In early February of this year, Pendry Hotels opened its first-ever location in the historic Gaslamp District of San Diego. An offshoot of five-star luxury hospitality group Montage Hotels & Resorts, it’s an urban locale for trendy travelers seeking “simple luxury, clean design, well-crafted restaurant experiences, vibrant bars, and that perfect balance of polished comfort and modern edge.”
Six months prior, America’s third largest private aviation provider, XOJET, launched a brand new partnership with technology and app developers, JetSmarter. Complementing XOJET’s revolutionary on-demand pricing model, it gives sophisticated consumers Uber-like access to private jet charters using a quick and convenient mobile app.
About a year before that, another private aviation company, Tradewind Aviation, introduced a daily shuttle service from New York to Boston. The premise: Using private FBOs, not commercial airports, frequent business commuters can enjoy the efficiency and convenience of private air travel by reserving a single seat aboard a private aircraft, in this case a Pilatus PC-12.
Besides being clients of AZDS, these brands all share one common denominator: They are part of a growing segment of upscale brands offering a modern alternative to “classic” luxury.
Much like Hilton’s Curio Hotels or Tesla’s Model 3, they are generally less expensive than their traditional counterparts—say Porsche, NetJets, or Four Seasons. They are also less exclusive: Pendry is “younger,” XOJET is more accessible, and Tradewind is more convenient.
Yet for all their differences, these new “lifestyle” brands still maintain a certain standard of luxury-level service, quality, and hospitality. Think of it as the democratization of luxury: What was previously only affordable by the ultra-wealthy is now within reach of a whole demographic of new consumers.
Far from speculative, this groundbreaking development comes in direct response to new demands placed on the luxury market over the past decade. The traditional luxury consumer—typically older, affluent buyers seeking exclusivity and privacy—will never be obsolete, nor will traditional brands like Four Seasons, Rolex, Louis Vuitton, or Ferrari.
But with the emergence of technology, online shopping, and the sharing economy, luxury brands are suddenly hitting the radar of an entirely new subset of qualified consumers. Of the 330 million people who purchased luxury products worldwide in 2014, only 150 million were considered to be “true luxury” buyers (consistently spending high amounts on products like perfume, fashion, and fine jewelry). The remaining 180 million are unconventional luxury consumers in more ways than one: not just new to the market, but bringing with them a whole new set of expectations, ideals, and demands.
Lifestyle brands, like Pendry Hotels or Curio Hotels, are luxury’s answer to these new demands. Generally speaking, new luxury consumers tend to be younger in age and tend to value convenience over extravagance and luxury experiences over luxury items. So in launching new lifestyle hospitality brands, the focus is less about champagne and caviar and more about craft beer, farm-to-table restaurants, and curated local culture. It’s supply and demand at its finest: Consumers are drawn to luxury products that tell a story and enhance their experience—not necessarily their social standing.
In the end, how this new luxury niche ultimately performs remains to be seen. But as a marketer in an increasingly diversified industry, to me it’s a fascinating story of demographic insights and how markets react to the demands of consumers.
The bottom line is this: Though traditional luxury remains alive and well, luxury as a whole is no longer the one-dimensional bubble it used to be. Experience over exclusivity—luxury is evolving and marketers must do the same.