Month: March 2017

Interesting new research presented in a report entitled “The Affluent Homebuyer: A Quest for Meaning” from Luxury Portfolio International (LPI) and YouGov can help guide international real estate marketing efforts. HNWI buyers are put into three (rather curiously named) categories:

• Practical Explorers (buyers of $1-$2million homes) seek trusted experiences and 80% prefer to work with a real estate agent on their transactions.

• Meaning Seekers (buyers of $2-$5million properties) are luxury lovers who proudly assert that once you experience true luxury, it’s hard to scale back (71%). They also value sustainability (74%) and want their purchases to mean something.

• Power Players (buyers of homes at $5million+) acquire the finest, most premier properties and are willing to pay to get them, with 83% saying they choose the best and expect the price to reflect this. They are motivated by a desire to ‘have it all’ and want to feel confident that what they have purchased is unrivalled excellence.

For the $million-plus homebuyer, the most important trait they look for in their estate agent is trustworthiness. The second and third are ‘knowing the details that distinguish the best’ and ‘taking the time to understand my needs’.

HNWIs have high – and ever-increasing – expectations of what ‘luxury’ offers them and they know that with each passing year they can expect more; as such, developers, designers, and hotel operators must continually raise the bar by delivering cutting-edge design and innovation along with 5* hotel and concierge services. Once properties have been built to these specifications, international real estate marketing professionals must look for opportunities to promote the luxurious experience. On this issue, LPI’s Stephanie Pfeffer Anton makes a poignant observation when she comments that the standard of luxury property today is very different from that of even a few years ago: “What passed as a luxury experience even five years ago, today feels tired and uninspired. The principle of luxury that matters today is emotional connection, which starts with human interaction and transparency in the process.”

In addition to an emotional connection, buyer motivations are becoming increasingly experiential (defined as ‘something that creates a closer bond between the consumer and the brand by immersing them in a fun and memorable experience’).  An article published by Luxury Society on HNWI trends states, ‘They want cool, they want fun and they want experiences,’ whilst a study found that 70% of Millennials in the US now “…look for experiences that stimulate their senses”.  As reported in our study on Branded Residences, Lynn Villadolid (former Six Senses Director & Brand Ambassador) succinctly observes; “There is now a myriad of top hotel brands offering supreme quality FF&E, so the choice is much more about how the brand’s values appeal to the buyer’s emotions, intellect and soul”.

Which all presents interesting challenges (or opportunities, depending on your viewpoint) for real estate developers and international real estate marketing professionals to stay ahead of the curve, remembering always that the customer remains king. Or queen.

Claire Pilton’s article in Condé Nast’s property sections this month features international real estate marketing expert Chris Graham’s recent industry report Branded Residences: An Overview.

The article details the way that partnering with an established brand can increase the desirability of a luxury development. Using several examples of globally renowned resorts, Pilton examines the link between branded residences and a profitable investment. Robert Green, of Sphere Estates, points out that these resorts are more likely to retain their high value and make for more appealing purchases for future buyers, should you wish to sell it on.

“On top of the “trophy status”, prime locations, cutting-edge interior design, technology and architecture, hassle-free ownership and premium lifestyle, many offer residents’ discount cards, access to the operator’s properties in other locations, higher rental income, stronger resale values — and like-minded neighbours. Small wonder discerning HNWIs make the best brand ambassadors.”

 

One of the most informed people I know on real estate and hospitality is Muriel Muirden, EVP and MD of Strategy at WATG (NB she wrote the Foreword for my Branded Residences paper), so it was with great interest that I read this new report published by Muriel and her team.

The report identifies some fascinating areas that the hospitality industry will increasingly need to consider, if it wants to cater for evolving customer requirements and tastes. These provide guidance for many excellent international real estate marketing opportunities. A summary of these trends discussed in the document is given below:

1. Digital Detox: Jaded by the endless distraction of social media and the addictive nature of the smart phone, we are seeing a strong movement towards digital detox. For the lodging sector we see strong opportunities to develop wilderness resorts that must offer a plethora of outdoor pursuits meshed seamlessly with a strong holistic ‘wellness’ theme…..and total immersion and digital disconnection is a priority.

2. Edible Environments: Farm-to-table and ocean-to-plate experiences are now well established on the travellers’ wish list – local produce and indigenous eating experiences are expected and no longer hold a novelty factor. But now we see the rooftop-to-salad bowl and golf rough-to-entrée – in essence the emergence of the ‘edible resort’. ‘There is without doubt an increased awareness of the provenance of what we eat. Our focus increasingly is on creating hotel landscapes that are edible ornamental gardens. We are placing hotels within vineyards, under olive groves and above edible parterres to create enduring, relevant and delicious experiences for hotel guests. Why have a fruit bowl when you can wander onto your balcony and pluck an orange from the tree?’ observes John Goldwyn, VP of Planning and Landscape at WATG. The report also highlights a desire for the simple life, driving a trend for communities and resorts anchored in eco-agriculture.

3. Fitness & Wellbeing: Across the generations we have become preoccupied with our personal wellbeing – boomers strive to hold back the ravages of time, millennials aim to optimise their personal fitness. Our lives are jam packed with wearables, apps, healthy eating blogs, fitness mash-ups and endless pop-ups to lure us into the belief that if we become disciples we can live forever. Yet the hotel sector, with a few notable exceptions, lags behind such innovations. Hotel fitness facilities remain largely traditional in nature. This has to change.

4. Eco-consciousness: Much has been written about the social and eco-consciousness of the over-analysed millennial, but I believe all generations have a greater awareness, and, many have a desire to be helped to do the ‘right thing’. The hospitality sector is uniquely placed to integrate those whose lives have taken a challenging turn back into society: expect more new hotel concepts aimed at making us feel good about ourselves, while contributing to a wider community or environmental platform.

5. Sleep: A good night’s sleep is the new holy grail and we will pay to seek it out. It is estimated that the industry for sleep apps and wearables will be worth $680 million in just a couple of years. Sleep labs, sleep workshops and sleep schools that create bespoke solutions to analyse and perfect the quality of sleep are springing up before your very eyes. So where is the hotel sector on this debate? Surely the primary purpose of a hotel is to provide a good night’s sleep. We predict a strong movement into hotels exploring this lucrative sector and moving it back to the top of their marketing agendas.

6. Simplification: Contemporary life is characterised by a tsunami of choices and decisions – from choosing fabric conditioner to selecting our latest smart (or dumb) phone. Sleep aside, the buzz is all about simplification: downsizing our decision-making for a less fatiguing life. So what does this mean for the hospitality sector? Goodbye to pretentious dining with lengthy menus and wine lists (give us menu free dining, single ingredient menus and simpler choices). Declutter our bedrooms and bathrooms and give us a fabulous bed, a ‘wow’ shower and generally minimise the choices we have to make.

7. Pets: Airports are creating dog parks and lounges, airlines are creating luxury pet plane cabins and pet friendly travel agents are emerging who ferret out the right accommodation. However, resorts will need to embrace the concept more.

8. Cannabis: ‘Bud and Breakfast’ tourism is most certainly on its way in the US. The $35 million Colorado Cannabis Ranch – Colorado’s first ‘weedery’ – is entering the popular winery and brewery tourism market. Research from Ackrill Capital projects that marijuana as a medical and recreational industry will top $40 billion in the next few years, with the potential to grow to $100 billion once it is legalised throughout the US.

9. Solitude: Much is written about loneliness, most of it focused on the elderly. Recognition of the issue has led to the creation of state and charity driven infrastructure to try to alleviate the solitude of old age. Taking a break from ‘adulting’ is manifesting itself in the evolution of summer camps for grown-ups. We see potential in this genre in a variety of locations and focused on different themes.

If you would like to receive a full copy of WATG’s report, please contact Muriel directly at mmuirden@watg.com.