BlueRock's goal is to provide the most thorough and insightful analysis of luxury hotels throughout Europe. The Report audience will find valuable data for key performance indicators such as RevPAR (Revenue per Available Room), ADR (Average Daily Rate) and Occupancy, showing a notable range in performance metrics among properties. Following the report's publishing, industry experts, Emanuel Tutek, Partner in BlueRock Consulting, and Florent Girardin, Associate Professor from EHL Hospitality Business School, have provided their commentary on industry trends and insights, underlying this detailed benchmark report.

Global Trends in the Luxury Segment

«Luxury and upscale hotels have shown superior performance compared to the other segments within the world's leading hotel companies. Indeed, looking at the global trends, the luxury segment of major hotel brands has fully recovered from COVID-19's impact and is back to 2019 levels. The recovery has been driven by a significant price increase of 5%-30%, while occupancy is still behind from 16% to 19%. Major hotel companies are planning to increase their share of their luxury hotel portfolio. Analyzing the hotel portfolio of 3 major global hotel companies, we see an increasing share of luxury properties in the pipeline (15%- 24% of the total pipeline) in comparison to the current structure (9% -13% of the total portfolio)», - Emanuel Tutek, Partner in BlueRock Consulting,

Performance Insights from Mediterranean Luxury Hotel Benchmark

For most properties, the key performance indicators range, reflecting the diverse nature of luxury properties within the region. RevPAR ranges between 62k and 118k EUR, ADR from 479 EUR to 761 EUR, and yearly occupancy rates between 30% -51%.

Analyzing selected best practices within the sample, sheds light on key performance indicators and operational patterns. Notably, Food & Beverage (F&B) revenues emerge as a crucial secondary revenue source, contributing 36% to 40% of total revenues. Gross Operating Profits (GOP) remain robust, typically ranging from 46% to 49%, highlighting the profitability of luxury hotels.

Labor costs range between 35% and 38% of total revenue, underscoring the importance of efficient workforce management. Investments in marketing vary from 3.5% to 5.7%. During peak seasons, the optimal number of employees per room typically ranges between 2 and 2.4, ensuring seamless service delivery amid heightened demand.

Main industry drivers and challenges

Florent Girardin, Associate Professor from EHL Hospitality Business School outlined the current top industry drivers and challenges:

  1. The luxury hotel industry's complete rebound stems from a persistent trend: the growing preference among luxury consumers for experiential indulgence rather than material possessions.

  2. Major hotel chains are seizing the opportunity presented by this rising demand by expanding their luxury brand offerings through strategic market extension efforts.

  3. Luxury hotels employ a marketing approach focused on exclusivity and premium experiences, often marked by elevated pricing and personalized service offerings.

  4. While the demand for luxury hotel experiences is on the rise, marketing investments within the luxury hospitality sector remain comparatively lower than in other luxury industries. Increasing these investments is essential for driving occupancy rates and gaining market share.

  5. Meeting the specific skill requirements of the luxury hospitality industry, such as emotional intelligence, meticulous attention to detail, and the ability to anticipate and cater to guests' needs, poses a significant challenge for luxury hotel chains as they expand their portfolios. Acquiring, training, and retaining highly skilled staff is crucial for maintaining service excellence and competitive advantage.

In BlueRock Consulting we believe that by working together, we can collectively shape the future of the luxury hotel industry. New hotels are warmly invited to join our project and contribute to the future of luxury hospitality. The benefit of participation in this project is a tailor-made report designed to benchmark each property against an appropriately matched competitive set. Participation is free and will remain so.

Bluerock International d.o.o.