GLOBAL REPORT—More luxury hoteliers are branding their private suite and residential offerings as demand for privacy and exclusivity grows, sources said.
“A couple of years ago, we started experimenting with serviced residences. Not only was there inventory, it was highly sought out,” said Rob Cornell, senior VP at Preferred Hotels & Resorts. “Very frequently (hotels with the inventory) didn’t even include these units in their reservation system.”
Helping its member hotels achieve global visibility was the impetus behind Preferred Hotels & Resorts launching its Preferred Residences program, which was announced 3 February with a seed group of 18 hotels. Preferred Residences is a collection of villas, bungalows, condominiums and other units available at luxury hotels and resorts across the globe, all of which are member hotels, Cornell said.
“We won’t vary from that,” he said, regarding whether the branding will be offered to non-member hotels. “Many others in the group want this.”
Cornell anticipates growing Preferred Residences’ membership pool by 10% to 15% per year over the next two years. By the end of 2016, he hopes to have 30 to 35 properties in the portfolio. Each of the private units adheres to the Preferred collection criteria, which includes 500 to 700 items depending on the size of the hotel.
Cornell said Preferred uses unannounced inspections to make sure its member hotels are up to par.
"There's a minimum benchmark score hotels have to achieve."
Small Luxury Hotels of the World saw similar interest from its luxury guests, leading the company to launch Private Residences by SLH in October 2014.
“Over the past few years, SLH has seen clear indication that luxury is trending towards exclusivity and privacy,” said Paul Kerr, CEO of SLH. “Customers are increasingly looking for accommodation that offers full luxury hotel services but with added privacy.”
Private residences must be owned and managed by a SLH member hotel, and they must meet the “rigorous quality standards” that SLH’s hotels do, Kerr said in an email.
Linda Bruno, managing director at Consulente International, a marketing firm that specializes in the development and repositioning of luxury, independent resorts, said hoteliers are looking to get their slice of the profits that come with operating private residences for the following reasons:
- Private offerings get a higher price point; and
- the majority of the business comes direct, which cuts down on commissions.
“The cash flow is so much better with the villa concept,” Bruno said, adding that some hoteliers have noticed the success of villas and bungalows in the Caribbean and now want to participate.
Aside from the financial benefit, partnering with global marketing arms such as Preferred and SLH give hotel owners and operators visibility through a new channel. A lot of luxury hoteliers have private units but don’t know how to market them, sources agreed.
“It’s such a unique sell,” Cornell said, adding that trying to book a villa or condominium online is “next to impossible” without picking up the telephone.
For that reason, Preferred has set up a dedicated help desk to take reservations at its hotels with private accommodations. The company also created a workbook with information about the residences to help guide the sales process for each properties, Cornell said.
“To be able to make a unique sale, you have to have a highly trained person on the phone,” he said.
SLH also offers a multi-lingual team of VIP reservation managers who will help consumers from all over the world, Kerr said.
Where hoteliers could fail
Bruno said hoteliers can offer higher levels of service within the context of a private residence.
“(Hoteliers) could help with transportation, babysitting, spa, etc. Take care of that ahead of time,” Bruno said. “The kind of people that take these accommodations are pretty high maintenance to begin with, but they are not very forgiving when the service level isn’t there.”
Hoteliers with private residences need to think more like villa operators (i.e. have a minimum-week stay), she added.
“They’re still hoteliers, so they think in terms of selling rooms on a nightly basis. They’re not looking at the fact that not only could this be a five-night stay or seven-night stay, but if you do it really well, the trend is definitely for people to come back year after year.”