We throw the word "luxury" around a lot in the travel industry. But what does "luxury" really mean? Sometimes the more you load a word with meaning, the less definition it ends up having. Case in point: "boutique hotel," right?
A few weeks ago I spoke with Deloitte's Maggie Rauch about the firm's 2025 summer travel survey. Deloitte asked Americans about their luxury travel plans, and I really like how they worded the questions: They asked people to weigh what they considered "attributes that make a hotel luxurious" rather than assume a universal definition.
As a result, they got some great breakdowns that point to how different generations define luxury. You'll have to listen to the podcast I recorded with her for all of it, but the summary is that most agree that "extraordinary location" is the top attribute of luxury, and then most agree that service level and room comfort also play big roles. After that, different generations go a little off the tracks: Millennials, for example, prize hotel design above all else when defining a luxury hotel. Gen X say brand name is super important in luxury. Who knew!
Of course generally accepted luxury hotel benchmarks exist, such as average daily rate, service level, amenities, number of bathroom fixtures, all of that. But the point here is that "luxury" means different things to different people.
Try this: Ask some colleagues or friends what attributes make a hotel luxurious to them. You'll get a lot of different answers. I asked my newsroom their definitions and I got everything from "location" to "walk-in shower instead of a tub with a curtain" to "personalized service" to "an uninterrupted night of sleep."
So many of those things have nothing to do with the hotel's price point. Interesting, right?
The luxury hotel chain-scale segment is under more pressure these days than it was, say, a year ago when the ceiling of demand and spend seemed limitless. Luxury chains succeed when the industry can put a price point on the level of service, amenities and overall operations it takes to make the cost-benefit analysis pencil, and enough people are willing to pay that. In other words, "luxury" often corresponds to "a lot of people are willing to pay a lot for what we offer."
As consumer confidence wavers here in the U.S. and even wealthy people start to feel the bottom of their wallets, we'll see luxury hotel demand drop off on paper. The Deloitte survey showed that even the highest-income travelers are more price-sensitive this year than they were last year when planning travel.
So it comes down to finding your audience for your hotel, regardless of where you sit on the chain scale. If you can find the people who consider what you offer to be luxurious to them, well, you nailed it.
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