Is there still a case for lifestyle hotels?
Playing devil's advocate.
Hello everyone and happy Friday,
I’m mentally preparing for the Coachella of the design industries: Milan Design Week, and will be sharing highlights on IG stories.
If you are coming to Milan for Salone and need F&B recommendations, I compile all my recommended restaurants, bars, and cafes on the AmiGo app. It’s free to use with code THESTANZA. If we happen to be at the same events, please say hello!
Some news:
The Stanza has always operated on a foundation of credibility, unique insight, and storytelling. This is most likely the reason why you find it valuable.
As you know, The Stanza is not traditional journalism. I don’t copy and paste press releases, nor do I “cover”, “report”, or “break news”. I don’t accept inbound interview or feature pitches. All guests, whether for written interviews or the podcast, are invited by me through my personal relationships. This ensures the integrity of The Stanza’s brand and voice, and ultimately, a better experience for you as a reader and listener.
This newsletter is pivoting to a slightly different format to serve you all better. Each Friday, I’ll answer a big question or dissect a pertinent theme in the business of hospitality, with input from my personal network of leaders making decisions that impact the broader industry. The goal is to make each issue insightful, informative, and a genuine pleasure to read.
You can read last week’s issue as an example (paywall removed).
If you’ve been thinking of upgrading, now would be a good time to do it as the current annual price is the lowest it will ever be. Starting Monday, the price of an annual subscription will increase to $250, or the price of a power lunch in Manhattan for two. Paid subscribers are welcome to request topics or questions to dive into on Fridays.
Several of you have told me that this newsletter has helped you prepare for meetings, challenged your perspectives, or helped you develop a concept further. Others have told me that the voice of The Stanza cuts through the industry noise. These notes motivate me to become a better storyteller every day, and I’m incredibly honored to have earned space in your inbox.
Thank you for being part of The Stanza’s evolution.
-Nadine
If you’re new here, or want to catch up on the best of The Stanza, I’d recommend that you start here.
Links to the latest podcast episode can be found here.
In today’s newsletter:
What’s the investment case for design-led lifestyle hotels charging under $1K ADR?
If lifestyle hotels serve a different customer than luxury and ultra luxury, how do you underwrite demand resilience in a segment that is more exposed to discretionary spending?
Richard Caring’s empire of Mayfair members clubs and restaurants just traded at a 24x multiple. What does that say about how institutional capital is underwriting hospitality brands?
Read previous issues of The Stanza here.
No new listings this week.
Current listings:
For sale: Beachfront 5-Star Boutique Hotel in Mykonos
For sale: Fully-entitled hospitality site in West Hollywood (~45,000 SF)
For all live listings & inquiries (hotels for sale, investment opportunities, open job roles), click here.
Advertise with The Stanza Classifieds: via classifieds@thestanzamedia.com.
K-Shaped Hospitality, Part II: The Contrarian Argument for Lifestyle Hotels
It was great to hear such a strong response to last week’s newsletter on the impact of the K-Shaped economy on hospitality. The general conclusion was that while the ultra luxury thesis makes sense on paper, there are some big caveats to that thesis:
Too many operators and too much capital are rushing into this ADR segment, which naturally erodes the returns that made it attractive in the first place;
Most of the product resulting from this “rush” does not occupy irreplaceable and irreplicable real estate;
Most of these operators do not have a unique and strong point of view, and therefore are not effective at telling their own brand story;
They also do not intuitively understand what service means at the luxury level, and it shows through the staff interactions, which will make it difficult to survive the inevitable market contraction when the only paying guests left are the ones who are used to high quality service and experience (the exact HNWI traveler that everyone is chasing).
In today’s context during which capital is rushing into “ultra luxury” on the back of macro data on HNW/UHNW travelers, the contrarian argument surrounds the case to develop lifestyle hotels, not as a consolation prize for those priced out of ultra luxury, but as a category worth building toward on its own terms.
