Crossing the Luxury/Digital Divide in Hospitality

What is luxury service?

It’s a question often posed on general session conference stages or in media interviews with hoteliers; designed to give insight into how those operating at the highest levels of the industry are using personalized experiences to increase revenue.

The focus on the essentials of service underscores the distinction between luxury goods (high quality/high price) and luxury services (individualized/anticipatory). While hotel owners are typically happy to invest in luxury fixtures and fittings as they increase the asset's value, more is needed to attract the next generation of luxury travelers. Amex found that 79% of Millenials and Gen Z value unique, one-of-a-kind travel experiences; the kind of experience that can only be delivered by a property that truly understands the value of exceptional service delivered by an exceptional team.

Can Your Service Justify Your Price?

This renaissance of the experiential economy is being felt across the industry with global events such as Taylor Swift’s tour helping to support ADR growth while occupancy starts to flatline. While this has helped support RevPar globally, STR reports that business confidence is starting to trend downward. This has left many hoteliers concerned that rates are not sustainable as inflationary pressures lead to guests questioning the value that they are deriving from a hotel stay and in many cases finding that the luxury ‘goods’ portion of a stay are not true value adds when compared to luxury service. Savvy hoteliers are realising this, and as in other luxury sectors from fashion houses to jewelers; they are beginning to understand the value of a seamless blend of digital and in-person service delivery. 

This change in mindset is already gaining traction. While Bloomberg recently suggested that true luxury begins at £1,000 per night, Forbes VP for Europe, Chris Fradin, notes a completely different shift away from assets being the definition of luxury.  Forbes and many other standard bearers of luxury hospitality have called for a complete redefinition of what luxury means—emphasizing authenticity, one-on-one relationships, and personalization at scale.

This recognition from one of the most globally prominent verifiers of luxury service is crucial as consumers are already becoming desensitized to the opulence of luxury goods. Marble columns or beautiful front lobbies are table stakes now, and the difference between the truly exceptional hotels of the world and everyone else is the quality of the experience and the

relationships that they can build with their guests to keep them coming back. 

Technology To Enhance The Experience

Traditional ROI metrics fail to account for the space luxury hotels inhabit within the experiential economy in 2024. This is regardless of any potential increase in ancillary spending that technology can help facilitate. Delivering an exceptional experience for anyone who enters their hotel is the ​​raison d'etre for luxury hoteliers. Whether you are stopping in for a cup of coffee or spending upwards of £1,000 per night for a room; the best hotels in the world will deliver a remarkably personal level of service regardless of any potential monetary return. These masters of hospitality simply understand the strength of their reputation and the power of true anticipatory service to drive repeat business. 

Previously as a General Manager of a boutique luxury hotel in Knightsbridge London, I was acutely aware of this. The property and “luxury goods” were finished to an exceptionally high standard but we lacked many of the facilities our competitors offered. To overcome this disadvantage; my guest-facing teams and I had to make sure that every single person who walked through the doors was treated as if they were returning home. As soon as people were made to feel welcome and understood in this way they would immediately open up to us and allow my team to start to build up a detailed profile of who they were so we could meet their needs. By ensuring my teams had the right technology to store this information profile, with the right tools to engage guests on their terms we greatly improved our capability to ensure that we could tailor their experience to them.  This practice alone opened up way more opportunities for high conversion upselling than any single direct-to-consumer pre-arrival marketing could ever accomplish.

While technology can be used to increase personalization opportunities and give guests more choice as to how much of their service experience is digital vs in person, sometimes it can surprise you simply with its availability and immediacy. A few years ago, the hotel I used to manage received a WhatsApp message from the brother of a gentleman who had stayed with us the previous week with his family. The brother who messaged us was staying at a nearby competitor and was extremely disillusioned with the experience. When he messaged us he shared that we had taken such good care of his brother’s family that he wanted to come and stay with us. Within ten minutes we had agreed on a suite for him and had his room ready just as he arrived from the other property, all within half an hour. As this was London, there was no shortage of options for him to book. Still, our reputation for hospitality coupled with drastically shortening the booking cycle meant we were able to move quickly to secure a new loyal guest. Technology facilitated this booking but it was the service delivery of the team that brought the guest to us and kept him with us. 

Redefining Success

For modern hoteliers, the challenge is to effectively balance digital and in-person luxury experiences. Often, the solution doesn’t sit with the technology itself, but instead how performance is measured when technology is used. 

As supply has continued to expand dramatically;  traditional financial metrics have been viewed as the defining success factor for hotels but as EHL Insights notes, traveler demand is shifting back towards the experience and away from goods. This is where the difference between luxury service and everyone else becomes apparent. 

Luxury brands, while knowing conventional performance metrics are important, prize other metrics such as Net Promoter Score (NPS) and Customer Lifetime Value (CLV) in conjunction with internal metrics that are focused on staff wellbeing and their capabilities to forge relationships with guests. By focusing on superior guest satisfaction as a competitive advantage in an oversaturated market, hoteliers can grow the top line for their owners.  

Evolving Your Digital Experience

Just as every hotel is unique, every digital experience is equally as unique to that property. There is no one-size-fits-all technological solution, not all hotels need an AI chatbot and digital keys aren't for every property. It’s important to focus on what truly works for you, your teams, and your guests. The following points are a good starting point to help you develop your own luxury digital experience. 

1. A thorough digital and in-person journey mapping exercise is essential to ensure an exceptional digital experience. Understand which touch points overlap and ensure the digital experience matches the in-person experience. As preferences change your guests want the choice to interact with your hotel in a way that suits them, be that in person or digital and you have to deliver on that experience. There are tools online like Smartsheets, Monday.com, and LucidChart that have templates to help you map your journey out.  Many of these apps have free versions or trials that are long enough to give you what you need.

2. Focus on functionality for how your guests interact with your staff. Don’t view every digital interaction as an opportunity to upsell or reduce cost and think about how technology can be utilized to enhance the experience (NPS is a useful metric to track this). Part of the magic of luxury service is that everything happens seamlessly at precisely the right time, ask yourself whether your technology solutions are helping your guests get what they want at that moment in time, and if your staff can easily deliver. 

3. Refresh your standards based on the first two points. Do you have defined digital standards that you expect your teams to meet and are they reported on? Has your brand tone of voice document been updated to include instant communication? Are emojis acceptable? The best luxury hoteliers are thinking about these things and you should be too. 

4. Finally, be realistic, in a world where everything is a data point that can be captured and reported on, sometimes there can be too much. Figure out what data is important to surface for specific teams at set stages of the guest journey to give them the best opportunity to deliver a personalized in-person experience and ensure it is operationally actionable.