Luxury hotels struggle to connect with modern guests

Standardized design and late-stage thinking weaken differentiation in a more demanding luxury market

The luxury hotel sector is facing a growing challenge as guest expectations evolve faster than many properties can adapt. Industry designer Scott Miller argues that many hotels still rely on familiar design formulas that fail to create memorable, place-driven experiences. As younger, highly experienced travelers become the dominant luxury segment, traditional markers of luxury no longer differentiate. For hoteliers, the implication is clear: competitive advantage is shifting from aesthetic execution to how well the entire guest experience is conceived from the outset.

Key takeaways

• Commoditization of luxury: Many luxury hotels now feel interchangeable, reducing brand differentiation and making it harder to justify premium pricing.
• Rising guest expectations: Millennials and Gen Z guests expect authenticity, personalization, and a strong sense of place, not just polished design and amenities.
• Traditional luxury signals losing impact: High-end materials, wellness offerings, and curated interiors are now baseline expectations rather than competitive advantages.
• Design brought in too late: When designers are engaged after positioning and operational decisions are fixed, their impact is limited to aesthetics rather than experience strategy.
• Experience must be designed upstream: Leading approaches focus on defining guest archetypes, spatial flow, and use cases early in development to shape a coherent experience.
• Scale as a strategic lever: Smaller, more intimate properties can compete effectively by delivering tailored, human-centric experiences that larger resorts often struggle to replicate.
• Operational integration matters: The most successful luxury concepts align design with operations, F&B, service flow, and guest journey to create a seamless experience.
• Developer mindset is the bottleneck: The industry’s ability to evolve depends on whether owners and operators are willing to involve design and experience thinking earlier in the investment and planning cycle.

Source: Forbes

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