Many in the industry have expounded upon branded residences moving down from the ultra-luxury and luxury segment, touting the benefits of expanding the addressable customer base towards those that find million and multi-million-dollar price tags to be a bit too eyewatering.
At BxR EMEA, Wyndham’s president EMEA Dimitris Manikis spotlighted a clear market gap in the middle while head of Savills’ Global Residential Development Consultancy Louis Keighley forecasted an increase in upper-upscale and upscale brands as luxury’s share of the market falls from its 69 per cent perch. They’re not the only ones talking and making moves.
Projects involving globally recognised hospitality brands are continually appearing at lower price points, with examples including Wyndham Portocolom in Mallorca from under €200,000 and Hyatt's The Standard Residences Brickell in Miami where homes start at around $600,000.
James LaVelle, managing director of estates & developments at IDILIQ Group which develops and operates Wyndham-branded residences priced between approximately €200,000 and €500,000 notes: “Particularly over the past five years, we have registered a growing number of buyers with budgets of €300,000 or less who want to shift their focus from owning a second home abroad to branded properties.”
The quality question
While these price-tags aren’t “affordable” in the traditional sense, they are a sign that the sector is beginning to broaden beyond its traditional ultra-prime audience. But do these lower prices create a risk of brands diluting the exclusivity that makes branded residence product special?
Importantly, LaVelle says that while buyers at this level are not primarily paying for prestige in the traditional sense, they are still uncompromising.
“We often see the conversation around moving down the chain inherently carries the connotation that if you move down the chain in terms of brand positioning, you move down the chain in terms of the offering. But we don’t see that to be the case. Although it's a different brand and a different price point, it's still uncompromising on quality, finish, standards and what the brand offers,” LaVelle says.
And Hyatt recognises this, with the company’s global head of branded residential Tina Necrason rejecting the idea that accessibility and prestige are mutually exclusive.
"The strength of branded residences comes from the experience and trust associated with the brand, not simply the price point," she says, adding that the company’s expansion into lower price points is about providing a premium product while still recognising evolving consumer expectations and a changing buyer profile.
“Supported by a generational wealth transfer, we are seeing interest from younger buyers and first-time branded residence purchasers who are highly intentional about how they want to live,” she says.
Understanding the buyer
Significantly, these buyers are buying into a larger lifestyle ecosystem, seeking an experience built around community, connection, and the post-Covid way of living and working.
This evolution is changing what buyers are purchasing, how they’re purchasing and how they’re using the product. Unlike the ultra-prime market, where purchases are often cash transactions by very wealthy individuals, IDILIQ increasingly serves what LaVelle describes as smaller-scale investors and lifestyle buyers, some of whom are attracted by professionally managed rental programmes, particularly as tighter regulation has made short-term letting through platforms such as Airbnb more challenging in several markets.
LaVelle notes that while around 60 per cent of enquiries remain lifestyle-led, many owners ultimately join rental programmes after recognising they use their properties less frequently than expected.
The company now actively manages around 85 per cent of the around 3,500 branded residential units it has delivered, a move LaVelle says can be critical when seeking to ensure operational success. IDILIQ's model sees it develop manage and operate its properties rather than exiting the relationship post-sale.
"They’re really buying an operating system. Luxury becomes an invisible feeling. It's about how the owner experiences it because everything just works,” LaVelle says.
He adds: “The client's journey with us doesn't end the day we give them the keys. That's really the start of the journey."
Hyatt's approach is to tailor different residential products to different customer segments while maintaining consistent hospitality standards across the portfolio.
“The focus is always on delivering the core elements that define a Hyatt experience: thoughtful design, genuine hospitality and personalised service,” she explains.
This is strategy is obvious across Hyatt's residential portfolio. Resort-focused developments such as Park Hyatt Los Cabos Residences target highly affluent buyers seeking exclusivity while projects like The Standard Residences Brickell are positioned around a more lifestyle-oriented audience attracted by flexible living, coworking, social spaces and community.
The proof in the pudding
For developers, perhaps the most compelling evidence lies in the sales data. LaVelle notes that for the Wyndham Grand Costa del Sol, 15 residences priced between €1.1 million and €1.6 million took between nine and 11 months to sell. Meanwhile at the Wyndham Portocolom in Mallorca priced between €200,000 to €300,000, IDILIQ receives about 95 enquiries a week.
“There are 124 units in the Mallorca project and we're 75 per cent sold out in seven months,” he says.
Those figures strongly suggest that broadening the buyer base represents a more scalable commercial model. Instead of relying on a relatively small pool of ultra-high-net-worth buyers, developers can tap into a significantly larger audience.
Both Hyatt and IDILIQ ultimately arrive at the same conclusion from different directions. For Hyatt, branded residences are lifestyle ecosystems targeted at different buyer cohorts, and for IDILIQ, they are professionally managed hospitality platforms that remove the operational burdens traditionally associated with second-home ownership.
Either way, the audience marketed to, and by extension, the product itself is changing. Luxury branded residences will continue to command multimillion-dollar prices in certain destinations. But the future will definitely see a significant expansion towards a much broader pool of affluent buyers who are seeking a slightly different type of product.
Moving forward, Necrason says growth will likely come from a wider range of destinations and resort markets, and from buyers who are prioritizing wellness, community and lifestyle-driven living more and more.
She notes: “This includes Thailand, Vietnam, Australia and Japan in Asia Pacific, plus Saudi Arabia and the UAE in the Middle East which continue to invest heavily in tourism and mixed-use communities.”