The world’s most expensive hotels charged record prices last year, as wealthy travelers defied the downturn in the broader luxury sector by accessing amenities such as hyperbaric oxygen therapy and sound baths.
Revenue per available room at ultra-luxury hotels – a key measure of growth in the industry – rose 10.6 times last year, more than three times the annual growth rate for the broader hotel sector, according to data shared with the FT by analytics company CoStar.
The increase came as the average daily rate for an ultra-luxury room reached an all-time high of $1,245, up more than 8 percent in 2024. Occupancy rates rose 2.3 percent, indicating that the wealthiest travelers did not get “sticker shock” from higher prices since the pandemic — unlike customers at the lower end of the market.
The flexibility comes as hoteliers prioritize high-paying travelers whose wealth has been boosted by rising stock markets, and who are willing to pay a premium for the claimed health and lifestyle benefits of the most luxurious amenities in high-end hotels.
“Hotels could never have gotten away with these kinds of rates before the pandemic,” said Paul Charles, chief executive of travel consultancy PC Agency. “But we have recently gone through a period where inflation appears to be more acceptable, and these consumers – who are extremely flexible, at least at the moment – are willing to pay whatever it takes.”
The fortunes of ultra-luxury hotel operators are in contrast to the rest of the accommodation sector and the broader luxury goods market, where designer products such as shoes and handbags are being heavily discounted due to weak demand.
Consultancy Bain estimates that sales of luxury personal goods such as clothing and jewelery will fall by about 2 per cent to €358bn in 2025.
Revenue per available room slightly lower down the price scale – in upscale hotels and in the broader luxury category – is expected to grow between 2.1 percent and 5.8 percent in 2025. While this was slower than their ultra-luxury rivals, it compared with the decline for economy and midscale operators as budget-conscious consumers reduced spending.
This divergence was evident in the US, reflecting rising inequality as the wealth of people holding assets such as stocks has increased while the standard of living of low-income families has stagnated or fallen.
“The wealth of wealthy people is invested in the stock market at an all-time high,” said Brandt Montour, an analyst at Barclays.
Labor shortages and rising operating costs have led some hoteliers to favor the strategy of charging more per room rather than chasing more and more guests. Some of the most expensive hotels, such as Las Vegas Sands Corporation’s Marina Bay Sands in Singapore, have also cut the number of rooms to accommodate larger and more expensive suites.
By prioritizing higher rates, hotels can “take better care” of guests and attract a “more sophisticated clientele,” said Silvio Ursini, executive vice president of Bvlgari Hotels & Resorts, a joint venture between LVMH-owned jewelry brand Bvlgari and Marriott International.
Bvlgari and its peers have expanded their range of high-end amenities, particularly those that claim to improve guests’ health, to underline their growing pricing power. The group’s new hotels will offer services including hyperbaric oxygen therapy and dry-float beds to cater to wealthy travelers’ growing preoccupation with their longevity.
“Today, with medical science so advanced, the issue is really not how old you can live,” Ursini said. “This will make you so healthy and active.”
Irene Forte, founder of the eponymous skincare brand and wellness consultant for her father’s luxury hotel chain Rocco Forte Hotels, said longevity and beauty techniques were now “just expected” by the wealthiest travelers.
Rocco Forte’s newest hotel, The Carlton Milan, which opened in November, features a “relaxation room” with a vibrating sound bed, which uses built-in speakers to send low-frequency vibrations through the body.
The hotel’s spa offers treatments including pressotherapy – which uses air pressure to stimulate circulation – and laser facials. Prices for regular rooms start at around €1,400 per night, with a Presidential Suite going up to €17,500 at peak times.
Ultra-luxury hotels can justify higher prices by saying they are constantly investing in the latest technology and wellness “solutions,” said Charles of PC Agency. “It’s no longer just about being a place where you sleep and eat,” he said. “It’s about having a place where you feel refreshed.”
Tom Rowntree, vice president of global luxury brands at IHG, said wealthy consumers increasingly regard travel as an “investment in how well they live.”
Six Senses, the wellness-focused brand purchased by IHG in 2019, is to open a new hotel in the former Whiteleys department store in Bayswater in April. It will be the first in London to feature a magnesium plunge pool – a feature designed to offer silky water that relaxes the muscles.
Other features on offer include electromagnetic field therapy, which aims to speed up the body’s natural healing processes, and “red light saunas”, which target red and near-infrared wavelengths at the skin.
Hoteliers said it is important to be able to provide services, even if many guests will never use them.
“Fundamentally, luxury is about choices,” said Roland Faisel, chief operating officer of Maybourne Hotel Group, owner of Claridge’s and The Berkeley.
Richard Clarke, an analyst at Bernstein, said ultra-luxury hotels “found their confidence” to raise prices as they welcomed an emerging group of young travelers, including those made rich by surging crypto prices.
But other analysts questioned how long this trend could last, with Barclays’s Montour saying higher fees for wealthier clients risked becoming “a theoretical issue”.
“There is zero tolerance for anything other than flawless execution at those price levels,” said HSBC analyst Meredith Jensen.
