The post-pandemic recovery has ushered in a golden age of high-end luxury hospitality. Pent-up demand, growing affluence, and the revenge travel boom are driving luxury real estate to record occupancy and occupancy rates. Many hotels have responded by leaning into luxury: more exaggeration, extravagance, and over-the-top expressions.
But the pendulum may now be swinging back.
A growing group of wealthy travelers are becoming weary of conspicuous consumption in hospitality. They are unfazed by personal butlers, gold-plated fixtures, excessive amenities, and exorbitant room rates that fail to provide value. Instead, these “post-luxury” consumers are looking for a different kind of experience: discreet, thoughtful, and highly personal.
The question for hospitality leaders is how to respond to this emerging market.
Signs of consumer fatigue
Room rates at many luxury accommodations are soaring, and some brands are testing how much wealthy travelers are willing to pay. But service levels haven’t always kept up, leaving guests disillusioned.
Luxury hospitality, despite its successes, is showing cracks. According to a report by luxury travel advisor Embark Beyond, “Customers are increasingly pushing back against exorbitant pricing. The ultra-rich have never been richer, but now many People are saying, “That’s not right.”
Some even find this pricing insulting. This also shows that the wealthiest travelers, who spend the most money, are also the ones most wary of being exploited.
Frequent travelers say their earnings are down. Guests paying $2,000 a night may tolerate spotty service once, but repeated disappointments erode trust. There is also a backlash against aesthetic sensibilities. Flashy, over-designed real estate is feeling increasingly out of sync with the values of young, internationally-minded, wealthy people who tend to flaunt their wealth more subtly.
The rise of the post-luxury traveler
This new class of post-luxury travelers has the means to indulge in the traditional luxury of Parisian palace style, but they choose not to. They don’t need adjustments to reflect their ego, stroke them, or affirm their importance.
These travelers have often gained self-awareness through years of business and leisure travel, refined their tastes, and “finished business.” They are not denying luxury, but rather seeking to reshape it. Substance and emotional connection take precedence over flash and drama. Key characteristics of this emerging population include:
Purposeful Design: Square footage is more important than thoughtful design and the flow of the space. They appraise properties with clear vision and attention to detail.
Provenance and ownership: They are drawn to independently owned hotels where the presence and passion of the owners is evident.
Personalized service: Attentive, yet human and honest service trumps cookie-cutter, high-end pretensions and over-engineered service.
Sustainability and community: For this demographic, an excess of pretentious and lavish breakfast buffets feels wasteful. They look at the entire sustainability story, check the BS, and evaluate the ecosystem of suppliers, vendors, and community engagement. Deciding to travel.
New charm of owner hotels
Owner-managed hotels stand out in a market saturated with one-size-fits-all luxury brands. These properties are often run by families or individuals with a strong sense of place and offer something that big brands struggle to replicate: authenticity and personalization.
Ett Hem in Stockholm is a boutique hotel that offers a home-like experience with impeccable design and warm, personalized service. Guests often describe the property as hand-picked and lived-in, rather than manufactured.
Similarly, Bau au Lac in Zurich has built its reputation on consistent excellence. As a family-run establishment, the company prioritizes long-term relationships with its customers over short-term profit maximization. It looks like a traditional Swiss luxury home, but the pride of ownership adds up to something deeper and more meaningful.
Fogo Island Inn in Newfoundland offers high-end design with a mission. Its profits support the local economy and its operations celebrate the island’s heritage. Guests leave with a deeper appreciation for the places they visit.
These owner-managed properties are a long game. Unlike some CFO-managed chains that optimize costs, even Fruits Basket, these hotels prioritize thoughtful details and human connections.
Challenges for major brands
Big luxury brands are facing the challenge of pivoting to meet the expectations of post-luxury travelers. Standardized service models and shareholder-driven profit demands often collide with the desire for technology, depth, and individualization.
However, opportunities exist. Big brands can create smaller, independent, inspired sub-brands, partner with boutique properties, or experiment with an owner-operated model under their umbrella. Hyatt’s partnership with Mr. & Mrs. Smith could be an example of offering loyalty members a more interesting variety of facilities.
Redefining luxury
To be clear, post-luxury is not a rejection of high-end consumption, but a recalibration. It reflects a return to essence, delicacy and the essence of hospitality: a desire to create spaces where guests feel truly cared for and connected. These are consumers who have evolved beyond feeling important and needing a place to cater to their egos and whims. And more affluent consumers are fitting into this archetype.
For hospitality industry leaders, the opportunity is clear. As the pendulum swings away from conspicuous consumption, those who embrace the post-luxury ethos can seize market opportunities.
