The luxury hotel residence model has seen a rise in popularity in recent years . Who wouldn ’ t want to bring the experience of living in a hotel home ? Siva Selvan weighs in on this growing trend and the innovations and challenges for the luxury hotel industry .
Has there been a shift in hospitality brands towards residential ?
Hotels have observed an acceleration in residential business unit developments even a few years before the pandemic . From a guest perspective , residential business units became more desirable with the pandemic . New guests experienced with longer stays combining work and vacations with the remote work concept drove this business model and continues to be key in development projects to fund the overall development and deliver attractive returns .
The residential component of leisure hospitality has changed since people ' s lifestyles have evolved . The lines between work and leisure have changed , and hotels and resorts need to adapt . There is a clear distinction between a hotel guest and a private residential guest , as their needs and spending patterns differ . Historically residential performance was trailing when compared to hotel occupancy except for holidays and festive periods .
Developers and operators are more innovative in design , concepts , and how they promote them . It ' s apparent now that this trend is here to stay , and they are finding ways to adapt these to their businesses .
Hotels must be able to integrate those two guests , and the hotel guest ; and the residential guest , and meet both their unique needs . Hotels were able to convince lenders and investors buy-in , despite the complexity of these assets .
How are hotel brands supporting the residential component of their hospitality projects ?
Hotels leverage existing infrastructure and culture that is accustomed to providing highly personalized service . Today , hotels have a dedicated residential team that handles owner relations and financial support to seek these assets ' highest and best use .
Branded residences emerged as a real estate market segment about 20 years ago , when hotel brands started creating mixed-use developments . Adding a residential element to hospitality projects made it easier for developers to get financing and a more immediate return on investment while simultaneously benefiting from a long-term revenue stream on the hotel side .