Luxury Hotels. The K economy.
The world's most expensive hotels put prices up, cut rooms and had a record year. If you care about price, you are not the customer.
THE GIST ON LUXURY HOTELS: "The K Economy"
Why are luxury hotels doing so well?
Post-pandemic, asset values have exploded, the stock market is at all-time highs, and the wealthy have become significantly wealthier, very fast. An 8% increase on a suite at the Ritz isn't keeping them up at night.
The customer who treats themselves to Claridge's once a year on their birthday isn't the customer any more. So the hotels follow the money: fewer rooms, bigger suites, higher prices, which would have broken their model five years ago. It increased their business because the customer went from wanting value to wanting the best.
What is the K economy?
The top and the bottom of the market thrive, and the middle vanishes. Jaguar has rebranded as an ultra luxury brand as affordable sports cars are discontinued. Burberry has cut to mid-tier. Mid-range restaurants are dying while Michelin-starred ones are fully booked.
Who creates what comes next?
The aspirational middle class were always the engine of culture, creativity and innovation. Artists, musicians, entrepreneurs, so many came from somewhere in the middle. When the middle disappears, who creates what comes next?
Does it worry you that the middle is disappearing?
Your take. One tap, then see how everyone else voted.
Quick answers
What is the K economy?
The top and bottom of the market thrive while the middle vanishes.
How have luxury hotels changed?
Fewer rooms, bigger suites and higher prices, serving customers who want the best rather than value.
Why does the missing middle matter?
The aspirational middle class were the engine of culture, creativity and innovation.
See you on the next one.
What should the next one be? Suggest a topic for Huw to explain
The conversation
Comments
Nothing here yet. Start the conversation: Huw reads every comment before it is published.
