Niche guest experience concepts are attracting significant interest from hospitality investors and developers.
Rather than opening a hotel and trying to attract everyone, there is a newfound focus on targeting audiences with special interests and aspirations, especially in the leisure market.
Gonçalo Rebelo De Almeida, CEO of Vila Galé Hotels, the second largest hotel group in Portugal, explained: “If you have a purpose, a specific experience, it’s easier to get the right customers for that product, to meet their expectations and probably to surpass those expectations. You are more aligned with the guests and then you focus all the decoration, the offer, the spaces, and the staff around that purpose or that motivation.”
Brett Gregory-Peake, managing partner, Liaison, added: “It’s about creating a motivational factor that really focuses on the passions of individuals to achieve repeat business and extended stays.”
Health and wellness
The market for wellness products and services is enormous and wide-ranging. However, instead of offering another generic spa product, hospitality firms can target an audience with a particular attitude or interest. Hotel brands like Equinox and Siro, for instance, are targeting people with exceptionally high aspirations for their personal fitness.
“Our holistic approach to hospitality is engineered to ensure you are at your peak, physically and mentally, throughout your stay in New York’s healthiest hotel,” claims Equinox Hotels, part of the US luxury fitness company with 300 gyms.
Siro Hotels, created by developer and operator Kerzner International, has sites in Dubai and Montenegro and is an official hotel partner of AC Milan. Its website says: “Siro is an immersive lifestyle destination. Using integrated digital technology and world-class specialists, our hotels enable guests to unlock peak mental and physical performance.”
In another example, Sleep & Nature Hotel Rural in the Alentejo region of Portugal is aimed at guests who wish to improve the quality of their sleep. The hotel is operated by Amazing Evolution, a hospitality management company that developed the concept too.
CEO and founder of Amazing Evolution, Margarida Almeida, said: “We are very much focused on our guests because if we have happy guests, then, sure, we will have happy owners. For each property we choose a different experience.”
Alentejo, a vast and sparsely populated rural region of Portugal, has also been a successful location for Vila Galé when creating destination hotels and exercising greater guest segmentation.
On a large farmland plot, the hotel group has three separate properties: a destination resort for families with children (Nep Kids); another with 20 rooms for couples to enjoy relaxation in the countryside; and the original farmhouse with an enhanced focus on wine and gastronomy.
Rebelo De Almeida commented: “Before we opened these two new products, all the guests were in the same resort and sometimes it was a mess. Now, at one or two kilometres from each other, we can put the right guests in the right product.”
Management and owners working together.
In 2018, a hotel owner contacted Margarida Almeida to look at a property that was struggling financially. The owner believed proximity to the sea was a selling point, but Almeida did not agree. “I cannot see the sea. It’s 30km away. What I see and hear is Algarve International Racetrack, so let’s push the motorsports experience.”
With a relatively modest investment in FF&E, the hotel was given a motorsports-themed makeover and renamed the Algarve Race Resort. Now reporting year-round 90% occupancy, Almeida said: “We are in our sixth year and the owner is very, very happy and the lender too. So that's what we like to do.”
Immersive experiences are a way for a hotel brand to differentiate itself in the ultra-luxury segment, explained William Dowling, development, Virgin Hotels. At the brand’s properties in Kenya, guests can enjoy wildlife trekking, star-gazing and tutoring experiences with the local tribes.
“The consumer is willing to spend more because they're not just spending on a hotel and a F&B experience. They leave feeling better and they leave feeling different,” he said: “We're absolutely open to partners and owners who have innovative ideas that might not be accepted by other hotel operating companies around the world. We feel it's in our DNA to innovate. By giving immersive feelings and disconnecting from technology, we believe that type of experience is what is going to drive higher rates and occupancy in our properties in the future.”
Hotels catering to niche guest segments need to do their research and find or develop suitable properties, said Rebelo De Almeida. He added that having a varied brand portfolio that caters to different interests at different times of the year was a successful way to increase guest loyalty and customer lifetime value.
All the above quotes were taken from the R&R Forum 2023 panel: Monetising the Intangible: The ROI on Experience