Business management & development
As one of many luxury hotels in Dubai, Atlantis The Royal must offer unique qualities, such as its underwater suites, to appeal to HNWI guests.
we strive to offer guests a completely unique experience with each stay.”
Willemijn Geels, vice-president
development Europe, InterContinental Group
In terms of return on investment (ROI), the sheer variety of opportunities for development – in terms of both location and experience – could make it hard to predict. Fundamentally, there is no set recipe for ensuring a healthy ROI, so investment decisions essentially come down to knowing the potential of a property or destination and, crucially, how that fits with the needs of specific groups within the HNWI segment. “The ROI of a hotel investment depends on many factors that can vary widely,” Hazelton explains. “The most important are cost of the product and profitability of the operations. The cost of developing a hotel varies to a degree depending on the region, the product and the design, while profitability in operations is affected by numerous variables, some that are out of our control, including effects from the local or global economy.” Kerzner’s approach is to focus on providing a strong return to owners and investors without favouring a specific region or segment.
Francesco Cefalu, chief digital officer, Mandarin Oriental
“For most of our customer base, geography isn’t a limiting factor and they will travel where they want to go,” Hazelton explains. “Whenever we consider a new property, we consistently rely on the fundamental principle that forms the core of our beliefs – extraordinary. This principle guides all our new openings.”
Jan Hazelton, vice-president for global development, Kerzner
20
Beyond the wealth curve Wealth is certainly the driver of the luxury hotel sector, but it is not the only factor that fuels the potential of that segment. The development of properties and services in the luxury segment is informed by many factors, but chief among them is the understanding of how preferences are changing with different demographics.
“Considerations include evolving consumer preferences, strategic location choices, technology, adherence to cultural and design trends, a commitment to sustainability, awareness of the competitive landscapes and responsiveness to global events,” notes Cefalu. “These elements collectively contribute to the distinctiveness and success of luxury hotel properties and services in a highly competitive market.” Increasingly, the implications of an investment needs to be assessed in more than purely dollar terms, as travellers – including those in the HNWI segment – are aware that their activities have an impact on the planet.
“A commitment to doing business responsibly is a cornerstone of our luxury investment strategy – going beyond the traditional bottom line, considering the impact of our operations on people, the planet, and the communities in which we operate,” says Geels. “This includes integrating sustainability into every aspect of hotel operations.”
“This responsible approach not only aligns with the expectations of today’s socially conscious investors but also enhances the long-term sustainability of our luxury hotel portfolio,” she adds.
Those brands that will not only succeed in the luxury segment but lead the way in its development will be those that are keenly aware of changing consumer preferences – from personalised experiences to wellness and sustainability – as well as how to integrate technology to enhance the guest experience, and how to unlock the unique characteristics of a property or a destination. As global wealth grows, opportunities abound in the luxury hotel market, but it is not enough to ride the rising tide of the world’s HNWI population. It takes a keen sense of what customers want to make a success of any new investment. ●
Hotel Management International /
www.hmi-online.com
Kerzner
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