By Georges Panayotis

At a time when we are seriously questioning the real values that lie behind behavior, the hotel industry is returning the experience to its place of honor as it justifies the customer’s choice of this or that particular category. This idea of the experience, which is increasingly indispensable regardless of the level of the offer, becomes absolutely necessary when we enter the luxury segment.

By nature, luxury must stimulate desire, envy and surprise. But today brands offer a multitude of areas of expression. The choices tend either towards a more intimate, more accessible, less arrogant and less intimidating luxury that is currently resulting in the growing success of highly personalized boutique-hotels; or towards a more contemporary and glitzy luxury… a vision of an explosive luxury, sublimed, excessive, exaggerated… often driven by new players in emerging countries and whose frequentation betrays above all a certain social status; or else towards a veritable sensorial luxury and harmonious, that is more objective and authentic and seeks the ephemeral and emotion and to make them eternal.

Each of the three economic models relies on a sufficiently large clientele and current market conditions encourage a certain share of guests to shift away to one or another luxury hotel territory. Clearly the level of services leads to increasing levels of investments that depend on the owner’s choice of profit model. Segmentation has become an imperative in the luxury universe with enormous challenges due to the entry fee.

Paradoxically, the sector got through the first years of crisis better, after the market crash in 2009, thanks to the rise in power of new fortunes. The usual ratios have exploded to accelerate the opening of new palaces and renovations of the iconic ones. But little by little, as a crisis takes shape and success grows more discretely, luxury hotels must justify the exceptional or revive quality/price ratios that were not a priority during the better years.

There is no longer any protected luxury space but rather a return to targeted marketing. The strategic choices of professionals in the luxury hotel sector are not limited to their entitlements. They have always been the corner stone that sets the level of comparison and acts as a Benchmark for the positioning of the other segments. Whether it is an economic or structural phenomenon, the decreased activity at a number of very upscale properties acts like a wave crashing down on revenue managers’ choices and their coherence with the prices on a single marketplace. It is fundamental to observe this evolution throughout 2015, which appears to be difficult, in order to guarantee that a balance throughout the pyramid, which has been fairly respected in recent years, will not be overthrown.