It's easy to get caught up in writing in a voice suited for aspirational luxury, but the true luxury brand has a very different message. For one thing, real luxury hotel brands avoid the word "luxury." Instead, they use language that gets to the heart of how their guests define luxury.
Brand authority Jean-Noël Kapferer has explored the concept of the "luxury brand compass" and how elite brands can grow yet retain associations with rarity. He has identified four components of luxury brands:
These elements are manipulated by the savvy hotel brand and become part of its brand story.
Once upon a time, Coach and Burberry were true luxury brands, but over-exposure in the market knocked them down a few pegs. They became too accessible. Quickly, they were demoted to being aspirational brands – meaning they appealed to status-seekers – people who aspired to belong to a certain class.
Coach undertook extensive efforts to revitalize its brand, including pulling out of department stores and purchasing Kate Spade, a favorite high-end brand among millennials. Burberry was so desperate to regain its luxury profile, in 2018 it burned $33 million of its own merchandise rather than sell it at a discount. The move resulted in a backlash, of course. Both brands have now regained luxury status, although neither has ultra high status of Hermes, Chanel, or Bulgari.
Brands that become too accessible are less appealing to superrich buyers. Louis Vuitton, for instance, is considered a 'brand for secretaries' by many wealthy Chinese.Independent
Part of the appeal of a £40,000 watch is that it doesn’t tell the time any better than one you could have bought for £40. The owner doesn’t need to spend the extra £39,960, but is so successful that he is able to anyway.ReadCars
Lanvin sells a striped tee-shirt for $1,520 that is almost identical to a $50 Madewell tee. Jimmy Choo suede sneakers sell for more than $1,000, when you can buy a similar pair of Pumas for $65. The price tag is part of what separates a luxury brand from a lesser brand.
The price tag––and the fact that the majority of the world can’t afford said item, has the inverse effect of imbuing the purchaser with power. That’s why even though there are note-perfect copies of high end bags available all up and down Manhattan’s Canal St., women still choose to purchase authentic Prada, Gucci and Burberry bags instead.The Frisky
The costliest hotel in the world is the Lover's Deep Luxury Submarine in St. Lucia, which runs $150,000 a night. This hotel is located underwater, which makes it not just a hotel, but an experience worth bragging about.
Luxury Travel Intelligence, a by-invitation review portal for affluent travelers, ranked the top luxury hotel brands. Aman, Oetker Collection, Belmond, Six Senses, Mandarin Oriental, Auberge Resorts, Four Seasons, Soho House, One and Only Resorts, and St. Regis ranked in the top 10.
Here are those 10 brands with sample hotels and rates for a 2-person stay in November 2019.
|Brand||Resort||Location||Nov. 20-25 2019|
|Oetker Collection||Eden Rock||St. Barths||$2280|
|Six Senses||Tortuga Bay/Punta Cana||Punta Cana, DO||$446|
|Mandarin Oriental||Canouan||Canouan, Grenadines||$1040|
|Four Seasons||Ocean Club||Bahamas||$950|
|Soho House||Soho Beach Club||Miami Beach||$335|
|One & Only||Palmilla||Los Cabos, Mexico||$990|
|St. Regis||Punta MIta||Punta Mita, Mexico||$563|
Why does Chanel spend $100 million on advertising if its clothes and handbags are beyond the reach of ordinary consumers?
Chanel uses brand awareness in two ways:
Social envy is a powerful motivator which gives status to brands and the people who can afford them.
Back in 1993, John C. Groth and Stephen W. McDanial explored the relationship between "prestige pricing" and brand exclusivity. Prestige pricing implies greater desirability and quality.
But high prices do more than convey a brand image. High prices wall the wrong people out (make a brand inaccessible) while including the right people (make a brand exclusive). In fact, there is an entire psychology of pricing and price anchoring.
Exclusivity is tied to the idea of belonging – like passing the initiation into a private club.
Mass brands define who their customers are and push products towards them. For luxury brands, the roles are reversed. Consumers must be pulled towards the brand with the promise of belonging to an exclusive community.Sell Up
All luxury brands depend on exclusivity. Dolce and Gabbana, Farfetch, Hermès and Chanel have very different fashion styles, but all of them are calling cards to the highest echelons of society.
Brands are visas, which demonstrate their social ascent and membership in a worldwide community of affluent consumers.Jean-Noël Kapferer
Aspirational brands sell status. But a status-based message is likely to turn off the person who already has money, power, and social prestige. So, while status and exclusivity are part of luxury branding, a luxury hotel
Vincent Bastien, author of The Luxury Strategy, states that luxury marketing establishes exclusivity by operating according to 24 counterintuitive rules. Among these, he includes "making it difficult for clients to buy.
Hermès makes it impossible for unknowns to buy its iconic Birkin and Kelly bags. But it has aggressively opened new stores in China, cashing in on the fastest growing market of superrich customers. Hermès is in business to sell – but only to the right type of person.
Laucala Island Resort Hilltop Estate (Fiji) is located on its own private island, which keys into the privacy concerns of UHNW guests. You cannot book a stay here for love nor money without the approval of its owner, Red Bull co-founder Dietrick Mateschitz.
The world's first pop-up hotel, 700,000 Heures makes it impossible for outsiders to book room nights. You must be a member of the Le Cercle des Amazirs in order to be kept in the loop about where the hotel will pop up next. This requires a minimum entrance fee of £2000 and an annual fee of £500 and is limited to 170 spots at the highest level.
Hoteliers who market high-end villas must walk a tight rope between promoting room nights and ensuring that the aura of exclusivity is maintained.
Luxury buyers choose brands as a personal statement; they want to express their own uniqueness and values. This is especially true of millennials, who see do not define luxury as owning status objects. Instead, according to a Deloitte study, they value brands that:
A hotel stay is an expression of the type of experience that guests value. When guests share images on social media, they are promoting your brand as part of themselves.
A study published in 2018 found brands that "whisper instead of shout" are preferred overall. Subtle visual cues reinforce the idea of being in the right club. All luxury-level hotels are beautiful... but some are also uniquely imaginative. One-of-a-kind dining and bar experiences align nicely with the need for hotels to be shareable. Exclusive experiences – sumo wrestling at The Palace Hotel Tokyo and personal fireworks at Las Ventanas al Paraiso (Los Cabos, Mexico) – fit the bill for how modern travelers define luxury.
Brand author Jean-Noël Kapferer has described the artification of brands from non-art into art. The term "artification" was coined in Finnish aesthetic theory by Ossi Naukkarinen. Artification aligns luxury brands with art, thereby enhancing their perceived rarity and value.
Luxury brands align with art in two ways:
According to a 2018 study by Julia-Sophie Jelinek, when artification is properly used, it leads to higher brand equity (perceived brand value).
The premium (not luxury) Swedish vodka brand Absolut has sponsored 800 collaborations with artists. Crystal Head vodka (a collaboration between the makers, actor Dan Aykroyd, and artist John Alexander) is less well-known and modestly priced at $99 for 1.75 ML. In contrast, Ciroc Ten vodka costs $250. In the world of clear spirits, there is no correlation between price and quality; it all comes down to brand image.
Luxury brands strive to stand out and be singular. Creativity is one way to shock, amuse, and be different. Fashion brand Viktor & Rolf built an upside-down store in Milan. Chanel's jewelry boutique in Place Vendȏme has been designed like a time capsule to resemble the founder's Art Deco apartment. Portugal's Soundwich relies on a gimmick; gourmet sandwiches are packed in lunch tins that play music when opened. As the saying goes, "God is in the details."
Creativity also helps luxury brands remain relevant to the times. Gucci fell out of favor but has been reinvented by Alessandro Michele. Prada appeals to a younger luxury buyer with its whimsical Miu Miu line. As new definitions of luxury emerge, creativity enables brands to respond in meaningful ways.
Luxury hotels cannot afford to be any less creative than luxury goods, especially since a younger generation of luxury travelers demands surprising and delightful experiences. If these experiences tie into local culture, so much the better.
Heritage has traditionally been one of the strongest signals of luxury. Millennials care less about security than previous generations, but continue to prefer established brands "with roots."
By 2025, millennials worldwide will represent 45% of luxury spending. This includes China, which tends to have a more conservative, ownership-oriented mindset. The huge purchasing power of China has pushed Gucci and Louis Vuitton to the top of favorite millennial brands.
In the U.S., female millennials also choose historical brands – namely, jewelry by Tiffany, Cartier, and Gucci. According to a 2018 BBC study, affluent millennials are more likely to be brand-conscious and to purchase luxury brands than any other generation.
Affluent millennials are more concerned than their peers with how luxury brands reflect their success and define them in social media.
Anyone who believes millennials are nonmaterialistic needs to watch the Netflix video The American Meme, which explores how millennials create and consume social media.
Status goes beyond success. It includes social values such as sustainability and animal welfare. Luxury hotel brands that endorse these values allow millennials to project the right image of themselves.
Ultra High Net Worth (UHNW) individuals have $30m+ in net worth. Of these, 1% are billionaires (2,604 individuals worldwide). (Source: Wealth-X
British adman Rory Sutherland cautions that truly high status individuals often rebel against status signaling by dressing down, driving an old car, and living in a modest home.
Warren Buffett, the third richest man in the world, still lives in the house he bought for $31,000 and uses a flip-top phone.
Microsoft founder Bill Gates dresses the part of a nerd, eats cheeseburgers, enjoys touring missile silos and electric plants with his son, plays bridge every weekend, and does the dishes every night because "I like the way I do it." (Source: Forbes)
Jeff Bezos, the richest man in the world (until his divorce), is a fan of food trucks and, like Bill Gates, always washes the supper dishes. (Source: Business Insider)
Billionaires are largely self-made businesspeople. Contrary to pop culture, they do not change their habits simply because they acquire great wealth. They continue to enjoy the same interests and hobbies, and have no need to prove anything to anyone. The one big change is that privacy and security become paramount concerns. They do not want to appear in the social media of other hotel guests. Nor do they want to be accessible to the paparazzi.
Millennials are prone to embrace customization and companies that align with their beliefs.
Historically, luxury brands were promoting a so-called culture of “exclusion.” Not only they were limiting access to the product, they were also deliberately detached from the final customer and reserved in their communications. What we are observing today is a new paradigm...brands have to act in an inclusive, engaging and open manner. This requires a great deal of flexibility in communications, tone of voice, social media behavior...brands should try and become “friends” with those new generations of consumers, participate in their lives through relevant channels and speak their language.Olga Pancenko, Perrin Paris
The key concepts are social envy and FOMO (fear of missing out). Millennials want to be envied by their peers and they are desperately afraid of being left out of anything – travel, parties, concerts, lifestyle moments – that would enhance their self-worth.
Sharing these experiences signals status in much the same way that ownership does.
All of the above come together in the brand's story. What a brand chooses to say – and not say – about itself determines whether the brand will resonate in the market.
Luxury hotel brands can work with five elements to craft their brand stories. The right elements depend upon the brand and its audience. Usually, luxury hotels blend more than two elements.
For example, a strong heritage brand can no longer get by based solely on tradition; it must add creativity or social values to the mix.
Quality is an expected part of every luxury hotel brand story. It has two dimensions: creature comforts and service.
talk about being handcrafted, meticulously designed, and impeccably finished. People with money understand – everyone understands – that exceptional quality is expensive and therefore reserved for a certain class.
Dior talks about craftsmanship. BMW talks about German-engineered performance.
When a brand is expressing its quality, you may hear it talk about performance, craftsmanship, and similar attributes.
Heritage is a dimension of quality. Heritage brands are luxury brands that have become traditions among the elite. Surprisingly, heritage resonates across age groups.
Although most U.S. millennials do not crave luxury products, millennials with incomes above $150,000 are the exception to the rule. These affluent millennials are keenly interested in Rolex, Jimmy Choo, and Tiffany (the leaders in their categories).
When a brand is expressing its heritage, you may hear it talk about tradition, its past, its cultural roots, or where it is made.
Great design (creativity) is a foundation for luxury brands. Kartell relies upon the work of distinctive designers, such as Philippe Starck (Ghost Chair) and Ron Arad (Popworm). Pandora (a more accessible brand) is noted for its collectible, self-expressive jewelry charms. Christian Louboutin's $1000-a-pair stilettos have a distinctive red underside that is the brand's visual bookmark.
When a brand is telling a design story, you may hear it talk about creativity, aesthetics, innovation, and vision.
Wealthy consumers do not mind spending more for quality products that have a reputation for doing good. The consumer shares in the goodness of the product.
Tesla tells a story of environmental consciousness that is worth the price tag. It is blunt, calling the Model S "the best car on the road." And the entry level Model 3 simply touts a high safety rating. Tesla's story doesn't happen on its website so much as in the news and social media. Which is fine, because Tesla is unique in the market.
Wealthy millennials like to be seen as being concerned with ethics. For example, Prince Harry bought Meghan Markle an ethically sourced engagement diamond from Botswana.
When a brand is expressing its ethics, you may hear it talk about transparency, fair-trade, the environment, social responsibility, and charitable donations.
In the past, buying Chanel No. 5 was enough for a woman to feel that she belonged to a specific echelon of society. There was relatively little clutter; the brand stood for something without much effort. Now, the brand has to expand upon its story; the Chanel website is filled with movie-stories.
The individual stories may be fictionalized, but they add up to a greater truth. Call it a point of view or a stance. Luxury consumers buy brands they believe in. And they buy brands that express something they want to say about themselves.
Shinola and Rolex are both luxury brand watches, but they appeal to different mindsets, so they have very different stories. Both brands are true to their audience and to themselves.