Why was the luxury segment hit so hard by COVID?
It truly depended on the destination and markets they serve. We had city center luxury hotels that were hit hard if they relied on international, corporate and group travel. These feeder markets were not traveling due to restrictions on international air transportation, corporate travel policies and the very destination they served had legal limitations on group gatherings as well.
However, many hotels and resorts had some of their highest ADRs and best occupancies during COVID. This was in part to a great increase in luxury leisure travel and consumers staying in their country of residence or traveling to destinations in driving distance of their homes. Our member hotels in sunny destinations like Miami Beach (where the Eden Roc hotel is located) and Southern California (with La Casa del Zorro in Borrego Springs) were booming.
What also impacted the luxury segment is the fact that many individuals did not have to work from an office and instead, chose to work from a sunny or remote destination that provided the perfect venue to socially distance, while also enjoying outdoor activities nearby. That’s very different from a centrally-located hotel that relies on restaurants, museums, shopping, theaters and the like to be open.
What are some of the ways the segment has had to adapt to accommodate new protocols and expectations?
They say crisis breeds innovation and over the past two years, we’ve seen many wonderful examples of this. For example, traditional room service had to adjust to accommodate new protocols and expectations. To provide greater convenience to guests, hotels wanted to incorporate food deliveries to guests’ rooms but perhaps had to change menu items with food and beverage choices that fare better wrapped and delivered in a sanitary manner. With these new protocols in place, you couldn’t just place a stainless-steel dome over the food.
Additionally, restaurants had to remove some tables to create greater space between each guest dining, thus seating less at one time. Those that also offered buffets had to turn to menu-only options. Many hotels’ front desk operations went to contactless check-in too. Despite these changes, most travelers appreciated the protocols and precautions taken by hotels.
How do you advise luxury properties to comply with these protocols while still meeting the expectations of a luxury traveler?
WorldHotels created a program called We Care CleanSM. This global initiative was designed with protocols for all our member hotels and resorts to apply across their properties and give travelers the comfort and confidence that WorldHotels is maintaining the highest standards of quality and safety during the global pandemic. During the peak of the pandemic and still to this day, travelers want to know they are safe and their rooms and the hotel’s public spaces are clean and disinfected.
At the same time, you have to deliver a luxurious experience and value to guests while implementing these protocols. Most travelers understood this and recognized that we were all in this together and doing our best. Many truly appreciated the efforts of our teams.
Being that we are a collection of independent hotels and resorts, each hotel had the wonderful opportunity to still deliver a magnificent guest experience by utilizing the space around them. For instance, we had hotels, like The Kimberly Hotel in NYC and the Royal Park Hotel, host outdoor concerts to provide hotel guests with entertainment while still providing a safe space for everyone.
How has the luxury traveler changed? What are they looking for post COVID? What’s different and what’s the same?
Most hotels are keeping many of the same protocols. The luxury traveler liked many of the sanitary procedures and now demand this level of industry-leading cleaning standards, best practices and protocols even as restrictions lift. One thing hotels have learned is about the “traveler’s desires.” Some travelers don’t want hotel staff to enter their rooms throughout their stay. Others are comfortable with daily maid service. Our hotels ask each traveler what their preference is during check-in.
Additionally, we have noticed shorter booking windows from travelers. They wanted greater flexibility to change dates on their terms without penalties. All in all, luxury travelers still want to have a unique and memorable experience. That’s why they stay with independent hotels like ours.
What are some current challenges the luxury segment is facing, and how do you advise it works to overcome these?
With those hotels enjoying a higher ADR and occupancy rates, the challenge now is staffing shortages and training new employees on how to deliver the luxurious guest experience that’s expected. This staffing challenge was primarily caused by COVID and one that has affected the entire industry.
WorldHotels has a partnership with Forbes Travel Service that offers incredible training for most departments in a hotel, which can be done both in person and via video. Many luxury hotels are faced with these shortages and new employees that might not have the experience previous employees had. However, better training will eventually help overcome these challenges. Additionally, many hotels have implemented extra incentives, including raises, sign-on bonuses or higher hourly wages to keep current staff from going to other industries and attracting new employees as well. These changes are also driving up hotel costs that might be passed on as higher rates.
To overcome these challenges, communication between the hotel and guests is important. Perhaps room service that took 15-25 minutes before the pandemic, might take 40 minutes now and it’s up to each hotel to set expectations with guests. Poolside service might also be suspended due to lack of service attendants or a more limited menu. The better you set guest expectation from the start, the better the understanding and overall experience for the guest.
What about some opportunities?
One of the greatest results for many domestic hotels was that they had the opportunity to generate more loyal customers that would otherwise travel internationally. During this pandemic, travelers discovered new destinations and tried new types of hotels. They might do both in the future, but definitely found a “new home” with domestic hotels. They also tend to stay longer if they only travel domestically.
Many hotels used the “down time” during COVID to reimagine their properties, renovate and refurbish so now they can deliver a superior product and experience. This also gave hotels the opportunity to do things they could not do when running high occupancies.
What do you see on the horizon for the luxury segment?
Luxury travel is going to be a very strong segment. It’s truly an exciting time as there are now many definitions to luxury. Hotel visionaries, developers and managers are tapping into high-value customers and offering all types of guest experiences. Consumers shop “travel” and accommodations as they shop other parts of their life. Sometimes they seek accommodations and travel experiences that are classic, modern, by the beach or city center, at a safari, remote, culinary-driven destinations, etc. These can all be luxurious and deliver the unique experiences the traveler booking is looking for. Some luxury travelers also want non-stop activities or access to local events, while others want peace and quiet.
Additionally, it’s good to keep in mind that many travelers have not ventured out the way they used to before the pandemic and have greater disposable income to put towards a great, luxurious trip. You can expect to see “big bucket” travel experiences from guests wanting to spend more on their next trip. Reuniting with family and friends and enjoying wellness-focused experiences will also be popular this year. Activities like beach yoga, forest bathing and evening fire pits are just a few of several new trendy activities that we can expect to see. Today’s discerning traveler might also seek more profound experiences and want to learn from locals, travel more consciously and seek experiences that tap into their passions. This plays to the strength of WorldHotels.
Pictured above: Gleddoch Golf & Spa Resort in Glasgow, Scotland
Tags: Gregory Habeeb, luxury, Luxury Hotel, luxury travel, Travel, WorldHotels
