How to drive luxury rates in non-luxury destinations

GLOBAL REPORT – Luxury hotels located in non-luxury destinations are faced with a unique challenge – delivering premium experiences while resisting the surrounding market’s low average rate. The ultimate goal is to preserve luxury positioning with a rate that does not sacrifice occupancy.

To successfully maintain the high rate and healthy occupancy necessary for an optimized RevPAR in budget-conscious destinations, luxury hotels must position the hotel not just as a place to stay but as a destination worthy of an elevated price tag, with corresponding strategic initiatives to drive desirability.

Below are key strategies a luxury hotel can implement to ensure strong rate positioning and long-term rate resilience, even in a sea of lower-priced competition.

High-profile PR events. Most markets have higher profile events. Become the hotel for celebrity gatherings, fashion shows, luxury brand launch events, exclusive after parties, fundraisers/galas, and the like to garner media attention. This positions your hotel in the minds of potential guests as a sought-after aspirational place of choice. This exposure enhances the hotel’s perceived value and amplifies its prestige. These events may not be often, so it is important to identify the hometown celebrities and engage with those that influence demand such as travel agencies whose focus is entertainment and key event decision makers.

Influencer marketing. Curate influencers with strong social media engagement in luxury travel, lifestyle, and food and beverage to showcase a hotel’s unique experiences and drive visibility. Luxury hotels typically work with PR agencies to determine the appropriate influencers (consider the feeder market, niche, and brand of the influencer). Bespoke amenities, elevated service and one-of-a-kind designs distinguish the hotel as a must-visit destination, rendering the geographic location a secondary consideration. According to LinkedIn, social media has become the new word-of-mouth but amplified. Traditional word-of-mouth is limited, but one post or story can reach thousands in minutes, and the impact grows as others engage.

• The strength of influencer marketing was proven by Expedia launching its own Travel Shop in 2025, through which Expedia users can book the same vacation as the influencers they follow on social media.

Curated high-end ecosystem. Create an ecosystem of luxury that appeals not only to hotel guests but also to the local market.

• Celebrity chef affiliation. Establish a hotel as a high-end dining destination with a renowned chef, attracting both hotel guests and locals. The cachet of a celebrity chef implies quality, exclusivity, and prestige which offers a unique value proposition that is difficult for competitors to replicate, supporting a premium rate. Further, an in-house celebrity chef curating Banquet & Catering menus provides a selling advantage for high-end group businesses, where exceptional food and beverage quality is often a key decision driver.
• Retail and spa with luxury brand affiliation. Whether for an exclusive shopping spree or high-end spa treatment, on-site indulgent experiences can draw locals through the doors and build overall value. As locals experience the hotel’s various offerings, many begin to view it as a desirable staycation option, driving weekend occupancy and premium room sales.  If a hotel has an underperforming F&B outlet, underutilized meeting space or even a guestroom, consider the ROI opportunity in converting the space into luxury retail or spa to optimize profitability and build the hotel’s luxury positioning.
• Experiential Partnerships. Offer one-of-a-kind luxury experiences through partnerships with local vendors for guests who want the option to leave the property. Private yacht rides, personal training at a luxury gym, or guided trail hikes as available services create a luxury perception even if these offerings are not physically on property.

Stand-alone destination. Position the hotel as a stand-alone urban or destination resort to support higher ADR where the surrounding area may not inherently command premium pricing. Instead of capitalizing on location, a hotel should shift focus and position as a self-contained oasis (whether exceptional dining, show-stopping pool, world-class shows, or other high-touch experiential offerings).

Luxury consortia. After having done much of the work to create a luxury experience on property, communicating the messaging across appropriate channels is key. Presence on luxury consortia channels provides access to a pipeline of affluent guests who are focused on value and exclusivity. Through participation in American Express, Chase, Virtuoso, Capital One, etc. and showcasing exclusive amenities, complimentary breakfast, and experience credits, a hotel strengthens its positioning in the luxury market and drives premium bookings with the target guest.

• Consortia familiarization trips showcasing the hotel’s offerings to these sellers of higher-end experiences for the luxury traveler is paramount.

The goal is clear: position the property as a must-visit experience, not just a place to stay – regardless of its zip code. Through high-impact strategies like PR events, influencer marketing, and curated partnerships, luxury hotels can create appropriate demand and justify premium pricing in non-luxury destinations.

Contributed by Nina Kleiman, Michele Lin and Liza Shligerska, asset managers, Hotel Asset Value Enhancement, Inc (hotelAVE), New York City

The views and opinions expressed in this column do not necessarily reflect the opinions of Hotel Investment Today or Northstar Travel Group and its affiliated companies.