In an era defined by rapid technological shifts and evolving consumer expectations, the hospitality industry is at a pivotal crossroads. For investors seeking robust and sustained returns, simply acquiring assets is no longer enough. The future of a hotel’s profitability and its long-term viability hinges on a strategic pivot toward innovation. It requires a deep understanding of what today’s traveler truly values. Smart investment in the hospitality sector means building not just a property, but a dynamic, resilient business that can adapt to the most critical trends shaping the industry today. Following are three key strategic moves to consider:
1. Look beyond transactional models
A prime example is the shift from a transactional model to an experiential and retail-driven approach. Modern travelers crave more than a bed and breakfast. They seek immersive, hyper-personalized experiences. Savvy investors are recognizing this by allocating capital to properties that can offer an array of unique services and amenities. This could be anything from on-site wellness centers featuring differentiating offerings such as cryotherapy and meditation pods to partnerships with local artisans and chefs for exclusive, authentic cultural experiences. Many of the new developments in Saudi Arabia are taking this approach.
By merchandising these offerings beyond the traditional room rate – think selling an overall bespoke stay that might include a spa package, a cooking class or a curated local tour – hotels can unlock new, highmargin revenue streams beyond their four walls. This retail-style thinking transforms the property into a lifestyle destination. Consequently, it significantly boosts the average revenue per guest and fortifies ROI at all levels of service, not only the luxury properties.
2. Treat technology as an expectation
Technology is another non-negotiable area for investment. The focus here isn’t on flashy gadgets, but on frictionless, data-driven operations. Contactless technology, from mobile check-in to digital keys and voice activated room controls, is no longer a luxury but an expectation. These innovations streamline the guest journey, reducing operational costs and freeing up staff to focus on high-touch, personalized service.
Furthermore, investing in robust data analytics and AI is a game-changer. By analyzing guest behavior, properties can anticipate needs, personalize communications and implement dynamic pricing strategies that optimize occupancy and revenue in real time. This isn’t just about convenience. It’s about using technology to create a more efficient, profitable and memorable experience for every guest, making the investment more attractive and its returns more predictable.
3. Commit to sustainability and wellness
Finally, the most powerful and enduring trend for any hotel investment is a genuine commitment to sustainability and wellness. Today’s travelers, particularly millennials and Gen Z, are increasingly making booking decisions based on a property’s environmental and social impact. Hotels that invest in eco-friendly infrastructure, such as energy-efficient systems, smart water management and waste reduction programs, are not only appealing to this growing, conscious consumer base but are also significantly lowering long-term operational costs.
Similarly, dedicating resources to wellness tourism, from on-site fitness facilities to digital detox retreats, taps into a multibillion dollar market. These investments signal a brand that is both ethical and forward-thinking. Therefore, they foster loyalty and create a powerful, positive brand identity. The ROI here is twofold: tangible cost savings from efficiency and intangible, but deeply valuable returns in brand equity and customer loyalty.
An eye on the future
In summary, a successful hotel investment in this new era means looking beyond brick and mortar. It’s about building a business that is technologically advanced, experience-centric and purpose-driven. By embracing these critical trends, investors can position their assets for superior performance, stronger profitability and a truly resilient future.
3 smart hospitality investment strategies
Hotel investment in 2025 means looking beyond brick and mortar to embrace trends that align with the expectations and values of today’s visitors. Bastien Blanc, co-founder and board member at TroKadero Hospitality Global, has the lowdown on the trends that are reshaping the industry’s funding climate.
In an era defined by rapid technological shifts and evolving consumer expectations, the hospitality industry is at a pivotal crossroads. For investors seeking robust and sustained returns, simply acquiring assets is no longer enough. The future of a hotel’s profitability and its long-term viability hinges on a strategic pivot toward innovation. It requires a deep understanding of what today’s traveler truly values. Smart investment in the hospitality sector means building not just a property, but a dynamic, resilient business that can adapt to the most critical trends shaping the industry today. Following are three key strategic moves to consider:
1. Look beyond transactional models
A prime example is the shift from a transactional model to an experiential and retail-driven approach. Modern travelers crave more than a bed and breakfast. They seek immersive, hyper-personalized experiences. Savvy investors are recognizing this by allocating capital to properties that can offer an array of unique services and amenities. This could be anything from on-site wellness centers featuring differentiating offerings such as cryotherapy and meditation pods to partnerships with local artisans and chefs for exclusive, authentic cultural experiences. Many of the new developments in Saudi Arabia are taking this approach.
By merchandising these offerings beyond the traditional room rate – think selling an overall bespoke stay that might include a spa package, a cooking class or a curated local tour – hotels can unlock new, highmargin revenue streams beyond their four walls. This retail-style thinking transforms the property into a lifestyle destination. Consequently, it significantly boosts the average revenue per guest and fortifies ROI at all levels of service, not only the luxury properties.
2. Treat technology as an expectation
Technology is another non-negotiable area for investment. The focus here isn’t on flashy gadgets, but on frictionless, data-driven operations. Contactless technology, from mobile check-in to digital keys and voice activated room controls, is no longer a luxury but an expectation. These innovations streamline the guest journey, reducing operational costs and freeing up staff to focus on high-touch, personalized service.
Furthermore, investing in robust data analytics and AI is a game-changer. By analyzing guest behavior, properties can anticipate needs, personalize communications and implement dynamic pricing strategies that optimize occupancy and revenue in real time. This isn’t just about convenience. It’s about using technology to create a more efficient, profitable and memorable experience for every guest, making the investment more attractive and its returns more predictable.
3. Commit to sustainability and wellness
Finally, the most powerful and enduring trend for any hotel investment is a genuine commitment to sustainability and wellness. Today’s travelers, particularly millennials and Gen Z, are increasingly making booking decisions based on a property’s environmental and social impact. Hotels that invest in eco-friendly infrastructure, such as energy-efficient systems, smart water management and waste reduction programs, are not only appealing to this growing, conscious consumer base but are also significantly lowering long-term operational costs.
Similarly, dedicating resources to wellness tourism, from on-site fitness facilities to digital detox retreats, taps into a multibillion dollar market. These investments signal a brand that is both ethical and forward-thinking. Therefore, they foster loyalty and create a powerful, positive brand identity. The ROI here is twofold: tangible cost savings from efficiency and intangible, but deeply valuable returns in brand equity and customer loyalty.
An eye on the future
In summary, a successful hotel investment in this new era means looking beyond brick and mortar. It’s about building a business that is technologically advanced, experience-centric and purpose-driven. By embracing these critical trends, investors can position their assets for superior performance, stronger profitability and a truly resilient future.
Bastien Blanc,
hotelier and co-founder of TroKadero Management
tkh.global
@blancbpe
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