What’s Next For Hotels? A 2022 Global Outlook

The GRI Global Committee's kickoff session on Hospitality took place on April 19th. We gathered C-Level real estate investors, asset owners, operators, and developers from several countries to discuss the perspectives and next trends in the sector during year three of the pandemic. 

Important Takeaways: 

• An experiential standpoint is what will redefine luxury; 
• Well-being is way beyond an amenity; 
• Certification and tools that measure well-being are vital for hotels; 
• Hybrid working environments might change the vacation experience; 
• Hospitality has been innovating in terms of consumer demands 

*Disclaimer: While this review highlights the most relevant topics under discussion, it does not contemplate the full discussion between the Board and all Members. In addition, committee sessions also dedicate time for networking. 

 

Expanding luxury through well being

When it comes to redefining luxury, focusing on an experiential standpoint will be key to attracting the next wave of leisure guests. Notably, most Committee Members were keen to pursue reinvention in health and well-being in the guest experience. It will be the main competitive differential from what consumers may find in the hotel next door. At the same time, delivering vacation experiences in the current scenario asks for flexibility in terms of the consumer’s needs. Innovation with menu engineering aligned with corporate ESG initiatives will be required. 

At this first session in 2022 for the Hospitality Global Committee, Rachel Hodgdon, president & CEO of International WELL Building Institute, was our special guest and brought data suggesting that future hotels will stand out if they consider well-being as something beyond an amenity, but rather as an investment in science-backed strategies. 

According to Rachel, promoting well-being in physical environments permeates several competencies. WELL offers both a certification and a rating tool that translates scientific approaches into actionable and practical strategies for properties. It scores 12 competencies for addressing ESG performances and measuring environmental characteristics concerning well-being. 

Hybrid working environments will redesign hotels

From the perspective of investors, some Committee Members highlighted that despite emerging changes, hotels have been seen as resilient products, especially during any turmoil. The asset can always be a refuge in a global, national, or even individual crisis. 

However, the influence of hybrid working environments might change the hospitality landscape in the long take. As employers sending staff to work remotely contributed to an acceleration of demographic changes, the distinction between traveling for work or leisure is getting smaller. Hotels are already overperforming from this new working scenario. 

While this hybrid environment created a lot of compression around vacation real estate, it has been a catalyst for new luxury experiences, particularly from resort owners' perspectives. Given the fact that employees stay in the office for 2-3 days, trips to nearby cities tend to be more frequent. In this regard, domestic resort markets may undergo fundamental transformations in the next 5 to 10 years. A whole new leisure industry appears to be growing quite rapidly and people will likely rediscover their own backyards. 

Hospitality has proven to be one of the most innovative commercial assets in terms of adapting to consumer demands. As clients expect significant changes from the industry, hoteliers are bringing forward technological solutions and creative thinking. As a result, investors are now navigating changing waters but are showing signs of optimism. 

While the health crisis during the pandemic exacerbated demographic shifts, well-being became a luxury state. A shift of perspective in reimagining hotels’ offerings is essential. Providing well-being instead of wellness is one key mindset that hotels may have to adopt. 
 

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