Rooms Hotels

Four Seasons, Marriott, Starwood CEOs Laud the Rebirth of Luxury

@denschaal

Jun 03, 2014 9:30 am

Skift Take

The luxury segment is having its moment, but it obviously isn’t the be-all and end-all. Some 100 million Chinese outbound travelers are making their trip plans, and most of them won’t be looking for luxury properties.

— Dennis Schaal

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Four Seasons

The Four Seasons Hotel Atlanta Four Seasons


Four Seasons Hotels focuses solely on the luxury segment, but CEO J. Allen Smith says it isn’t the buildings or other “hardware” that guests crave these days.

“No one has written to me telling me that the floors are great,” says Smith, who says his business is performing “exceptionally well.”

Instead, guests talk about the “experience,” Smith says, and they are looking for “the Instagram moment.”

There is so much talk in the hotel industry these days about the high margins of the limited-service sector, and the successful IPOs of Extended Stay America and La Quinta, for example.

But, the CEOs of Four Seasons, Marriott and Starwood, participating on a panel at the NYU hospitality conference in Manhattan June 2, talked about the rebirth and evolution of the luxury segment.

Their timing was perfect as Hilton Worldwide yesterday announced the pending launch of the Curio brand, a collection of four- and five-star supposedly iconic resorts mostly in urban settings that won’t necessarily have to adhere to the rigid standards usually imposed by the mothership.

And, Marriott announced that some 200 properties — nearly 25% of the hotels in its global pipeline — will be part of its “luxury and lifestyle” brands, and they’ll attract nearly $15 billion in investment from Marriott and its franchisees.

The luxury segment, according to these three CEOs, is thriving.

Marriott CEO Arne Sorenson said “the luxury space is perfuming exceptionally well.”

Sorenson said he recently engaged in conversation with a Chinese traveler, perhaps 27 or 28 years old, during a flight and the young man pulled out a diary where he listed all of the hotels he had stayed at. The young traveler had been collecting “experiences,” Sorenson said, and 15 or so of his stays had been at The Ritz-Carlton properties, an independently run Marriott brand.

It is the “richness of the experience” that guests are looking for, Sorenson said.

Frits van Paasschen, the Starwood CEO, likewise said that luxury was dead years ago, but has come back in the last half-dozen years to the point that Starwood has more than doubled its luxury footprint through brands such as W and St. Regis.

Van Paasschen called it an “interesting phenomenon” that young people, many of them road warriors, are fueling “extraordinary growth” at Starwood’s luxury brands, and are choosing to stay at St. Regis.

“More and more people are crossing that threshold where they can stay in high-end hotels,” van Paasschen said.

Meanwhile, InterContinental Hotels doesn’t have the same position in luxury as some of its rivals. CEO Richard Solomons said while luxury is still an important piece of IHG’s overall business, the Holiday Inn family is IHG’s biggest brand.

It’s not all about luxury, of course, but the segment is clearly having its moment, and younger travelers are helping to shape its evolution.

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