The future of lifestyle and luxury hotels in 2025

BHN editor Eloise Hanson shares her predictions on what will shape the hotel industry in 2025 and beyond.

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The geopolitical landscape of the last couple of years has had a tremendous influence on hotel operations and performance. Inflation has prompted hoteliers to increase ADRs and explore other cost-efficiencies to mitigate the impact, which in turn has shifted traditional KPIs. Also driven in part by changing guest preferences, hoteliers are refocussing commercial strategies towards revenue beyond the room, led by emerging metrics such as RevPAG (revenue per available guest).

Up until now, the technology available to hotels has mainly supported operations pre and post-stay; little progress had been made to maximise during-stay revenue opportunities. The phenomenal advance of AI has supercharged such efforts that property management systems have this year been able to experiment with providing real-time insights.  

Cloud-based hospitality solutions platform Agilysys has run several pilot programs to help its customers identify untapped revenue potential. One such test included comparative analysis of historical guest profiles and their datasets to understand the most relevant upsell items, presented to operators in a percentage ranking system so that the most likely spending opportunities are delivered to in-house guests in real time. Matthew Prosser, senior sales director EMEA for Agilysys, says that an additional 10 per cent of revenue can potentially be achieved should AI power on-property decision making.  

While AI-powered solutions remain in early stages of development for now, it’s fascinating to hear how technology providers such as Agilysys are innovating. When these solutions come to market, which I suspect we’ll see over the next year or so, it will revolutionise operations, service standards, and guest engagement. 

Innovation with ancillary revenues

When ADRs reach peak performance, it limits the ability to flex rates further. KPIs are already shifting beyond the room and redefining what commercial success looks like, resulting in the creation of new revenue sources. The desire for experiences may be transforming hotel offers and activities, though the key to maintaining a competitive edge is understanding value. 

“Ultimately, there are so many choices on offer in terms of where to stay, dine or drink; it’s a necessity to stand out,” says Andrew Antoniades, VP brand marketing at Ennismore. “Only certain hotels will meet the needs of modern travellers, and one of the benefits of meeting those needs is introducing the opportunity for ancillary revenue.”

Antoniades explains that Ennismore’s guests have prompted the group to create new business models such as its coworking brand Working From_ (now present in four international cities), as well as its travel membership Dis-loyalty. On the latter, members are booking further in advance, staying for longer and spending more, demonstrating the commercial power of meeting and delivering on guests’ needs. 

“Today’s travellers are looking for more than just a beautiful property; they’re seeking authentic stays that make them feel special,” says Ruth Whitehead, COO of eviivo. “This trend shows no sign of curtailing and, in 2025, hoteliers will double down on their efforts to understand individual guest preferences, tailoring curated experiences to build loyalty and drive repeat bookings. Guesswork has no place at the table here – this can only be unlocked by data. In the year ahead, we’ll see even more hotels relying on technology like AI-powered guest messaging tools to gain much more granular insights, engaging guests from pre-arrival to post-departure.”

As guest expectations and demands evolve, technology will become more sophisticated in order to anticipate travellers’ needs and craft bespoke experiences, tailored to each individual. Zen Valli, chief revenue officer at RMS Cloud, says: “As travellers continue to prioritise authentic, experience-driven stays, hoteliers will need to rethink their strategies to attract the next wave of guests. Hotels that embrace technology to deliver frictionless experiences, personalised services, adaptable coworking spaces, and thoughtfully curated events will be in the best position to grow their market share. By adjusting strategies to meet the needs of modern travellers, hoteliers can help to create meaningful and memorable stays that set them apart in an increasingly competitive market.”

Attribute-based marketing (ABM)

While the underlying principles of attribute-based marketing – to customise offerings based on individual preferences – have been around for some time, the concept is relatively new to hospitality. Recent technological advancements, particularly the AI boom, coupled with the increasing demand for personalised experiences has accelerated the development of ABM in the industry. 

“We’re in the early stages of integrating ABM into the overall strategy of the collection. To start with, we looked at our hotels individually and the guest profile and attributes of each. We then looked at creating bespoke experience packages that align with certain guest personas,” explains Sally Barker, group sales and marketing manager at The Calcot Collection. From launching data-driven campaigns to target each of these personas specifically, Barker adds that the group has seen an uplift in engagement and conversion, with a return on ad spend 30:1.

ABM can promote differentiation due to delivering higher levels of guest satisfaction and increased revenues. The challenges of wide-spread adoption, however, is the ability for different bolt-on systems and platforms to synchronise and support data flow. A robust tech stack is necessary to capture and analyse the relevant data points, supported by relevant integrations across the product suite. This may require significant investment in the infrastructure and data analytics tools.

As technologies continue to evolve and consumer expectations for personalised experiences grow, it is likely that ABM will become increasingly prevalent in the hospitality industry. AI-powered tools will guide the process, and the early movers including both developers and users of ABM, will be well-positioned to gain a competitive advantage in the near future.

Luxury family travel

Multigenerational travel has accelerated since 2023 and presents a unique set of challenges and opportunities for hoteliers, who must innovate to cater to this broad spectrum of travellers. While the spending habits and travel preferences across the generations – from Boomers to Gen Z – have generally been mapped, little research has been conducted into the future traveller: Gen Alpha. McKinsey & Company found that working to attract younger customers is key for travel industry players, as they can offer “lifetime value”.

According to STR, family travel is one of the fastest-growing segments o the industry compared to all other forms of leisure travel. Accommodation searches for families have increased by eight per cent in 2024, while 85 per cent of parents are very likely to travel with their children and are planning to increase (or maintain, at minimum) their level of travel spending. Considering that 77 per cent of parents are influenced by their children when it comes to travel decisions, and that 50 per cent of children’s wishes are typically included in holiday planning, it’s crucial that the needs and interests of younger travellers are met.

“How do we learn from the kids’ industries – from gamification, from collectables, from movie franchises – and bring this into the hospitality industry,” says Alicia Zur-Szpiro, co-founder of Wanderland. She explains that the idea of staggering a journey has multiple benefits for the hotel sector: it can entertain and enhance a child’s experience; delivers recognisable and loved characters, brands, and modes of play; and unlocks additional revenues.

Resorts have catered well to younger travellers, however city centre hotels and those located in urban destinations tend to rely on traditional gift-giving such as colouring books or a tent in the room. “There is a real lack of attention given to teens,” adds Zur-Szpiro. “These are extremely powerful players, highly socially-connected, and they are about to become travellers and decision-makers in their own right. There’s a real opportunity for hotels and hotel groups to corner this market and start to build lifetime loyalty across generations and properties that is really meaningful.”

Cybersecurity

As the hotel industry becomes more digitised, the importance of cybersecurity cannot be overstated. With the advance of AI alongside the introduction of contactless technologies and IoT devices, cybersecurity is ranking as a key concern and area of focus moving forwards. If ignored, a potential data breach can have severe consequences for a hotel’s reputation, financial stability, and customer trust.

“The threat landscape has evolved significantly,” says James Irving, head of sales at ThreatSpike. “Whereas in the past we’d see phishing emails which were quite basic in nature and with user training, fairly easy to spot, we’re now seeing AI-powered dynamic phishing, deepfakes, and middle methods.”

Irving advises running simulations of cyber attacks, known as “ethical hacking” or “penetration testing”, to ensure weak links are covered up and that infrastructure is secure. Setting up an email gateway for instance, where all incoming messages are analysed and quarantined if needed, can serve as a protective mechanism against phishing. Combined with staff training, the volume of attacks and any potential impact should be greatly reduced.  

The threat actors will constantly evolve and it’s therefore imperative to cover all bases when it comes to cybersecurity protection. Recent trends may point to an increase in phishing scams and breaches, but layering various other security controls across key data assets will better fortify systems, increase the difficulty of penetration, and ultimately deter potential attackers. 

Watch the BHN 2025 Trends webinar replay here.