Luxury Hospitality

September 08, 2023 •

11 min reading

Luxury hospitality: Trends, challenges, and best practices

Written by

Luxury is the new black. Post the pandemic, the global luxury industry recorded sales of €1.15 trillion in 2021, and continued its growth in 2022 by 19%-21% (Bain & Company, 2023). Luxury hospitality, luxury cars, and personal luxury goods represent over 80% of the total market. In this article, we zoom into the world of luxury hospitality to examine the trends that shape this industry, the challenges that are associated with the trends, and the best practices that illustrate how firms are managing such challenges.

The trend of personalized meaningful experiences

The luxury market is undergoing a significant shift, as the upcoming generations of consumers are expected to dominate the market in the future. Generations Y and Z, born between 1981 and 2012, are set to represent 80% of the global personal luxury goods market by 2030 (Bain & Company, 2023). These young consumers have a different approach to luxury than older generations. They value meaningful luxury experiences over the possession of luxury goods. Because of the democratization of luxury goods and the increasing number and quality of luxury counterfeit products, luxury products do not signal social status as they used to do (Eckhardt et al. 2015).

Luxury consumers are therefore relying more on luxury experiences (to construct their identity and signal their exclusive status (Bardhi et al. 2020). To fulfill such identity motives, the new generation of luxury consumers are looking for luxury experiences which are authentic and personalized (Morhart & Malär 2020). Given this shift in priorities, authenticity is one of the most significant challenges for the luxury segment of our time.

Luxury hospitality brands thus need to start investing in experiences that are more meaningful and personalized, leveraging data and technology to inform tailor-made offers and events. Personalization is a crucial factor as young consumers (Rosenbaum et al. 2021) are looking for more than just a one-size-fits-all approach to luxury. They value personalized experiences that cater to their individual preferences, and they expect luxury hotels to understand and deliver on their unique needs. Examples of engaging and personalized best practices for luxury hospitality include:

  • Immersive experiences that allow customers to engage with the local surroundings in a meaningful way.
  • Connecting with guests on an emotional level by using storytelling techniques to communicate their brand values and heritage.
  • Personalized itineraries for guests that includes unique experiences that align with their interests, such as private tours of museums or exclusive access to cultural events.
  • Personalized experiences for customers by providing a concierge service that assists them in planning and booking their trips or by providing a personal shopping service.
  • Data use of a guest's past stays to personalize their experience by offering them their preferred room type, amenities, and services.

EHL Degree Programs  Which Master in Hospitality is right for you?  Discover which Master in Hospitality at EHL fits you best. It will only take  the time it would to make yourself a coffee  Start the quiz

The trend of blurring boundaries

By engaging customers in personal and memorable ways, luxury hospitality and brands all exist in the experience economy (Pine & Gilmore 1998). Experiences span dimensions that are not bound to extant categories and sectors. If brands want to provide extraordinary experiences, they must combine products and services innovatively. In brief, luxury hospitality and retail boundaries are blurring. Examples include:

  • Four Seasons have started including luxury watches and bags in their offerings that guests can access during their stay. Imagine staying at a Four Seasons hotel and borrowing a luxury watch to wear to the opera.
  • Audemars Piguet have opened their own hotel in their hometown of Le Brassus in the Swiss Jura mountains, allowing visitors to spend time in the world of Audemars Piguet.
  • Dior have expanded their chain of branded spas in luxury hotels worldwide. The spas are outfitted in Dior textiles and allow guests to experience “Dioriginel” beauty rituals, which bring to life the brand’s stories and values.

The blurring boundaries underline the realization of luxury hospitality where luxury brands can be consumed in an access-based, dematerialized and ephemeral way (Bardhi & Eckhardt 2017). Materialist luxury consumers care less about buying luxury goods; they simply want to feel close to the brand. Thus, renting or accessing luxury products temporarily scratches the itch the same way as buying does, but at a much lower price point. This is a so-far scarcely exploited opportunity for luxury hospitality.

Ironically, however, the global demand for physical luxury goods is booming, increasing from $259 billion in 2020 to $355 billion in 2023. This poses an existential challenge for luxury brands: how can they meet ever-growing demand without diluting the core foundation of their brands - exclusivity? So far, brands have resorted to rationing the products they sell: the demand is so high for some luxury brands that there are 10-year waiting lists for their products. However, this creates another problem: frustration on behalf of many potential customers. Offering experiences has proven a successful strategy. Producers of luxury products have realized this and are switching elegantly between physical goods and experiences to promote their brands and values.


From trend to challenge: exclusivity versus growing demand

Increasingly consumers value personalized and meaningful luxury experiences, and consequently, luxury hospitality and retail have joined forces to meet this demand. As in physical luxury goods, the demand for luxury experiences is growing. Yet, how to remain rare and exclusive while growing is a classic challenge luxury hoteliers are facing. This is a difficult balance to achieve because as the hotel brand expands and attracts more guests, it can become more difficult to maintain an aura of exclusivity.

Über-luxury hotels are well aware of this danger. For example, the group executive vice president of Bulgari Hotels said they would probably limit their number of hotels to 15 worldwide and One&Only Resorts CEO said they would set the limit at 35 (Skift, 2023). This tactic has been used by brands such as Ferrari and Hermès. Ferrari reduced the number of cars sold in 2013 to reinforce its image of exclusivity (Foy, 2014), while Hermès stops production of products as soon as they become too popular. Thus, this is one strategy that luxury hotels can employ to maintain their exclusivity and generate sustainable growth by increasing prices and reducing the number of available rooms.

Another approach is to implement a dual management system like Hyatt did with their Park Hyatt brand. By separating the high-end properties from the more mainstream offerings with a different brand name, luxury hotel chains can cater to both ordinary and luxury guests while ensuring the long-term establishment of their brands.

A further alternative is to focus on the customer experience. Luxury hotels can differentiate themselves by providing exceptional and personalized service, creating unique experiences, and offering exclusive amenities that are not available elsewhere. By providing unparalleled service and creating memories that guests will cherish, luxury hotels can establish themselves as truly exclusive and rare.


From challenge to best practice: The case of Aman Resorts in being exclusive and growing

Aman Resorts is a case that illustrates an organization’s ability to balance the challenge of exclusivity versus growth. Aman (“peace” in Sanskrit) was created by hotelier Adrian Zecha who opened his first boutique resort, Amanpuri, in Phuket Thailand in 1988. Exclusive privacy, exceptional service, sensitive architecture, and extraordinary locations made Aman a top choice for affluent guests. Known for cultivating the art and science of being one step ahead of guests, it is a practice between the properties to share files of guests containing information that highlight their extreme attention to detail (e.g., a guest’s preferred time to have lunch, type of pillows requested during last stay, etc.).

Vladimir Doronin acquired Aman Resorts in 2014 and its portfolio has grown to 34 properties across 20 destinations, 15 of which are located close to or within UNESCO-protected sites. To respond to the changing preferences and needs of the Aman guest, the luxury hospitality group has expanded into urban sites (Aman New York opened in 2022) while maintaining the specificity of the brand including use of generous space and cultural heritage, discreetness, simplicity, and elegance. In 2020, Aman launched Janu (“soul” in Sanskrit), a brand that would distinguish itself from the sanctuary sister brand by focusing on human connectedness and social wellness.

As luxury brands have expanded into luxury hospitality such as the development of Versace, Dior, Bulgari and Armani designed hotels, and the notable acquisition of Belmond by LVMH in 2018, Aman has done the reverse. Aman has no loyalty program, yet their loyal guests and fans (known as “Amanjunkies”) identify very strongly with the brand. It is not uncommon for guests to plan their holidays according to the location of Aman worldwide and post stories about their numerous stays on Instagram.

Aman’s strong brand identity, coherent with its brand image, has enabled a horizontal brand expansion into soft luxury goods. In 2018, Aman launched its lifestyle brand “Aman Essentials” expanding into skincare, wellness, ready-to-wear and a leather collection of handcrafted accessories and bags. Since 2022, their luxury goods have been available beyond Aman properties, for example at Harrods, the world’s leading luxury department store in London. Aman Essentials continue to expand their product development pipeline, which now includes homeware, childrenswear and fine jewelry.

EHL Research  Collaborate with our Researchers  Opportunities for collaborative research range from dedicated applied research  projects by selected faculty members to sponsorship of a long-term research  institute at EHL.  Contact us

From trend to challenge: customer experience versus sustainability

As luxury experience has become a cornerstone, so has sustainability. Whereas sustainability was optional for most brands just a few years ago, today it has become a prerequisite (White, Habib, & Hardisty 2019). However, sustainability and luxurious hospitality experiences are fundamentally at odds with one another.

For example, take the simple matter of space. Individuals closely associate vast, sparsely populated spaces with luxury (Clayton O’guinn et al. 2015). Research findings show that sparsely populated spaces are positively associated with higher prices for the products and services sold there, along with higher incomes and higher social status of the consumers.

We see this in luxury too. Luxury consumers are willing to pay multiples of an economy class ticket price to fly first class, or even private, to the same destination. One of the main advantages is the additional individual space and the greater distance from other passengers (at airport lounges, first-class cabins, larger business class seats, etc.), which makes flying first class or in a private jet a luxury experience. This additional space in air travel is highly unsustainable. Flying private emits 14 times more pollution per passenger than an average passenger on a commercial plane (Saner 2023). Moreover, the World Bank found that business and first class take up six times as much space as economy. Together with their lower occupation rate, this makes flying business and first class up to nine times as polluting, per passenger, as economy.

Space allocation is just one example of many where the premises of luxurious experiences and sustainability clash. Luxury resorts are vast, elaborately decorated and furnished, newly constructed buildings in which drinks and meals are served that are imported from all over the planet. However, this is what luxury consumers expect and pay for. The industry must find new and innovative solutions to become sustainable while retaining what makes an experience luxurious.


From challenge to best practice: The case of Soneva in delivering a sustainable, luxury experience

Soneva is a case that illustrates an organization’s ability to deliver a luxury experience while being sustainable. Soneva was founded by Sonu Shivdasani and Eva Malmström Shivdasani (the company name comes from the owners’ combined names) in the Maldives in 1995. Their first resort, Soneva Fushi, was followed by Soneva Kiri in Thailand and Soneva Jani in the Maldives. Soneva pioneered and practiced sustainable luxury hospitality well before sustainability became the center of attention in the industry.

At Soneva, language is perceived as a powerful artifact and is deliberately used to shape desired behaviors to create and reinforce a corporate culture where sustainability and customer experience is at the heart of the business model. For example, “hosts” are used instead of “employees”, “Guardian of Experience” instead of “Head of Operations”, and “Guardian of the Culture” instead of “CEO” to highlight the importance of driving key behaviors, including the protection of biodiversity and habitats in and around the resorts.

By defining luxury as rare, novel, and authentic, the founders designed experiences around “intelligent luxury”, “slow life”, and “no news, no shoes” policy. Their philosophy lies in disconnecting from urban life and reconnecting with nature and what is local, organic, and sustainable. The resort’s villas have been built with sustainable resources around existing trees (so as not to cut them down) and are equipped with solar panels, recycling facilities, organic gardens, biodegradable cleaning products, edutainment activities to teach guests to appreciate and protect marine life and the local environment.

One example is water and plastic. Soneva banned plastic drinking straws in 1998 and stopped importing bottled water in 2008. They assisted in establishing a water bottling plant that desalinates and mineralizes sea water before bottling it in reusable glass bottles. Filtered water is provided to Soneva guests, a process that proved to be ecological, healthier for guests (higher quality water due to its freshness) and financially sound. Soneva saves about 18% on the cost of water while providing clean water to about a million people. All water revenues go to community projects in the Maldives where Soneva works, with the commitment of the government, on eliminating single plastic use on the local islands.

Another example is carbon emissions. Since 2008, Soneva measures all three scopes of carbon, which include direct emissions (scope 1), indirect emissions (scope 2), and external factors such as guests flying into the resorts or supplies being delivered (scope 3). In general, the hospitality industry measures scope 1 and scope 2 using the carbon calculator developed by the WTTC (World Travel Tourism Council) and the ITP (International Tourism Partnership). On average, a guest’s round trip to Soneva will result in emissions of around one metric ton of CO2. As a solution, Soneva added a mandatory two percent environmental levy to the guests’ bills to offset the emissions.

Over the years, this raised $8-9 million for the Soneva Foundation which provided half a million trees in the North of Thailand, a one and a half megawatt windmill in India, and efficient cook stoves in Myanmar (known to have one of the fastest rates of deforestation due to use of wood for domestic open fire cooking, which also leads to carbon emissions and premature deaths linked to respiratory problems). Since 2012, Soneva has been fully carbon neutral. Soneva strongly believes and acts in a way that sustainability, luxury experience and profitability go hand in hand.

In conclusion, the trend of offering personalized meaningful experiences will undoubtedly continue in the future. Moreover, hospitality’s efforts to reconcile exclusivity versus growing demand, and customer experience versus sustainability will drive the industry moving forward. The two case studies demonstrate that a strong brand identity and image, technology, and collective intelligence enable luxury hospitality companies to generate innovative solutions that respond to these dichotomous challenges and the evolving market.


  • Bain&Company, 2023, “Renaissance in uncertainty: Luxury builds on its rebound”, (accessed May 5, 2023), [available at]
  • Bardhi, F., Eckhardt, G. M., & Samsioe, E. (2020). Liquid luxury. In Research Handbook on luxury branding (pp. 22-42). Edward Elgar Publishing.
  • Bardhi, Fleura and Giana M. Eckhardt (2017), “Liquid Consumption,” Journal of Consumer Research, 44 (3), 582–97.
  • Clayton O’guinn, Thomas, Robin J Tanner, Sharon Zukin, Alan Trachtenberg, Albert Muniz, Erika Paulson, John Pracejus, and John Sherry (2015), “Turning to Space: Social Density, Social Class, and the Value of Things in Stores,” Journal of Consumer Research, 42 (2), 196–213.
  • Eckhardt, G. M., Belk, R. W., & Wilson, J. A. (2015). The rise of inconspicuous consumption. Journal of Marketing Management, 31(7-8), 807-826.
  • Foy, H. (2014). Ferrari profits soar despite reducing car production numbers. Financial Times. (accessed on May 5, 2023) [available at]
  • Morhart, F., & Malär, L. (2020). Authenticity in luxury branding. In Research handbook on luxury branding (pp. 190-207). Edward Elgar Publishing.
  • Rosenbaum, M. S., Ramirez, G. C., Campbell, J., & Klaus, P. (2021). The product is me: Hyper-personalized consumer goods as unconventional luxury. Journal of Business Research, 129, 446-454.
  • Pine, Joseph B. and James H. Gilmore (1998), “Welcome to the experience economy,” Harvard Business Review, 76 (July-August), 97–105.
  • Saner, Emine (2023), “Flying shame: the scandalous rise of private jets,” The Guardian, (accessed May 5, 2023), [available at].
  • Skift, 2023, “How many hotels is too many for an ultra-luxury brand?”, (accessed on May 5, 2023), [available at]
  • White, Katherine, Rishad Habib, and David J. Hardisty (2019), “How to SHIFT Consumer Behaviors to be More Sustainable: A Literature Review and Guiding Framework:,” Journal of Marketing, 83 (3), 22–49.

Original article from: (p. 43).

Written by
Dr Sowon Kim
Written by
Dr Sowon Kim

Associate Professor at EHL Hospitality Business School

Dr Florent Girardin
Written by
Dr Florent Girardin

Associate Professor at EHL Hospitality Business School

Dr Matthias Fuchs
Written by
Dr Matthias Fuchs

Assistant Professor at EHL Hospitality Business School