Post-pandemic, there have been a few hospitality sectors that have seen increased demand from both consumers and investors. The growth of resorts and extended stay have been well documented, but the global growth in branded residences has been exponential, and the momentum looks set to continue.
Part of this is due to the spread of wealth across the world with more and more consumers having the power to spend, coupled with the continued lure of brands and the significant lifestyle and investment benefits that this model offers.
To get a sense of the evolving landscape, we recently caught up with Chris Graham, managing director of Graham Associates, and Riyan Itani, founder of Global Branded Residences.
Below are some excerpts from our conversation, and you can watch the full interview above.
On the benefits of adding a branded residence component to a hospitality development
CG: There are three clear component elements; there is the brand itself, then there's the developer/the owner, and then of course there's the buyer. The beautiful thing about this model is that it's an unusual situation where you get the triple win, as all parties benefit.
On picking the right brand
RI: I think the really important thing is to understand your buyer in the first instance because that's going to dictate the branding solution that you come up with. But there are other parameters that you have to take into account; for example, is there going to be a hotel? If so, that's going to immediately lend itself towards management companies. Is this a market that is already saturated with brands? In which case you may consider non-hotel brands to offer differentiation.
On the rise of non-hotel brands in the sector
CG: The opportunities are being spotted by these brands and they're thinking ‘can we extend into this sector and generate a new revenue stream’? In theory, any brand that offers a distinctive, aspirational lifestyle could enter the space, and we've seen this with the likes of Dolce & Gabbana, Armani, Fendi, and Versace, as well as publishing, restaurants, and automotive marques. However, generally these brands cannot offer the same level of service as hospitality brands. And just because a luxury retail brand has a strong consumer following doesn’t automatically mean that they will want to be immersed in it 24/7.
On branded residences moving into the lifestyle segment
RI: From the hotel companies, we're seeing more lifestyle brands coming into the residential sector, and even new ones being created specifically for it, including non-luxury upper-upscale / upscale brands coming into the market. Why is that important? Because it broadens the target audience, and some markets are better suited to upper-upscale / upscale brands.