Experiential hospitality has been identified as a key trend for 2025, and lifestyle and luxury leisure concepts are starting to demonstrate how delivering the right offer can achieve measurable returns for investors.
Designing a successful experiential hospitality concept
Natalia Strafti, CEO of Grivalia Hospitality, an investment and development platform focusing on branded, luxury hospitality in Greece, highlights the shifting priorities of the next generation of travellers when thinking about designing an experiential hospitality offer for the long-term. The group’s portfolio includes the One&Only Aesthesis in Athens, which opened in 2023, and 91 Athens Riviera, with two “very ambitious” greenfield projects in the pipeline, including one in Mykonos.
“Lifestyle hospitality nowadays goes far beyond the basics of rooms and services. It integrates design, culture, locality, local community engagement, to create new, unique experiences for the guest,” explains Strafti. “The upcoming generations of consumers and travellers... give a completely different priority and meaning to what we call luxury, and they give a higher value to luxury experiences, rather than possession of luxury goods.
“Given this trend, authenticity and personalisation are the biggest challenges that the luxury segment is facing nowadays, and also the ability to readjust and define your product to a dynamic environment of travelling habits without losing your brand identity.”
Flexibility and adaptability
Nuno Galvao Pinto, regional vice president of development, Europe, at Hyatt Hotels, agrees that the product needs to be flexible and adaptable to remain relevant, particularly in the fast-changing lifestyle segment. Ensuring a pre-opening that is on time with a finished product and a full hotel of bookings lined up is key, he says, but even before that, a thorough market analysis is what will guide you.
“Your market study should identify the product that you should develop, the concept, the experiences that should go with it,” he says.
Omer Isvan, president of Servotel – which is exploring opportunities in markets such as France, Italy, Spain, Portugal, and Turkey – says that there are “a lot of shallow interpretations in the market” of what constitutes ‘experiential hospitality’, and warns of following trends rather than real market shifts that are long-term and relevant.
“We’re not developing hotels to a two-year trend,” he says. “[With] a real estate investment, which is a long-term investment, we have to be careful that the trend is there to stay and has legs.”
Environmental, social and governance (ESG) also needs to be part of the early development cycle, not just an add-on once operations are live. Galvao Pinto stresses that ESG will dictate changes in the market in the future, not just in consumer expectations but also financing.
“Banks and financing institutions are now having sustainability as a condition to financing... and that is coming down the track very, very quickly,” he says.
Measuring success
Once open, Galvao Pinto says the most important metrics of success for experiential hospitality include customer feedback and return rate – “and then most importantly, the smile on the face of the owner”. Strafti says that, as owners, it all comes down to bottom line profitability. “We assess and evaluate all revenue generating components on a standalone, separate P&L [profit and loss],” she says.
Isvan says Servotel looks at the revenue generating index (RGI) of how a property is penetrating the benchmark set, rather than the competitive set, however the critical success factor for him is risk management.
“If you want low risk, then you’re not going to create innovation and there’s not going to be any creativity,” he explains. “By definition, innovation and creativity are risky. By definition, both are needed in those segments [luxury leisure and lifestyle]. Therefore, the balancing act between innovation and creativity and risk managing those is the crucial key success factor.”
All those quoted in this article appeared on stage at the Resort & Residential (R&R) Hospitality Forum, held in Athens, Greece, between November 18 and 20 2024, in a session called: Capitalising on experiential hospitality: Successful lifestyle and luxury leisure concepts.