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FEATURE PROFILE: Feature from the FALL 2024 ISSUE of STAY Magazine
Intelligence
Report: Study reveals luxury hotels are confident of revenue growth but expect costs to rise
Some 86 per cent of senior executives of large luxury hotel chains expect revenue to increase this year when compared to 2022.
This is according to new global research* commissioned by world-leading communication technology company Communications Specialist Ltd.
Nearly one in 12 (8 per cent) of the senior luxury hotel executives interviewed anticipate revenue growth of up to 10 per cent on last year for the organizations they work for, and half predict growth of between 10 per cent and 30 per cent. A further 12 per cent anticipate growth of between 30 per cent and 50 per cent, and some 16 per cent expect revenue to be at least 50 per cent higher.
When comparing expected revenue streams for this year to 2019, 92 per cent anticipate some form of revenue growth.
Expected revenue growth in 2023 when compared to 2022 | Percentage of senior luxury hotel executives interviewed who anticipate this level of increase in revenue this year for the hotel chain they work for when compared to 2022 |
Up to 10 per cent | 8 per cent |
Between 10 per cent and 30 per cent | 50 per cent |
Between 30 per cent and 50 per cent | 12 per cent |
Between 50 per cent and 75 per cent | 10 per cent |
Between 75 per cent and 100 per cent | 6 per cent |
It will be about the same | 8 per cent |
Less | 6 per cent |
A key reason for the level of optimism amongst senior luxury hotel executives is that 90 per cent expect occupancy rates at the hotels they work for to be higher this year than in 2022 – 18 per cent predict they will be ‘significantly higher’. For the high-end, luxury hotel market as a whole, the corresponding figures are 78 per cent and 20 per cent respectively.
When asked for other reasons for optimism around revenue growth, 70 per cent of senior hotel executives interviewed cited the growing population of mass-affluent and high net worth individuals, and 57 per cent said it was because people are generally looking to spend more on their holidays following the Covid-19 lockdowns. Some 39 per cent said it is because the luxury hotel market experience has improved and become even more sophisticated, and 33 per cent said it was due to the guest experience becoming more personalized.
However, although revenues are expected to rise, all of the respondents interviewed say overall costs for the high-end, luxury hotel market will be higher in 2023 than last year. One in four (24 per cent) expect them to be at least 30 per cent more.
Expected rise in costs this year for the high-end, luxury hotel market when compared to 2022 | Percentage of senior luxury hotel executives interviewed who anticipate this level of increase in costs |
Up to 10 per cent | 2 per cent |
Between 10 per cent and 20 per cent | 24 per cent |
Between 20 per cent and 30 per cent | 50 per cent |
Between 30 per cent and 40 per cent | 8 per cent |
Between 40 per cent and 50 per cent | 14 per cent |
Over 50 per cent | 2 per cent |
“Our research shows that the luxury hotel market is very optimistic about market growth this year. They expect occupancy rates to be higher than in 2022, and there are several factors such as a growing population of mass affluent and high net worth individuals supporting long-term growth in the sector.,” says Kevin Buchler, chief marketing officer at Communications Specialist Ltd.
Communications Specialist Ltd provides sales support on radio communication systems as well as training, fitting and commissioning of equipment, systems amalgamation, on-site instruction, maintenance and the provision of spare parts internationally to many luxury hotels around the world. Its team of radio system experts have more than 35 years’ experience and will support and help resolve complex network issues on-site or remotely.
