Exclusive: How can hotels tap into the increasing trend of premium travel?

Airlines are enjoying a massive surge in premium travel bookings, encouraging even more investment in cabin upgrades. JLL’s Ross Beardsell & Joseph Sim examines whether hotels are making the most of the trend and how they can encourage more guests to ‘turn left’ buying a premium room experience. 

While general news headlines might be highlighting the cost of living crisis, travel headlines have a very different message – that the demand for upscale travel has never been greater.

The pent-up demand following two to three years of enforced COVID induced travel malaise has seen the emergence of ‘reward travel’, with billions of frequent flyer points searching for premium airline seats and boomers (born between 1945 and 1965) not even worrying about points, instead using accumulated super funds for indulgent travel adventures.

Read the print edition of AccomNews HERE

As Helloworld chief executive Andrew Burnes told The Australian, most baby boomers don’t have to worry about cost-of-living pressures or interest rate rises when it comes to travel decisions.

“The wealth of baby boomers is estimated at $3.6 trillion dollars…and a lot of it is being spent on high-end travel and extraordinary experiences,” he said.

High-end travel agent, Virtuoso, agreed, saying: “They fly in premium economy or business class, they want a comfier seat towards the pointy end of the plane.”

Airlines are responding quickly to the trend, with Singapore Airlines spending AUD$1.3 billion upgrading its A350-900 long range aircraft that fly from Australia, and Qantas introducing its Project Sunrise aircraft for flights to London and New York, while the Middle Eastern airlines are outdoing each other in their flight to premium services.

The question is whether hotels have fully caught the upgrade wave in travel and introduced measures to maximise yield?

For those who read travel media, there is massive coverage of aircraft suites and far less about the intricacies and design features of their hotel counterparts.

Hotels should be able to tell a more compelling story about their suites given that they don’t have the constraints of operating at 36,000ft and in the confines of a small metal cylinder, but for all the impressive new hotel developments, city hotels don’t seem to be capitalising on  the same ‘turn left’ envy,

Resorts have the benefit of being a destination in their own right, but that doesn’t mean that city hotels can’t create a level of excitement that goes beyond a comfortable bed.

For instance, boomers need to sleep well, which is why they are choosing to spend $15,000 on a lay-flat business class seat, so addressing the sleep experience in a hotel would be a logical starting point. Having a ‘dream bed’ (aka a plush topper) is now a bare minimum, even for three to four-star hotels, but if city hotels want to attract stressed business executives, they might need to look beyond what every home bedroom now boasts.

Quest Apartment Hotels has tried to elevate its corporate guest sleep quality through offering a range of amenities and a partnership with sleep expert Olivia Arezollo. A calming Sleep Tight Pillow Spray is offered, along with a curated Spotify sleep playlist, and designer teas, all designed to promote calm and relaxation.

Pan Pacific Hotels & Resorts has taken the scent journey a step further, decided that irrespective of whether you are staying in an industrial area, an airport or next to a motorway, guests should arrive and be welcomed with the distinctive scent of Mango Thai Lime, a signature fragrance developed by Jo Loves for Pan Pacific.

Baths are often featured in hotel advertising because a long bath while staying in a hotel is considered an indulgence that few can enjoy at home, and Sofitel Melbourne has taken the idea to a new level. Their Art of Bathology involves a bath menu which can be accessed through a QR code, that includes a soundtrack of baroque classics to add a touch of elegance and sophistication. 

The art of upselling is well honed by airlines and delivered through effective pre-arrival communications. Irrespective of whether you’ve booked the cheapest flight or full freight you get bombarded with emails inviting you to spend more money on bidding for an upgrade, picking a seat with extra room or privileges or adding on a hotel or rental car.

Hotels can do similarly. Many London hotels have worked out that Aussies arriving after a 24 hour flight into LHR at 6am are more than happy to part with $100 extra just to get early access to their room. Some even offer “revival” massage and spa treatments at a time when guests are highly suggestive to anything promoting a return to normality.

Certainly hotel loyalty programs should be the ultimate vehicle to deliver such benefits, but another word for loyalty is “complimentary” in the guest mind, so it is important to be able to differentiate what is offered to maintain loyalty and what can be promoted to boost yield.

The reservation to check-in process is the crucial window for converting and upselling guests, and the product must be enticing. Just as with airline passengers, the offer of access to a guest lounge is sometimes a lot more enticing that the reality, but if $70 can be added to the daily bill with the promise of being treated as a VIP guest, that is a very decent ROI for a hotel, given the cost of a few glasses of house wine and some pastries.

Leisure guests increasingly want something special that captures the destination. A restaurant experience at the hotel that showcases local food and drinks, with a pre-booking attracting a discount or special extras may encourage the guest to spend money in the hotel rather than down the street. But don’t take the boomer for granted. They realise that while they may be grey haired, their credit cards are gold, and they want to be treated accordingly as they could just as easily choose a hotel in London, Paris, or New York.

Having special menus is important for both leisure and corporate guests. With a larger percentage of female business travellers, healthy menus are important.  Healthy alternate dining needs to be cleverly designed, even with celebrity nutritional endorsement.

Hotel gyms are rarely imaginative, but CBD hotels can win a higher share of corporate guests by offering something special with their equipment. A virtual trainer is an option for strength training that will also resonate with boomers.

Event led tourism is king, with Taylor Swift and Coldplay being very persuasive in attracting moneyed leisure guests to city centres.

These guests are travelling for a very immersive entertainment experience, so curating a music or video channel to the artist in town that can be shared on in-room TV screens at minimal cost a clever way of persuading guests that the premium price they paid adds to the experience of their stay. 

Australia and New Zealand – particularly Melbourne and Auckland – have had the benefit of a massive renewal and upgrading of their hotel stock over the past five years, but hotels need to go beyond the physical product. There are touchpoints throughout the hotel experience – from hotel search to check-in – where operators can engage and excite the guest enough to convince them that paying extra to upgrade the quality of a hotel stay makes just as much sense as paying to turn left to Business Class when boarding an aircraft.