Who is paying these outrageous room rates?
That pool of travelers is deeper than you think.
Happy Saturday everyone, and apologies for the late letter. But, it’s a long letter and I’m removing the paywall to make up for my tardiness.
Enjoy!
I’ve just spent a few days in LA at the SmartFlyer CORE conference. If you don’t know about SmartFlyer and you invest in hotels, I’d be pleased to take credit for this discovery.
While having dinner at the equestrian restaurant at Castello di Reschio, an American couple sitting next to me and my husband offered us a bottle of nice wine that they couldn’t finish. The next morning, we got to talking at breakfast as one does at an intimate 36-key hotel. They’re from New York and are seasoned Italy travelers.
A couple weeks later, I happened to run into them again at Passalacqua! It turns out that the wife is a luxury travel advisor with SmartFlyer, a platform on which her agency is one of the top producers. I learned that she’s known to send a lot of business to some of the best hotels in Italy. If there’s someone who knows luxury hotels in Italy really well, it’s her.
Have you ever found yourself underwriting an ambitious ultra luxury hotel development and questioning: how are there so many people who willingly pay these outrageous ADR’s? From the perspective of someone more focused on building conviction on underwriting assumptions of a hotel project, I have to admit that I hadn’t taken the time to look deeper into the components of hotel revenue to get a solid answer to that question.
The answer is that hotel sales at this level are driven by high-touch relationships. These travelers are not the ones who have multiple booking.com tabs open, nor are they trying to game credit card points. They entrust travel advisors like the woman I met at Reschio to plan trips that oftentimes exceed well over six figures.
At the conference, I had the opportunity to learn about the other side of the business and what it takes to sell these expensive hotel rooms to people who don’t sneeze at a $100,000+ holiday, and why AI can’t replace relationships nor the human touch required to execute travel at this level. I’d boil it down to these four key points below:
Getting to know their clients
There is a level of intimacy and trust between clients and their travel advisors, so that they can exercise the appropriate discernment and curation in designing a highly satisfactory trip. A great travel advisor also knows how to incorporate elements of “surprise and delight” throughout your trip that make you feel seen.
Experience destinations and itineraries themselves
Seeing a property, boat, plane, or experience online often differs from experiencing it firsthand. The best travel advisors do the latter in order to sell them more effectively while developing their own taste.
Orchestrating frictionless logistics
Private plane or boat travel, transports in between, activities, private security, restaurant bookings, help for the kids, etc, usually require a bit of Jenga. It’s one aspect of high-end travel that when executed well, feels unnoticeable and smooth, but when executed poorly, can ruin a whole trip.
Relationships with GM’s and local operators
One of the most important functions of an excellent travel advisor is the ability to build solid relationships with GM’s and local operators to make the impossible happen. These relationships grant access to experiences that simply aren’t available to everyone. Back to the point of logistics: you might need to have four interconnecting suites at a fully-booked hotel during peak season for a family. Or back to the point of “surprise and delight": you might want a private viewing of a cultural monument at an unexpected moment. One could argue that these are things that money alone can’t buy (but rather, a combination of money + relationships).
It’s worth noting that beyond SmartFlyer’s advisors, there were several representatives from hotels also present at the conference: GM’s, sales teams, and owners, including Maurizio Orlacchio at Borgo Santandrea, who I previously interviewed for my “In The Room” column. Doing business is one thing, but let’s not forget that the essence of hospitality is welcoming guests and the passion for serving others. For this reason, hospitality is fundamentally a human business, and AI can’t replace those human aspects in a meaningful way at the high-end segment.
We often focus on design and guest experience when it comes to luxury hospitality, but I left the conference with the conclusion that relationships are the underrated competitive advantage in this business.
If you’re new here, or want to catch up on the best of The Stanza, I’d recommend that you start here.
In today’s newsletter:
It’s a busy start to 2026 for French hotel investors
Will the bet on yacht cruises pay off?
How will yacht cruise operators win younger travelers and retain them as they age?
Why does it make strategic sense for hotels and restaurants to collaborate with each other? (It’s not only about “brand awareness”)
How can boutique and independent hotel operators take better control over their distribution?
Read previous issues of The Stanza here.
No new listings this week.
Other opportunities currently live:
Investment opportunity: Ultra-luxury hotel & branded residential development in downtown NYC
For sale: Fully-entitled hospitality site in West Hollywood (~45,000 SF)
Investment Opportunity: Ultra-luxury hotel & residential development in Hudson Valley New York
For sale: 18th century Georgian building in London Mayfair, which could be a private residence or members club (25,000 SF)
Investment opportunity: The “Chiltern Firehouse-meets-Chateau Marmont” of Sunset Harbor, Miami
For all live listings (hotels for sale, investment opportunities, open job roles), click here.
Advertise with The Stanza Classifieds: via classifieds@thestanzamedia.com.
Some interesting transaction data points in Paris/Nice:
Family-owned hotel owner/operator Compagnie Hôtelière de Bagatelle acquired the Hotel La Pérouse, a 4* 53-key boutique hotel in Nice, for ~€60M (~€1.13M/key). The prior owner, a JV between PE fund Extendam and family office Cèdre Capital Familial, acquired the hotel in 2021 and completed a major renovation, which had not previously been done since the 90’s. According to Extendam MD Matthieu de Lauzon, the project achieved an IRR exceeding 20%. As they acquired the asset 5 years ago, that means they’ve more than doubled their all-in basis.
How much does it cost to buy a value-add hotel in central Paris (15th arrondissement)? A JV comprising owner/operator Alfred Hotels, Braxton IM, and Indosuez Wealth Management acquired the 3* 43-key Hôtel Lecourbe for ~€17.2M (or ~€400,000 per key). The group plans to spend €2M in capex, and presumably open under the Alfred brand, which looks like a solid city boutique hotel option: not fancy, but clean and reliable.
A private investor acquired the 43-key Hôtel Filigrane & Spa in Paris from French asset manager Osae Partners for €36.5 million, or ~€850,000 per key. It’s another 4* central Paris boutique hotel that was acquired in 2022, renovated for 2 years, and sold after 1 year of operations.
Another exit comp in central Paris: a private investor has acquired the Grand Coeur Latin Hotel, a 4* 75-key hotel in the 5th for €70 million, or ~€933,000 per key.
The fact that 4* independent/boutique hotels in Paris are now trading close to €1M per key reflects the new reality we’re living in (the “experiences over possessions” thesis). It also makes me question how they’re underwriting exit yields.
L Catterton and Cedar Capital Partners are acquiring the Penha Longa Resort & Hotel in Sintra, Portugal for €140M, or €686,275 per key, from The Carlyle Group. Penha Longa is managed by Ritz Carlton, and the photos of the golf resort show that American boomer generation interpretation of luxury hotels (I don’t know how else to describe it). L Catterton is also partnering with Cedar Capital on the acquisition of the 170-key Garden Beach Hotel in Juan-les-Pins, which has been closed since 2020. Looking at Cedar Capital’s portfolio, it seems that their strategy is acquiring large format luxury hotels in prime resort markets. Some standouts: The Carlton Cannes, Monte Carlo Grand, The Savoy, Hotel Martinez, Auberge Collegio alla Querce, Villa Honegg and Sundance Mountain Resort.
There’s an ongoing thread in this newsletter on the arms race to corner the “yacht cruise” segment. Yesterday Aman opened bookings for its Amangati yacht in 2027. The first Four Seasons Yacht launches in March of this year. Orient Express’ Corinthian launches in spring 2027. And you all probably remember the spectacle that was the launch of the Ritz Carlton Luminara last summer. Interestingly, cruise was its own theme discussed at the SmartFlyer conference as a growing travel trend, but it was segmented into three categories (the bullets below are from their keynote presentation):
True luxury cruise leaders
Yacht-style cruising
Ultra-luxury ocean & expedition lines
High-touch, design, and service-led product
Expedition & river cruising
Reinforce the “considered journey” theme
Growth is coming from educational, destination-immersive travel, not casual cruising
Large scale brands
Solve for different needs (families, groups, accessibility, value-perceived luxury)
A hotel person asked me recently if I think that yacht cruising will actually become a “thing”. My answer was that I’m not sure if it will become popular in proportion to how much capital is being invested in yacht cruises by the major brands. To me, a “yacht cruise” is essentially an elevated form of the cruise, with a nice marketing spin to it with the usage of the word “yacht”. Although I haven’t experienced one myself, and while they look undoubtedly luxurious, there’s not much storytelling in the design of the boats themselves or in the way they’re being marketed online. Because the general consensus is that high-end travelers are not regulars on cruises yet, and because the word “cruise” still carries a bit of a negative connotation, these brands have work to do in creating and selling the experience in a way that converts skeptics into regulars.
I recently read a review of Paula Sanders’ experience on board The Ritz Carlton Evrima (for context, Paula was formerly the Global Head of Membership at Casa Cipriani). She made an interesting observation on attracting younger guests and retaining them through various phases of life: “Win a guest at sixty-five and you may have them for ten or fifteen years. Win them at thirty-five and you may have them for forty or fifty. That difference matters.” She then went on to comment on the lack of engaging programming that is necessary to satisfy a younger crowd.
Another key aspect of the yacht cruise experience, which is typically limited to a tighter capacity, is the curation of guests. Who are these cruises for? If you’re essentially stuck on a boat for a week, you want to know that you’re not stuck with an incompatible crowd. At the moment, it’s not clear to me how these brands are approaching guest curation.
As mentioned at the beginning of this section, this thread on the evolving yacht cruise business is ongoing, and if you’ve experienced one, I welcome your thoughts in my inbox. Also, paid subscribers of The Stanza are welcome to send question suggestions for my podcast guest line up, which include a CEO of a brand expanding into the yacht cruise space.
There’s another ongoing thread re: hotels and restaurants collaborating more. I’d say that this is a far more effective way of marketing than “hospitality fashion merch”, which we’re all mostly tired of by now. Some interesting examples: Il Pellicano at Claridge’s, Sant Ambroeus and Harry’s London at The Alpina Gstaad. These activations tend to be short (1 - 2 weeks) and focus on the F&B component to give hotel guests a glimpse of the experience they would have at the visiting collaborator.
I reached out to The Stanza podcast alum Gaetano Guarducci at Sant Ambroeus to ask why they did the pop-up at The Alpina. His response: “It was a brand-building initiative designed to introduce Sant Ambroeus to a market that historically had limited direct engagement with us. The activation helped drive incremental foot traffic through the property, increased on-site energy, and created a sense of momentum that benefited both brands. It also generated inbound interest and conversations that extend beyond the market itself, particularly as we evaluate future opportunities in regions such as the Middle East and London.” That last point is what made the most strategic sense to me. If you’ve listened to my interview with Gaetano, you’ll know that his family business raised money from Three Hills to expand to new markets. The Middle East is a particularly compelling region for several hospitality groups right now given its pro-business regulatory environment and high disposable income. It’s a good example of how a collaboration such as this can be more than a brand exercise without quantifiable results and a means of attracting the right interest that can open doors to new markets.
This morning, Air Mail published this very relevant article written by Sheila Yasmin Marakar, who coincidentally moderated the keynote presentation with Selma Blair at the SmartFlyer conference. How timely! She wrote about how seemingly independent boutique hotels are increasingly distributed by the Marriott’s and Hyatt’s of the world, which undoubtedly have the most powerful aggregated distribution systems. However, one major theme in hospitality is shifting distribution mechanics. At the ultra luxury segment, I discussed the relationship aspect in the intro of this email. But at every other level, a big driver of hotel bookings are from these unavoidable platforms. Design Hotels, which is owned by Marriott, represents 300+ boutique design-led hotels. Marriott also has The Luxury Collection, which counts crowd-favorite Hotel du Couvent as part of its distribution program (Hotel du Couvent is not managed by Marriott; it’s independently operated). In exchange for visibility on booking platforms and validation for being selected as part of a curation (eg: Leading Hotels of the World), these hotels pay a commission on booked rooms, and guests receive nice incentives such as a cocktail upon arrival, free upgrade, late check out, etc.
Here’s a relevant excerpt from Sheila’s article:
But “feeling” is the new front line in a corporate land grab. For decades, giant hotel chains built their empires on consistency—the promise that a room in Des Moines would look exactly like a room in Dubai. Now they are pivoting to the opposite.
“There is a big demand for unique, high-end properties,” Scott Mayerowitz, a travel-industry consultant, says. McKinsey & Company predicts that global spending on luxury hospitality will exceed $391 billion by 2028, up from $239 billion in 2023. But to access that money you need visibility. “The biggest challenge for a truly independent hotel,” Mayerowitz adds, “is getting people to know about them.”
The irony is that to remain a “hidden gem,” an independent hotel must now be plugged into a global switchboard, or benefit from big money. In recent years, private-equity firms and hotel conglomerates have developed a quiet but unmistakable crush on luxury boutique hotels—drawn to their high profit margins, flexible branding, and the rare opportunity to make real estate feel editorial. In 2018 alone, private equity was behind 37 percent of all U.S. hotel acquisitions, totaling more than $11 billion. Today, when taste is seen as a kind of currency, a stylish hotel with a strong point of view offers something even safer than a bond: cultural relevance, with room service.
As consumers are increasingly spending on hotels, I don’t doubt that there are better ways to drive direct business in the near future. On one side, it requires more effort from hotel operators to become better storytellers on social media, which is ultimately the most powerful distribution engine of any product. This makes me think of my conversation with Frederic Biousse and Linda Hazi, who raised money from LVMH to start a boutique chain of hotels called Fontenille Collection. In the interview they mentioned that they get a lot of direct business through their social media channels, which stuck out to me given it looks like they don’t engineer their content for virality.
On the other side of this, however, is that no amount of distribution can float a hotel where the experience falls short of price-driven expectations. One bad review on social media can be influence others to avoid a hotel or cancel a booking. So I’m ending this newsletter with this thought: how can hotels manage online perception and subsequent guest expectations through social media?
My favorite thing to read in bed on a Saturday morning.
Love that you got to join us for CORE! And that you met Judy at Reschio and Passalacqua—she’s just the best.