In the 21st century, the ultra-luxury hotel segment has been sustained by an unprecedented increase in personal wealth.
In 2000, the number of individuals with a net worth of more than $1m stood at 14.5 million; in 2025 the global total of millionaires was circa 62 million, with 2,600 new millionaires added every day, according to UBS.
Nearly half of global personal wealth remains concentrated in the US, but UBS identifies several regions where wealth is accelerating fastest. The new millionaire‑creation hotspots are South Korea, Croatia, Norway, Latvia, Taiwan, and Bulgaria.
Of course, a millionaire is not automatically an ultra‑luxury hotel customer. But what is striking in recent years is that the demand for ultra‑luxury hospitality has been driven by transient leisure rather than corporate budgets.
Personal wealth
Hotel industry leaders note that the number of wealthy individuals predisposed to spending $150,000 on a family holiday at brands like Aman, Four Seasons, Raffles, and Mandarin Oriental, has quadrupled over the past 25 years.
Francesco Cefalú, chief development officer, Mandarin Oriental, said that while corporate and MICE demand has dropped during the post-Covid years, the growth in leisure demand has more than compensated for the shortfall.
“It used to be that if you were a partner at Goldman Sachs or McKinsey, you’d stay in luxury hotels. Not anymore. But leisure has just exploded,” he said.
Even in a historically business-oriented city like Milan, 75 percent of customers at the Mandarin Oriental are staying for leisure.
Soaring ADRs
“They say Europe is the playground of the world, and let's not underestimate the importance of having fun, particularly when you have a lot of money,” Cefalú commented. “Ultimately this matters and, luckily, it has sustained our industry and I'm confident it will continue to do so.”
Demand from leisure travellers has remained strong even while prices have soared. Ultra luxury average daily rates have climbed from $800-900 in 2015 to $1,500-$1,600 today, noted Paul Kapiris, director, Eastdil Secured.
Even though rates have gone up, the proportion of luxury customers who are not millionaires has increased significantly to around 30 percent.
Dominic Seyrling, managing director, Archer Hotel Capital, commented: “It shows that
people place more value on experiences, whereas previously the willingness to spend was not quite there.”
Generational transfer
The rise in rates isn’t simply a case of luxury brands pushing prices higher, argued Cefalú. Rather, the entire cost base of hospitality has undergone price inflation - labour, energy, construction, and operating costs – and pushed rates up across the board.
The price difference between luxury and upper‑upscale has narrowed in certain markets, he said, leading some customers to upgrade.
The transfer of wealth from one generation to the next means demand for ultra luxury experiences will stay strong, said Tina Yu, partner, KSL Capital Partners: “As wealth gets transferred to the kids, they are even more predisposed to spend money on travel and leisure because they view it as a status symbol and an expression of who they are.”
Institutional capital
While the number of millionaires is increasing, the richest people in the world are also getting richer.
Data from the US Federal Reserve shows that the one percent wealthiest Americans own 30 percent of US net worth, the highest level ever recorded.
This has encouraged institutional investors to see ultra luxury hospitality as a source of stable returns, Yu said: “The top 1 percent in the US is a great, resilient consumer to invest in. These consumers want to spend more of their wallet on travel, and that’s what investors see.”
KSL’s private credit fund for the development of US leisure resorts and luxury assets includes investments from state and county pension funds, corporate pension funds, endowments, foundations and insurance companies.
Archer Hotel Capital is backed by two large financial institutions: APG Asset Management and Guiness Investment Corporation. And Mandarin Oriental, valued at $4.2bn, is wholly owned Jardine Matheson, a 194-year-old investment company.
Cash cows and beauty queens
The entry of institutional capital into the ultra-luxury hospitality space is further supported by demonstrable profitability, added Yu.
“It’s a misconception that ultra luxury barely breaks even or is a low margin business. The majority of our ultra luxury assets do high 40 percent margins, so I think that's another light switch that investors needed to see over the last decade,” she said.
Traditionally, lenders made a distinction between cash cows and beauty queens. Historically, ultra luxury hotels were firmly in the second camp: trophy assets that might not be profitable but would not lose value. Today, they can be both cash cows and beauty queens at the same time, said Seyrling.
Stock market crash
What are the biggest threats to the ongoing success of ultra luxury hotels? “A big stock market crash is the biggest fear I have on a short-term basis. In the long run, I think part of the industry will be fine, but in the short run, if there's a significant dip of 20 to 25 percent, which history suggests happens on a regular basis, then that'd be my primary concern,” said Seyrling.
Around 45 percent of global millionaires are based in the US and half of their wealth is in liquid assets like stocks and shares, says the UBS Global Wealth Report 2026.
Yu added: “What I worry about this year and next year in Europe is a lot of the luxury rates are sustained by Americans, and Americans tend to be more skittish when they read things in the news about issues politically, and they might stay at home in terms of their choice of vacation.”
Pockets of oversupply
Europe is undoubtedly a playground for the rich, but an increasingly crowded one. Some localised markets will feel the effects of oversupply and the post-Covid jump in ADR over the next three to four years, said Cefalú.
Rome is the clearest example - a city where, until recently, only two truly luxury hotels comfortably operated at around 75 percent occupancy.
“Now Rome is in a more difficult situation. There will be winners and losers. It's just the nature of the beast. I don't necessarily see a market where everybody does 50 percent occupancy, because that is unsustainable,” he said.
New opportunities
Where are the new opportunities for ultra-luxury hotel development going to be? “The one where I think there is still a significant gap between what’s on offer in the market and demand is Lisbon. Lisbon doesn’t have great hotels, but it’s very complicated to develop,” explained Cefalú.
Although institutional investors tend to focus on cities, the ultra‑luxury guest increasingly prioritises experiences over location.
“August in European cities. That’s not the definition of luxury. It's swarms of crowds that you can't get away with from, so I think people are going to seek out more unique destinations that are a little bit more special,” said Yu at KSL Capital.
The search for the new Maldives
“Consumers probably want to know where the new Maldives are going to be, because the Maldives are becoming quite crowded,” added Seyrling.
They are unlikely to be in Europe where coastlines are effectively closed to new development: “There are no new licenses coming. The environmental concerns are a real challenge,” said Kapiris.
For travellers willing to spend €150,000 on a family holiday, new ultra luxurious destinations may be places like Antarctica or Patagonia.
Lapland provides a precedent; once a very niche Christmas holiday destination, that has evolved into a high‑priced, almost mass destination.
Mandarin Oriental is looking into the idea of multi-destination packages aimed at Americans, said Cefalú: “Europe is so developed. It’s difficult to find a genius idea. We’re working on the idea of circuits; experiences that are not just a hotel in a destination.”
All quotes taken from the panel ‘Investing in ultra luxury: performance and potential’ at IHIF EMEA in Berlin 2026. The session was moderated by Paul Kapiris, director, Eastdil Secured.