our customers more loyal and we’re getting into branded luxury tents and camping in Africa.
“We think the more branded adjacencies that we can do, as long as we do them right, is just as creative for our customers.”
All those quoted in this article appeared on stage at IHIF, held in New York, USA, between 31 May – 2 June 2025, in a session called: Luxury reexamined: Powering returns in high-end hospitality.