Iconic hotel destinations are undergoing far-reaching transformations in the ultra-luxury hotel segment.
According to the recent research paper 'Evolution of Global Luxury Hospitality' by JLL, there has been an increase in global prosperity. This includes not only affluent individuals accounting for 70% of luxury travel spending worldwide, but also the growing population of UHNWIs - those with a net worth of at least $30 million.
Four fifths of UHNWIs either own a business or are C-Suite managers, so travel is rarely if ever purely for leisure. As such, time is often the biggest constraint, leading to a high demand for travel experiences that cater to privacy and connectivity. Hotels targeting this population segment fall under the category of 'ultra-luxury' and provide exceptionally personalized service and amenities, many of which are globally renowned.
Consequently, they command significantly higher room rates compared to the luxury sector in general and are situated in highly sought-after iconic destinations like New York, London, Paris, and some of the most desirable leisure and resort locations. While the average luxury rates across Europe were around €450 in 2022, ultra-luxury hotels in cities like London and Paris maintain average rates of over €1,000 per night, and some ultra-luxury resorts, even with seasonal fluctuations, have average rates reaching €2,500.
Until the turn of the century, the ultra-luxury landscape in Europe was dominated by historic hotels, many dating back to the early 20th century, which until recently struggled with the constraints imposed by the buildings constructed during that era. The demands of luxury travelers were vastly different. However, over the past twenty years, the ultra-luxury landscape in many European cities has evolved with new ownership and changing guest requirements, resulting in the opening of new hotels and significant transformations of existing historical properties.
The most thriving cities in Europe have perhaps seen the most noteworthy changes. London is currently undergoing a dramatic evolution in the ultra-luxury segment, while Paris's transformation is largely completed, and Rome appears to be the next significant luxury destination, with approximately €1.3 billion in transactions over the past four years for acquiring assets that will be converted into new hotels, many within the luxury-plus segment.
Italy has long been a favored vacation spot for the elite and wealthy, starting back in the 18th century with the European aristocracy flocking to cities like Rome, Florence, and Venice for their art and culture. This trend continued into the era of La Dolce Vita, when Rome gained the nickname 'Hollywood on the Tiber' and the Amalfi Coast, Capri, and the Costa Smeralda rose in popularity as exclusive holiday destinations.
In 2022, average prices in ultra-luxury hotels in Italy rose by 45% post-Covid-19, with further increases expected in the future. Many top-tier luxury hotels are undergoing repositioning to cater to the demands of their upscale clientele. Renovation plans are in place for premier hotels in Venice, Portofino, and Costa Smeralda, with properties like Pitrizza and Romazzino set to rebrand as Cheval Blanc and Belmond. Rome is also seeing a surge in new ultra-luxury hotel openings, with over 1,000 rooms scheduled between 2023 and 2025, bringing in acclaimed brands like Four Seasons, Mandarin Oriental, and Rosewood.
With the upcoming wave of new luxury hotels and brands, Italy looks to stabilize its luxury offerings after a period of significant changes, as outlined by Barrows Hospitality. #hospitality #hotels #hotellerie #investments #finance #privateequity #familyoffices #pitrizza #romazzino #chevalblanc #belmond #fourseasons #mandarin #rosewood #barrowshospitality
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