What is luxury? That was the big question at the second Luxury Hospitality 2014 Conferencethat took place in Athens on October 13th and 14th at the Hotel Grand Bretagne. Has what we think of as luxury changed? And should the luxury hotel market be adapting too? The shift from the offer of luxury as status symbol to unique personal experience appears to be driving an upturn in the industry, and demands a transformation in the way hotels deliver their brand experience.
Jointly organised by the International New York Times and Ecole hôtelière de Lausanne, the two-day event brought together international delegates and renowned speakers in a destination that could not have been more fitting. Athens lies within the Eastern Mediterranean, a region that continues to make a strong contribution to Europe’s status as the holiday destination of choice for 55% of today’s global travellers.
The opening statement from host Varun Sharma paved the way for the agenda that followed, as he described the major impact that the luxury niche, diametrically opposed to mass tourism, has on the global tourism industry as a whole. 10% of the world’s luxury travellers currently contribute 20% of total travel and tourism industry revenues.
Measuring the online appetite for luxury
There was much to support this view of luxury travel’s contribution to the global tourism industry. The 2014 World Luxury Index Hotels, developed by Digital Luxury Group in partnership with Ecole Hôtelière de Lausanne and presented by CEO and founder David Sadigh and Prof. Samad Laaroussi, revealed that through an analysis of 485 million online searches on 70 hotel brands in 20 markets, online interest in luxury hotels increased by 7.7%* compared to the last 12 months. With 50% of search deriving from the USA market, it comes as no surprise that homegrown names such as Hilton, Starwood Hotel & Resorts and Hyatt came up as the top three most searched hotel brands. Dubai-based luxury hotel brand Jumierah Group proved to be the most popular hotel brand in Europe.
Focusing on the Mediterranean, Rome (+12%), Barcelona (21%) and Istanbul (-9%) were the most desired destinations, even with Turkey’s current political unrest. Athens only represented 2% of total interest, but a 29% increase compared to the same period in 2013 indicated positives signs of a slow but reassuring recovery out of recession for Greece.
The experts’ perception of luxury
But are there enough luxury hotels in Greece to see this recovery continue? This was the question posed by Liz Alderman, chief European business correspondent of the International New York Times to Dr. Andreas A. Andreadis, president of SETE (Greek Tourism Confederation). She pointed out that the country has a low 4% of 5-star luxury hotels. “We need to focus on what we have, rather than what we don’t have,” responded Andreadis. “Luxury shouldn’t only be seen in the top end, as it exists also in the bottom end too.” And indeed, the large number of successful independently-run boutique hotels and guest houses that scatter the Greek islands and mainland show that luxury isn’t delivered solely by large brand names.
Timo Grünert, CFO of Oetker Hotel Management Company, who operate 15 hotels, including Hotel du Cap-Eden-Roc and Brenners, believes that the sense of sophistication that goes hand-in-hand with luxury usually starts with the big brands, but that over time, luxury travellers tend to become more curious and look for smaller niche brands. Grünert used Hôtel Costes in Paris as an example.
Tonino Cacace, partner and chairman of Capri Palace, pointed out that luxury means different things to different people: “One can buy an expensive pair of shoes and say its luxury,” he said. “But luxury can also be having no shoes, and instead walking around barefoot in a hideaway spiritual retreat.”
Nick van Marken, global head-hospitality of Deloitte LLP, commented that working in luxury hospitality has become more complex. “Luxury doesn’t have the same traditional meaning any more,” he said. “The importance of design within a hotel has taken centre stage in order to capture the attention of the millennial traveller. Thanos Michaelides, managing director of Thanos Hotels, added that luxury travellers want to invest in experiences that create memories, and that discretion is everything.
Grünert believes that the current challenge for hotels is making the shift from luxury as a status symbol to luxury as an experience. This was supported by Kerry Smith, editor in chief of British Airways Magazine, High Life, who said that its readership – ‘Generation Curious’ – are travellers who want to get underneath the skin of their destination. As a result, its editorial strategy revolves around “state of mind rather than status.” She added that, “Luxury is not a cold-hearted product and that’s not how we present luxury in High Life – we present it as an experience.”
Music boxes and cigars
What do music boxes and cigars have in common? They’re examples of a new definition of luxury in the hotel industry that uses the individual and the memorable to delight customers.
The elegant creations of Swiss music box makers Reuge are beginning to replace the traditional welcome basket of fruit and champagne. The Hotel Grande Bretagne Athens features a Reuge music box in its Royal Suite, a unique piece of interior design that builds guest loyalty through identification. “Guests in these suites are used to top luxurious items. However, finding a music box is a special and positively welcome surprise that isn’t found in any hotel room,” said Kurt Kupper, CEO of Reuge.
Elsewhere, cigars are replacing the more usual chocolate gifts. Eddie Sahakian, owner of luxury cigar brand Davidoff of London, spoke about offering the ultimate experience of a complimentary cigar and the chance to smoke it in a cigar lounge, a concept which has proved very successful in hotels such the Bulgari and the Wellesley in London.
Varun Sharma drew an interesting conclusion from the conference; that finding a single definition of luxury seemed impossible. A cause for concern, he thought. However, if luxury has its own personal meaning for every individual, this offers the hospitality industry an endless melting pot of opportunities to be creative and engage with the ever-increasing number of global luxury travellers.
*Data period: July 2013 – June 2014, Comparison Period: July 2012 – June 2013