In a K-shaped economy (one of the biggest buzz-phrases of the past year), luxury travel is especially valuable—and developers and operators alike are paying attention to growing demand.
Steady Demand
According to the Q2 2026 U.S. Hotel Construction Pipeline Trend Report from Lodging Econometrics, the luxury chain scale reached a record-high project total at the end of the quarter with 103 hotels and 25,496 rooms in development, up 12 percent in projects and 21 percent in rooms year over year. During the second quarter of the year, Marriott’s luxury and resort category reported increases in revenue per available room of more than 9 percent, and President and CEO Anthony Capuano denied “rumors” that luxury demand would “run out of steam.”
Similarly, more than 20 percent of Hilton’s openings in the second quarter of the year were in the luxury and lifestyle segments, and of the company’s signings in the quarter, 36 percent were in the segment.
Guest Experience
With so many luxury properties competing for attention, personalized guest experiences have become the key to maintaining loyalty and driving demand. “Today's high-end traveler isn't price-shopping; they've decided the experience is worth the rate,” said Caroline Dyal, SVP operations – lifestyle & luxury at Crescent Hotels & Resorts. Upper-upscale demand is more elastic, tracking closer to broader market cycles and rate-driven shifts, she noted, while the Lifestyle segment operates on a different value proposition entirely. “It's not a luxury substitute; it's a distinct segment with its own demand base.”
Performance across all three follows properties with a clear identity, but luxury specifically wins right now because affluent travelers have made a lasting habit of paying for quality over convenience, she said.
Hilton’s Conrad hotels have a 1-3-5 program that will help guests find things to do when they only have a few spare hours, said Dino Michael, senior vice president and global category head, luxury brands & branded residential at Hilton. “This is an itinerary and a program that's been developed by our team members,” he said. “There is a real yearning by guests to say, "Please tell me where to go that is unique, that is calm, that I can really enjoy.’ … And I think that's where brand trust and brand love comes in, and that's how we really emphasize experience.”
Claudia Kozma Kaplan, chief brand officer for Raffles and Fairmont Hotels and Resorts, echoed the sentiment. “Luxury today is far less about display and more about feeling,” she said. “It’s about time well spent, emotional connection, authenticity and wellbeing.” As such, the company curates locally rooted experiences through its Special Happens collection and has embedded wellness across the guest journey. “Travelers still expect beautifully appointed rooms and memorable dining, but they are increasingly choosing stays for curated, authentic experiences and wellness that fits their personal rhythm.”
Logistics
The guest experience determines how hoteliers train their on-site teams and how those teams are structured, Michael said. But creating these experiences, however, can prove challenging, especially when many hotels are working with fewer team members than they had in years past. “To deliver against [guest] expectation, you must have ample staff and extensive training programs,” said Steve Contos, executive vice president at Davidson Hospitality Group. “Today’s labor market continues to be challenging with significant turnover; therefore, creating a culture of servitude and taking care of your team members is paramount.” Having the correct staffing levels is essential to the guest, Contos continued, especially when rates are at their highest historical levels. “That’s acceptable to the luxury guest—provided their needs are exceeded and [the] quality of offerings is at a premium level.”
“Luxury service runs on tenure,” Dyal said, noting the bartender who remembers favorite drinks and the concierge who knows the neighborhood as particularly valuable. “That knowledge isn't hirable overnight.”
To help retain workers, Crescent gives on-property teams “real authority” and direct access to leadership, she said, “rather than routing every decision through corporate layers. Retention is the luxury labor strategy. Everything else is a workaround.”
But even with the right number of team members on site, those team members may need to adapt to a more hands-off approach. “Guests want attentive service where it matters and speed where it doesn't,” Dyal said. “That's pushing labor away from transactional touchpoints—check-in, routine requests, anything to move faster without losing quality and toward the moments guests actually remember.” This can show up in the food-and-beverage department, where restaurants are now staffed to compete with the best standalone restaurants in the market rather than as a hotel outlet, she said. “It shows up in the arrival experience, where a guest recognized by name matters more than a scripted greeting. It shows up in how a property allocates its best talent: placing them at points of the stay guests will actually talk about, rather than spreading service evenly across every interaction.”
Priorities
So what should hoteliers focus on when creating the experiences that keep guests engaged? Contos emphasized food-and-beverage, wellness, sustainability and guestrooms that are “conducive to a serene environment.” Notably, hotels that have room configurations that allow for generational and family travel will continue to be in demand, he added.
“Flexible spaces that keep pace with evolving guest behavior matter just as much [as F&B],” Dyal said. “Technology does as well, but specifically technology that increases efficiency in service delivery without stripping out personalization and property identity that make an experience feel considered rather than transactional.” For owners, she added, the investment priority is “whatever makes the asset harder to replicate.”
Wellness continuity—“the idea that wellbeing should not be an episodic add on during a single stay, but an ongoing, measurable lifestyle service that supports guests before, during and after travel”—is an underestimated trend, Kaplan said. “Too often, wellness is treated as a one off spa visit. The real opportunity is to design programs that help guests sustain routines, optimize recovery and see tangible outcomes over time.”
Maintaining wellness turns a single stay into a lasting relationship that “genuinely improves how a guest feels and performs in life,” she added. “It also allows us to deliver wellness in ways that respect privacy and feel human. This requires wellness to be approached holistically.”
Ultimately, Dyal said, the quality of the individual guest experience is more of a key the differentiator in luxury rather than the property itself.
“The underperformers are generically excellent, beautiful but interchangeable, while the winners deliver service that feels personal rather than polished,” she said. This requires anticipatory service, with teams empowered to act on guest preferences before a request is made, recognition that carries from stay to stay and a “level of discretion and consistency” that cannot be replicated by a competitor's renovation budget.
“Physical product gets a property into the competitive set; emotional connection is what wins the rate premium and the repeat guest,” she said. “Successful luxury properties are the ones guests describe by how they were made to feel, not by what the hotel looked like.”
This article was originally published in the August/September edition of Hotel Management magazine. Subscribe here.