WeChat***Space Secret Detective" (ID: mespace007), author: Zheng Jiani.
Recently, Six Senses, the representative of InterContinental Hotels Group's luxury hotel brand, announced that it will open four new hotels around the world by the end of 2024, namely Six Senses in Saudi Arabia, Six Senses in Grenada in the Caribbean, Six Senses in Kyoto and Six Senses in London, each of which will be the debut of its country. Looking back at this year, IHG has accelerated its growth in the luxury market, and its luxury hotel footprint has become more and more abundant. With the steady recovery of tourism in various regions of the world, the global development of various hotel groups has also entered a stage of rapid growth, why are the originally unhurried luxury hotels speeding up the pace?How should local hotel groups catch up, this article analyzes briefly.
Luxury hotels are accelerating the expansion of the "new territory".
On 4 December, Six Senses announced that it will debut by the end of 2024 in four different countries: Saudi Arabia, Grenada in the Caribbean, Kyoto in Japan and London, with Six Senses in the southern sand dunes of the Red Sea opening by the end of 2023. It is reported that Six Senses is a subsidiary of InterContinental Hotels Group and is known as the "private paradise" of hotel control. Founded in 1995, Six Senses has undergone two acquisitions in its 28-year history and each has left a lasting mark on its expansion. So far, Six Senses has 31 hotels in the world, with only one in China, and is the representative of "quality, not quantity-driven" luxury hotels.
Looking back at the expansion of the luxury market by major hotel groups since the beginning of this year, it can be said that the pace is non-stop. Taking InterContinental Hotels Group as an example, in addition to the four announced by Six Senses in one go, in the first half of this year, InterContinental officially announced two projects one after another, with Shanghai as its layout town. In the second half of this year and next year, we will usher in the second Kimpton Hotel in China, the Kimpton Hotel Shanghai Qiantan, and the second Seagull Regent Hotel in Shanghai. It is understood that the Shanghai Seagull Regency Hotel was renovated from the Seagull Hotel, which has stood on the banks of the Huangpu River for more than 30 years, and is a witness to the ups and downs of Shanghai Tang, as well as the inheritance and representative of Shanghai-style culture. After the renovation, it will join hands with Kimpton to become the most anticipated hotel in the magic capital in the past two years.
Coincidentally, Marriott has been making a lot of moves in the luxury hotel market recently. Marriott International announced that it will expand into the luxury hotel market in Vietnam with the opening of three new luxury resorts. It is reported that the signing will launch the third JW Marriott hotel in Vietnam, and usher in the debut of the two new brands of The Ritz-Carlton Hotel and The Luxury Collection Hotel in Vietnam. On the one hand, the signing of the three projects expands Marriott's footprint in Vietnam, enabling Marriott to have more than 50 hotels in VietnamOn the other hand, it has expanded Marriott's luxury hotel territory.
Similarly, Mandarin Oriental Hotel Group, which focuses on the luxury hotel market, has increased its enthusiasm for the original investment regions while expanding into new territories overseas. Earlier this year, Mandarin Oriental Hotel Group announced that it would manage a brand new beach resort in one of the most sought-after locations on the Spanish island of Mallorca, with the project expected to open in the second half of 2024. It is reported that this is a new important leisure tourism destination opened up by Mandarin Oriental in Europe.
In addition, local hotel brands have also begun to steadily deploy the way of luxury. On September 21st, Narada Hotel Group announced the opening of a new luxury hotel brand "Narada Li", and the first store will be located in Beijing Million Manor. In addition, another Junlan Li - Junlan Li Hangzhou Qianyu Pavilion will also open this year. It is understood that Junlan Li Beijing Million Manor is jointly built by Junlan Group and Guangzhou Development District Holding Group. The hotel is located in the only garden house lawn courtyard on the side of Financial Street, with only 21 high-quality guest rooms.
According to incomplete statistics from the Asia Hotel Big Data Research Institute, looking at various hotel groups, a total of 18 domestic and 33 foreign luxury hotels have been announced this year, and more than 50 luxury hotels are expected to open in 2024. It can be said that the recovery of the high-end tourism market has given birth to the rapid development of luxury hotels, and the luxury hotel market has attracted more investors' interest.
What's so fascinating about a luxury hotel brand?
Luxury hotels are known to have a longer payback cycle, making luxury hotels a small part of the overall hotel industry. However, the investment logic includes not only the time value of the cycle and the brand, which may explain why the luxury hotel market has remained hot in recent years.
First of all, the arrival of the era of expanding domestic demand has forced the luxury hotel market to be taken seriously again. In the macro environment of China's economic development, the high-net-worth consumer group has grown steadily. According to the data of the National Bureau of Statistics, the per capita consumption expenditure of residents in 2022 will be 24,538 yuan, a year-on-year increase of 18%。Among them, the per capita service consumption expenditure accounted for 432%, reaching 10,590 yuan. The return of consumption by high-net-worth individuals is forcing consumers to change their values and lifestyles, the most obvious of which is the growth of high-luxury consumption. At the same time, the trend of high-net-worth consumption has also given rise to the concept of "leisure is luxury" in the wine and tourism industry, driving the rapid development of luxury hotels. For example, with the popularity of luxury tourist trains such as the "New Oriental Express", "Hulunbuir" and "Panda Train", luxury hotels such as Four Seasons and Aman have announced that they will start offering luxury yacht-style cruise routes. It is not difficult to see that the upgrading of the crowd and the continuous development of the luxury tourism market, under the trend of "expanding domestic demand", luxury hotels are one of the important growth sectors, which has also attracted hotel giants around the world to increase their bets.
Second, the scarcity of luxury hotels avoids the homogenization of hotel products. Because luxury hotels themselves have a strong 3P (personal, private, purpose) experience appeal, the products and services provided by each luxury hotel are inherently different and scarce, which just meets the sense of value in the hearts of consumers. In the case of Aman, Aman's scarcity lies in its possession of scarce resources, including its unrivalled location and excellent transportation location, as well as its ability to escape the hustle and bustle, leave a legacy and enjoy the ultimate beauty that is difficult to find in the world, and achieve the irreproducibility of Mandarin Oriental, which is the best of limited resources. On the other hand, Aman's advocacy of local culture allows it to resonate with consumers through the polishing of product quality, design, cultural connotation and other aspects to resonate with the emotional connection and mental recognition. Aman's scarcity responds to contemporary lifestyles and is one of the best luxury resorts.
Finally, the growth of luxury brands is more prominent than in other markets. On the one hand, the brand effectiveness of the hotel can bring more asset appreciation to investors, and on the other hand, it can also facilitate the subsequent assets**. Standing on the brand itself, luxury hotels tend to prevail. First of all, the growth space of the hotel group behind a hotel brand is a factor that cannot be ignored, such as whether it can develop globally, the recognition of the brand by high-end people, and so on. Obviously, luxury hotel brands have an advantage in terms of room for growth. Secondly, every luxury hotel brand has a long history of development or inspirational entrepreneurial stories behind it, and the brand story is the fundamental guarantee for the growth of the hotel, and the growth of the luxury brand has a high degree of certainty compared with the general hotel brand.
Observing the wine and tourism industry in the context of the era of "steadily advancing the strategy of expanding domestic demand", the new trend variables are clear at a glance. In the time dimension across economic cycles, the scarcity and brand growth of luxury hotels can bring stable and sustainable operating income to long-term investors, and will also bring higher asset premiums due to the continued vitality of the brand. This is perhaps the charm of luxury hotels.
Be wary of "asset-heavy sequelae" and "brand deformation".
The new round of development of luxury hotels is certainly worth looking forward to, but it must also be paid attention to compared with the lessons learned in the past.
The dilemma of high leverage in real estate is vigilant against the "sequelae" of heavy assets
In China, the shadow of real estate companies is often active behind luxury hotels. Real estate enterprises have always been one of the main forces in the development and operation of luxury hotels, especially central enterprises, local state-owned enterprises and some private real estate enterprises with commerce and cultural tourism as their main business, in the past through cooperation with a number of world-class hotel management groups such as Accor, Starwood, Hilton, Hyatt and other luxury brands, completed the most original hotel concept and management experience accumulation, incubated their own luxury brands, such as Wanda Ruihua, Greenland's Primus, etc., so it has a large amount of investment and holds high-end hotels.
In recent years, in the face of further tightening of the market, affected by "high leverage, high turnover, and high debt", real estate companies have alleviated the "three highs" dilemma through luxury hotels. For example, the revenue of the OCT Shanghai Bulgari Hotel project in 2021, 2022 and the first half of 2023 will be 24.9 billion yuan, 14 billion and 11.9 billion yuan, and the after-tax loss was 107680,000 yuan, 522510,000 yuan and 6.9 million yuan. In order to revitalize assets, accelerate asset turnover, and take the initiative to turn debts, OCT officially listed ** Bulgari Hotel.
Therefore, when real estate enters the second half, the luxury hotels that are closely related to it need to be "untied" in time, return to the original intention of luxury hotel investment, accommodation and brand, generate stable cash flow, and avoid the "sequelae" of heavy assets, which is the royal road for future development.
Time precipitation value Be wary of "brand deformation".
The brand building of luxury hotels often requires a long period of accumulation and experience accumulation in order to form a lasting brand effect. Looking at the domestic market in the past, some international luxury brands have sunk into second- and third-tier cities and immature business districts in order to "occupy the market". In the past decade, except for around 2015, the growth rate of luxury five-star hotels has been lower than the average growth rate, and the rest of the years have been higher than the average growth rate. The homogenization of luxury hotels in the "Beijing, Shanghai, Guangzhou and Shenzhen" region is particularly high, and some luxury hotels are more like assembly line operations, and there are very few hotels that can truly be called "luxury". In recent years, the reputation of some luxury brands has collapsed and gradually been eliminated from the market. Some international luxury brands, in the franchise and other modes, should also avoid "brand deformation" and the emergence of a number of pseudo luxury brands.
How does a local group "create a dream" with a luxury brand?
In recent years, there have been more and more players in the luxury hotel market, but the main players are still international hotel groups. The following experience may be a reference for how local hotel groups can seize this wave of growth opportunities, catch up, and realize the "dream" of luxury brands.
Unlock the "Crossover Customization" pose
The lines between luxury hotels and luxury experiences are blurring as consumers evolve in their quest for experiences, with many luxury brands combining products and services in innovative ways. Nowadays, luxury brands have formed a situation of "one super and many strong" to make hotels, and in the same way, this has also given rise to the way of cross-border cooperation with luxury brands to play "customization".
Take the St. Regis Hotel as an example, with the question "How can we make the brand evergreen?".In recent years, St. Regis has been frantically cooperating with other fields in a "customized" manner. Dior, Bentley, Tiffany, BV and other customized suites co-branded with luxury brands have been launched. St. Regis is very good at using this kind of "customization", making it a win-win situation with the hotel industry and the fashion industry, and at the same time, it has also become the forerunner of "haute couture" hotels. The natural blurring of boundaries between high-quality brands and their interconnectedness can make luxury hotel brands appeal to a growing number of young consumers who are looking for spiritual resonance.
Adhere to the "original service" intangible assets
At the heart of a luxury brand, both local and international, is the service that meets expectations without hesitation, after all, luxury hardware can be replicated at any time, only the level of service is warm and unique. Why is The Ritz-Carlton the benchmark brand for luxury hotels?Depends on its true "home away from home" service experience. For example, the Ritz-Carlton has a unique internal rule: every employee, from the general manager to the newest waiter, is entitled to spend up to $2,000 to ensure guest satisfaction.
Perhaps it was Ritz-Carlton's series of such service concepts that finally earned it the reputation of "the roof of hospitality services". Driven by consumer demand, meeting the essential expectations of guests without hesitation is the core of luxury hotels, and it is also the basic consideration of local hotel groups when laying out the luxury hotel market.
Establish a local luxury hotel alliance
Looking around the luxury market as a whole, more and more independent boutique independent hotels will join the international family. It is undeniable that whether it is the entry of international hotel groups represented by Hyatt and Intercontinental, or the tug-of-war of independent hotel alliances represented by Leading World and Preferred Hotels & Resorts, it has brought today's position to international hotel groups in the luxury market.
This also has a certain reference significance for China's independent hotel market, with the increase of China's high-net-worth individuals, local small luxury hotel brands such as Kangteng, Songtsam, and Bailian may emerge in clusters. Sharing a mature membership system and operating system, and retaining its own exquisite hotel characteristics, may establish a local luxury hotel alliance, which will help local hotel groups gain a firm foothold in the luxury hotel market.
Create a "sample" of the integration of culture and tourism
"Niche fetish" is one of the mainstream choices of luxury hotels, so for luxury hotels, excellent locations are often a scarce resource, and luxury hotels have planted the seeds of "changing the image of the territory" in the market.
Costa Rica, for example, has long been known for eco-tourism, but it wasn't until the arrival of the Four Seasons that it was labelled luxury. Costa Rica's increasingly unique and professional hotel experience has made Costa Rica one of the top destinations for high-end wellness tourism, and has contributed to a 143-year-old increase in tourism revenue over the past 15 years2. One of the fastest growing regions in the world. How to integrate hotels into tourist destinations, make hotels become benchmarks and samples of the tourism industry, and integrate into the ecology of the cultural tourism industry is a direction worthy of overall layout.
In summary, the rapid growth of luxury hotels is certainly gratifying, but the brand building of luxury hotels may have just begun, and in 2024, it is expected that more and more new luxury hotels will open to bring continuous surprises to the entire world's accommodation ecology