The convergence of luxury brands and hospitality

The notion of luxury has moved beyond the possession of items such as high-quality exclusive products towards experiences personalised to reflect unique individual choices, values, and image. Brands across retail, hospitality and the arts are responding to this trend by collaborating to create brand identities that offer experiences centred on lifestyle, authenticity, and exclusivity.

Experiential luxury

Experiential luxury, encompassing hotels and exclusive vacations, food, wine and furniture, is poised to lead the luxury market. Research suggests that experiential luxury, which includes tourism, wellness, and gastronomy, will grow faster than material goods, capturing more than 35% of the total global luxury market by 2030. Additionally, 70% of affluent individuals in a recent survey stated they would like to have more community groups where they can regularly meet and socialise with similar individuals.

High net worth individuals (HNWI) agree that a presence in the lifestyle segment can benefit retail and luxury brands’ core business, with 70% of surveyed HNWIs stating that dining and hotel brand extensions have a positive impact on how they perceive fashion and beauty brands. Furthermore, over 30% of surveyed HNWIs are more likely to purchase from a brand’s home collection after experiencing their branded hospitality services.

We are seeing the application of fashion concepts, aesthetics, and branding within the hospitality sector, as well as the incorporation of hospitality elements in the world of fashion retail through unique collaborations and cross-branding efforts. These alliances not only create new revenue streams and scalability but also extend customer touchpoints and build greater brand affinity.

Fashion brands entering the hospitality sector

Luxury fashion brands, in particular, have ventured into the hospitality space by launching their own hotels, where they can showcase their design ethos, lifestyle and values in a physical, experiential setting. These properties often serve as extensions of the brand, embodying its aesthetics and providing guests with a fully immersive brand experience.

Luxury branded hotels

A well-established luxury fashion brand announced its plan to transform its corporate headquarters in Paris into a mixed-use site, including a pop-up experiential space, which featured exhibitions, a café, a gift shop and a chocolate shop. Owned by the Ferragamo family, the Lungarno Collection is a group of luxury hotels and restaurants, representing the spirit of the brand and incorporating its branded products in every room, as well as displaying original Picasso and Caravaggio paintings from the family's private collection on the walls.

Luxury branded residences

The concept of luxury residences is based on an affiliation with a prestigious brand, often designed and curated by renowned fashion houses, providing affluent clientele an exclusive lifestyle experience. Available for purchase on the open market, it also offers residents access to exceptional, hotel-quality services. Research suggests that the branded residence sector is expected to grow by an average of 12% each year up to 2026. Prestigious brands from non-residential sectors such as fashion and automotive have all expanded their presence into the branded residence segment across major cities around the globe.

Brand driven experiences

Luxury brands are incorporating dining spaces and travel experiences within their lifestyle concept, creating a seamless integration of fashion, art, design, travel and gastronomy. Fashion powerhouses are hosting brand-driven culinary events to engage with their customers in a new and immersive way. Fashion and hotel brands have also entered into strategic partnerships, for instance, resurrecting a historic train brand for luxury travel experiences.

Designer collaborations

Fashion designers and hotels are collaborating to create unique experiences. These include designing exclusive spaces, limited-edition products and bespoke fashion services for guests, such as styling sessions and custom wardrobe selections. Fashion designer Diane von Furstenberg collaborated with a luxury hotel in London to design a series of suites, incorporating her iconic prints and bold design elements into the interiors. Other designer partnerships include producing limited-edition signature products, seasonal pop-up shops, limited-time boutique and regular capsule collections for distinctive seasons.

This trend represents a strategic move for fashion companies to diversify their offerings, create immersive brand experiences, tap into new revenue streams and foster brand loyalty that extends beyond traditional retail interactions.

Hospitality brands diversifying into retail

The arrival of luxury retail brands in the hospitality market has increased competition and has pushed hospitality businesses to adjust to the evolving demands of the luxury segment. In response, iconic hotel brands are expanding into retail and other lifestyle propositions, recognising that affluent guests want the hotel experience to extend beyond their stay into other areas of their lives.

Proprietary designs

The Equinox hotel and fitness group, which promotes a holistic, health-focused lifestyle, has introduced "The Art + Science of Sleep" concept. This luxury brand partnered with manufacturers to design a proprietary, all-natural sleep system sold in its shops alongside other products ranging from clothing and accessories to wellness offerings.

Retail and merchandising

Boutique hotels with an on-site or online shop (or both) can be an important part of building out a memorable luxury experience that goes beyond their stay. The Standard Shop, the Standard hotel group's on-site and e-commerce retail arm, offers a curated mix of branded holiday items, unique pieces from local and international artisans, rotating pop-up shops, and exclusive, limited-edition merchandise celebrating the brand's core customers.

Diversification

Luxury hospitality brand Aman recently launched Aman Interiors, a furniture and décor studio and interior design service, marking the next step in the brand's vision to expand outside its hotels and resorts propositions. Additionally, Aman Essentials provides a curated selection of high-end products, including skincare, Italian leather goods, and fragrances.

By leveraging the prestige of their brands beyond hospitality offerings, hotel companies can enhance their presence, drive direct bookings, and build loyalty, in part by reducing dependency on online travel agencies, and ultimately driving growth and revenue while retaining exclusivity.

Research forecasts 28% global population growth of HNWIs over the next five years, presenting a positive outlook for brands aiming to cater to this segment. To thrive, hospitality businesses must embrace innovation and craft unique, compelling experiences that stand out in an increasingly competitive landscape.

Key considerations

• What key factors attract consumers to luxury brands, and how can your hotel incorporate similar elements into its propositions?
• What strategies can you implement to enhance the overall guest experience and effectively compete with luxury-branded hotels or hotels with brand collaborations?
• Should your hotel consider collaborating with a luxury brand? If so, what specific benefits or value could this collaboration bring?
• How would such a collaboration impact your hotel's brand identity and market positioning? What are the potential risks and challenges?
• How would your existing customers and target market perceive this collaboration?
• What level of control and autonomy would your hotel retain in the collaboration?
• Should you consider diversifying or leveraging your brand name in other sectors? If so, how could you leverage your existing customer base?