Hotel brands check into new verticals

Leading hotel companies are stepping beyond the traditional hotel stay to offer bespoke experiences and strategic partnerships that benefit both guests and their bottom line.

Take ultra-luxury hotel group Aman, which offers a personalized experience for up to 18 guests to travel on a private, branded jet to their properties around the world. Meanwhile, guests at luxury hotel group Four Seasons can embark on a 95-suite superyacht next year, sailing through the Mediterranean and Caribbean.

Experiences like these are becoming increasingly common as hotels ramp up their non-traditional offerings, particularly since the pandemic.

“The expansion into new verticals isn’t a new development, but the pandemic spurred hotel brands to unleash their creativity,” says Marina Bracciani, Vice President, APAC Hotels Research, JLL Hotels & Hospitality Group.

“In the face of disruption, hotels had to innovate to wow and retain loyal guests while diversifying their revenue streams,” she adds.

Several brands are venturing into the realm of branded residences.

For luxury hotel groups catering to high-net-worth individuals, such as Four Seasons and Mandarin Oriental, it’s a natural evolution and extension for the business, Bracciani says.

But these new ventures also come with the inherent risk of falling short of expectations and not delivering on the brand’s promises.

“Innovative experiences and partnerships can elevate a brand’s value and perception, but only if done right,” warns Jessica Jahns, Head of EMEA Hotels Research, JLL Hotels & Hospitality Group. “Poor quality and execution can just as quickly erode trust in the brand.”

Despite the potential pitfalls, hotel brands, driven by the need for diversification and fresh revenue streams, are undeterred from embracing these non-traditional verticals.

With tourism on a strong recovery track in 2024, the opportunity for growth is massive, Bracciani adds. In 2023, global revenue per available room (RevPAR) exceeded pre-pandemic levels by 12%, with further growth projected this year, JLL data shows.

“Hotels will continue to stay true to their core focus and remain dedicated to guest accommodation and experience,” says Bracciani. “But at the same time, they’re adding value through these new ventures that enrich the guest experience and build loyalty.”