Luxury hospitality is built on connection, not algorithms: Mandarin Oriental Hotel Group CEO
Luxury hospitality isn’t built on manuals or presentations. It’s built on something far more enduring: human connection.
In an age of predictive algorithms and AI-powered everything, it’s tempting to believe that technology can deliver luxury better, faster, smarter. It can’t.
Technology can personalize a stay, but it can’t make a guest feel seen. Algorithms can predict preferences, but they can’t offer warmth. And at its core, true hospitality is a human craft, rooted in care, instinct and emotion.
Consider these empathetic and extemporaneous actions. 1) A housekeeper notices medicine on a guest’s nightstand and, unprompted, arranges ginger and lemon tea for turndown. 2) A concierge sees a guest jogging each morning and leaves a fresh towel and chilled water by the door. These moments aren’t in a manual; they’re acts of care, driven by instinct and emotion.
This is where luxury opportunity lies. Not in resisting technology, but in doubling down on the human touch that sets us apart. In a world optimizing for speed and scale, luxury hospitality lies in slowing down, in personal, thoughtful connection.
At Mandarin Oriental, we’re entering a transformative period. And while our goal is to more than double our global footprint in the next decade (we’ve added seven new properties in two years, with over 30 more in development), no matter how much we grow, our success will always rest on one principle: business is built on human connection.
On a recent visit to one of Switzerland’s renowned hotel schools, I was asked a question that I get a lot: “Can hospitality still offer a meaningful career?” It’s a fair concern in an age where technology is seemingly changing our world beyond all recognition and reshaping what work even looks like. My answer? It’s an emphatic “Yes,” with one provision: You view hospitality not just as a job, but as a craft. It’s a calling—a profession of purpose.
For those who feel the spark, hospitality can be a lifelong journey of meaning, growth and creativity. Where empathy is an asset and passion has purpose.
The timing couldn’t be more exciting. Luxury hospitality is expected to grow nearly 10% per year over the next five years. I am proud to lead a company that is proud to be part of that momentum. We’re moving fast, reimagining wellness experiences, innovating in F&B and using AI to personalize the guest journey.
Innovation alone, however, doesn’t create loyalty. What keeps guests coming back are the people who bring these experiences to life. To truly bring our brand to life, we need passionate people, who can make each moment meaningful.
That’s why we invest so deeply in talent. Our Rising Fans program, for instance, helps early-career colleagues grow into future leaders. We promote international mobility. We support wellbeing. Most of all, we empower our teams to express their individual craft across every aspect of the guest experience, from rooms and dining to guest experience design and wellness.
Nobody is better positioned to seize the moment than the next generation; one raised in a fast-moving, digital-first world. They intuitively understand technology—its speed and scale. They bring new energy, new ideas and a new lens. And if they bring their curiosity, creativity and openness to this profession, there’s no limit to what they can create. They’ll shape its future using technology not to replace the human connection, but to deepen it.
This is not an easy path: The hours are long and the demands are high. But few professions offer something so rare: The chance to brighten someone’s day, every single day.
Every role, whether guest-facing or behind the scenes, is a canvas for excellence. For those ready to bring passion to their craft, the future of hospitality is rich with opportunity. Because no matter how far we expand, or how advanced our tools become, luxury hospitality will always be defined by the people who bring it to life.
And that is what makes this profession not just meaningful, but truly exceptional.
Trump partners on tokenized Maldives resort
https://www.hotelinvestmenttoday.com/Development/Brands/Trump-partners-on-tokenized-Maldives-resort?By Jeffrey Weinstein
NEW YORK CITY – As The Trump Organization expands its cryptocurrency business, news comes that it is launching a tokenized hotel development in partnership with the London-based unit of Saudi luxury real estate developer Dar Global with Trump International Hotel Maldives set to open by the end of 2028.
In what the Trump Organization calls a first, this initiative tokenizes the development phase itself, offering investors the opportunity to participate in the real estate project from inception.
Located just 25 minutes by speedboat from Malé, the Trump International Hotel Maldives will feature approximately 80 ultra-luxury beach and overwater villas.
The partners have also worked on projects including Dar Global’s Trump Towers in Jeddah and Dubai, as well as resorts, luxury homes and golf courses in Qatar and Oman.
“We are delighted to bring the Trump brand to the Maldives in collaboration with Dar Global,” said Eric Trump, executive vice president of The Trump Organization. “This development will not only redefine luxury in the region but also set a new benchmark for innovation in real estate investment through tokenization.”
Ziad El Chaar, CEO of Dar Global, added, “Dar Global continues to push boundaries, from developing world-class destinations to pioneering new investment structures. Tokenizing the development of Trump International Hotel Maldives marks a global first that blends luxury, innovation, and technology in a way that will transform how the world invests in hospitality.”
The Deloitte Center for Financial Services predicts that $4 trillion of real estate will be tokenized by 2035, increasing from less than $300 million in 2024, with a CAGR of 27%.
In 2022, Saudi Arabian Dar Al Arkan Real Estate Developer dropped a limited number of utility NFTs (non-fungible tokens) for its $1.6 billion AIDA mixed-use project in Oman. It is a partnership between Dar Al Arkan and the Oman Tourism Development Company (OMRAN Group).
Though debt markets improved, uncertainty holds back hotel buyers
The hotel deals environment has slowly improved over the course of the year, but there are still factors holding back both buyers and sellers.
During their recent third-quarter earnings calls, hotel real estate investment trust execs spoke about their respective deals and the overall transaction environment as well as their expectations for next year.
James Risoleo, president and CEO, Host Hotels & Resorts
"So, on many occasions, both in meetings and on earnings calls, I've said that we will be opportunistic with our capital allocation when it comes to dispositions and acquisitions. And the two deals that we've already announced and provided metrics on this year, I think, are really strong indications of our ability to execute. To sell the Washington Marriott Metro Center at 12.7 times trailing 12 months [earnings before interest, taxes, depreciation and amortization], a 6.5% cap rate [on an] urban hotel is, I think, a solid read through in many ways with respect to what sort of value is locked in this company. I mean that's not one of our best assets. And we're trading at 9.4 times plus EBITDA plus or minus, and we're able to execute on that deal at 12.7 times. Come on, guys, where's the multiple? Let's go.
"And the same with the disposition of the Westin Cincinnati, as well as when we're in a position to talk about it, I think you'll be pleased with the metrics on the St. Regis in Houston as well. We're not in a position to talk about that today. So we continue to test the market. We don't have to sell anything. I'll make that perfectly clear."
Tom Fisher, co-president and chief investment officer, Pebblebrook Hotel Trust
"So I think just as a general backdrop, the transaction market has kind of been gyrating between risk-on and risk-off all year. The one constant throughout the year, however, has been the debt markets. The debt markets have been improving. They're getting more competitive. There's more availability, there's better pricing. And in some instances, it's actually becoming an alternative to a sale for many sellers from that perspective. Because I think on the equity side, again, it's kind of more risk-on, risk-off.
"I think ... [the] government shutdown would be kind of flat to negative operating performance that you see in the weekly and monthly stars. I think STAR reports, we're just kind of at a pause right now until there's a little more macro clarity. But what I would say to you is, over the course of the last 60, 90 days, we've seen, I think, a real pent-up demand by investors. You've seen some larger transactions take place. You've seen a return of some of the bigger private equity names. You've seen some of the owner-operators.
"So I think there — my sense here is that, there's just — they're all just waiting for that catalyst. And I think if you listen to what Jon [Bortz] had indicated in our call about 2026, I think once things turn and there's better visibility, I think there's going to be a lot of pent-up demand for transactions moving forward. I think the risk-off situation right now is nobody really wants negative leverage and they're focused on smaller deals and those will continue. But until there's some clarity, I think we're going to be a little bit of a pause here."
Thomas Baltimore Jr., president and CEO, Park Hotels & Resorts
"Really our top 20 assets account for 90% of the value of the company, and if you really focus the core metrics of those 20 assets, it's really as strong as any portfolio in the sector. We remain laser-focused on selling [15 non-core assets] and recycling that capital. I think it's important to remind listeners, we have sold or disposed now of 47 assets for north of $3 billion since the spin. So we have [sold] in the worst of times, even during the pandemic. Keep in mind, we had six assets in San Francisco. We now have one asset, and we sold two of those in the worst of times during the pandemic. It is challenging in this environment. It's not an issue of of debt. There's plenty of debt capital. There's plenty of equity capital. I think if you can get just better visibility and less volatility that certainly will help."
...
"There's plenty of liquidity out there, and I think the buyer pool is mixed. I mean, you've got from owner-operators, certainly family offices, you've got small private equity to larger private equity. You've really got the normal menu. And as I think about assets, our team has had great success in really finding that buyer for a particular opportunity. And we continue to come through and have discussions.
"I think the hesitation with some buyers is debt markets certainly have improved. But if you believe that rates are going to continue to come down, you might be a little more hesitant on that front. And then certainly, just better visibility on the demand front. And probably, candidly, just clarity on some of the geopolitical and trade and inflation. I mean, all the things that all of us are working through right now. Uncertainty really is the enemy of decision-making.
"So I do think that there are some buyers out there that are being a little more hesitant. And in some cases, we certainly understand that. From my own experience, periods of dislocation really create the best opportunities to be buyers, particularly if you've got an intermediate and longer-term hold period. Obviously, we continue to work hard. Again, we've got the track record. And I just — I can't emphasize that enough and how we've been able to reshape this portfolio since the spin here, and now we're 47 assets that we've sold or disposed of and two more in the queue and several more at various stages, whether [letter of intent] or the marketing process."
Leslie Hale, president and CEO, RLJ Lodging Trust
"I would say that, in general, the transaction environment continues to be overshadowed by the uncertainty, and the sentiment around transactions is a little bit volatile. So the market is not necessarily fully functioning because there's a lack of conviction in terms of underwriting and [property improvement plan] cost given the tariff situation. But the debt market is open, and so that will help volume increase. Deals are taking a little bit longer, and most of the deals that are getting done are deals that are better suited for owner-operators. And so overall, we're constructive, and as things sort of settle down, you should see us be more active. And that would be active on transactions that we think can actually get done."
Justin Knight, president and CEO, Apple Hospitality REIT
"We have always been disciplined in our approach to capital allocation, balancing both near- and long-term allocation decisions to capitalize on existing opportunities while securing the long-term relevance, stability and performance of our platform. Through all phases of the economic cycle, we seek transactions that enhance the quality and competitiveness of our existing portfolio, drive earnings per share, create value for our shareholders and ensure we are well-positioned for future outperformance.
"In the current environment, we have strategically executed select dispositions and forward commitments on new development to manage our near-term CapEx needs and to ensure we are exposed to markets with strong growth profiles. At the same time, we have been able to take advantage of near-term opportunities that exist because of the disconnect in public and private market valuations, using proceeds from dispositions and cash from operations to fund share repurchases.
"We will continue to adjust tactical capital allocation strategy to account for changing market conditions and to act on opportunities at optimal times in the cycle to maximize total returns for our shareholders.
"Since the beginning of this year, we have completed the sale of three hotels for a total combined sales price of $37 million, including our full-service Houston Marriott, which we sold during the third quarter for $16 million. We currently have four hotels under contract for sale for a total combined sales price of approximately $36 million, including the previously announced pending sale of our Hampton and Homewood Suites in Clovis, California, as well as the contracted sale of our Hampton and Homewood Suites in Cedar Rapids, Iowa. We anticipate closing on the sale of these hotels during the fourth quarter of this year.
"While the overall transaction market continues to be challenging, we have successfully executed on select asset sales and ways to continue to optimize our portfolio concentration, manage CapEx and free capital, which we have been able to accretively redeploy at a meaningful spread. Pricing for the individual hotels varies."
Jeffrey Donnelly, CEO and director, DiamondRock Hospitality Company
"With respect to the transaction environment, we continue to underwrite acquisition opportunities, mostly group-oriented hotels, urban select service hotels and resorts. While we had our eye on a few potential candidates this past quarter, we did not feel the ultimate pricing was defendable after considering realistic CapEx needs versus where our shares are trading. In general, we see upper-upscale resorts with asking cap rates in the 7% to 9% range, but inclusive of near-term CapEx needs, the all-in cap rate was closer to 5% to 7%. Similarly, the ask for luxury hotels remains in the 5% to 7% range or about 4% to 6% all in. At that pricing, our strong preference is to reinvest in the luxury and upper-upscale hotels DiamondRock already owns through share repurchases.
"On the disposition side, we continue to have active conversations around the disposition of a handful of our assets, and we expect to remain active in the market in the coming year. We have nothing to share at this time, but we believe we will see elevated capital recycling in the next 12 to 18 months compared to our history."
...
"I think there is an appetite. I think for a while there earlier this year, it probably had a little bit of a pause. I think it's coming back because I think there's an expectation that RevPAR growth is going to be stronger next year. Interest rates are coming lower. So, it feels like probably a better environment where they could sort of strike and get the growth that they need to sort of drive the returns that private equity would need if you were looking for those types of situations.
"The only thing I would just caution, and I say this to everybody, is that ultimately, a lot of that math works where you can drive financing on assets. And for financing, you need cash flow. Effectively, it's very hard for people to kind of underwrite assets in markets where cash flow is not recovered. It's one of the struggles even we have when we look at some of the markets.
"For example, like on the West Coast, where you can have RevPAR recovering but assets still losing money. That's very hard from a pricing standpoint. And I would say that applies to public companies, too."
Jonathan Stanner, president and CEO, Summit Hotel Properties
"We always have viewed that there's kind of a bottom 10% of the portfolio. And I think when we think philosophically about capital allocation, what we want to make sure we do is we always have a portfolio, a real estate portfolio that is — that's consistent with where guest expectations and what guests — where they want to stay.
“And so, we feel like we constantly have to evolve the portfolio. That's what we've done historically. That's what you can expect from us going forward. And again, I think without quantifying it or identifying specific assets, you should always expect us to be an active recycler of capital.
“One of the things that we have prioritized is identifying slower growth assets that have significant capital needs. And again, if you look at the dozen assets we've sold over the last couple of years, you'll see lower cap rate deals and assets that needed pretty significant capital expenditures over the next several years.
“And so again, we've been very pleased with that execution. It is still a very soft transaction market generally.
“As everyone is well aware, there have not been a lot of deals that have gotten done. A lot of that, I think, has been driven by some of the uncertainty on the fundamental side of the business and the lack of RevPAR growth that we've seen over the course of the second and third quarters. We do expect that to improve as we get into the later parts of this year and into next year. But again, our efforts have really been very focused on finding the right buyer in the right market, and I think we've been successful doing that."
Marcel Verbaas, CEO, Xenia Hotels & Resorts
"I mean it seems like kind of contrasting it to where things were maybe six to 12 months ago. It does seem like there are some more hotel transactions coming to — potential hotel transactions coming to market. It does seem like there's a little bit more volume that the broker community is seeing. And as it relates to us, I mean, obviously, we're still looking at the various ways how we can allocate capital, and given our cost of capital at this point, especially with how attractive our own portfolio looks and share buybacks continue to look probably more attractive than acquisitions at this point, I wouldn't expect us to be really active on the acquisition side here in the very near future.
"I think a lot of that's going to have to do with what happens with pricing in the private markets if there is maybe a little bit more now softness, if you will, if prices are coming down a little bit, and they come a little bit closer to what we view to be something that is a good use of capital for us. But I don't foresee that here really in the very short term.
"As it relates to dispositions, we'll continue to look at what we've always done. This doesn't make sense to continue to fine-tune the portfolio slightly, especially when it comes to assets that may need some additional capital where we don't feel the appropriate [return on investment] might be — we might be able to get the right appropriate ROI on those projects.
"So we'll continue to evaluate that. I wouldn't expect any wholesale changes, but we certainly could see another disposition or two over the next 12, 18 months as we continue to fine-tune and review our portfolio."
Bryan Giglia, CEO, Sunstone Hotel Investors
“We continue to execute our strategy and are working to recycle more assets. The transaction market remains depressed, and equity capital, especially for larger deals, remains tight. We regularly meet with financial and other advisors to discuss market conditions and potential alternatives available to the company.
“We have a great portfolio with meaningful embedded growth, and we have a well-informed and realistic view of the market and the value of our portfolio today and what we expect it to be in the future. At the same time, we also understand the lack of depth and liquidity in the current transaction environment. We are also well aware that market conditions can change quickly, so we will remain nimble and ready to pursue any alternative that will create value for our shareholders.”
Native ingredients are the next wave of regenerative tourism
Regenerative tourism and stewardship are now mainstream. They are profitable ventures for those hotels and resorts that put in the blood, sweat and tears to set up the programs properly.
Agrobiodiversity is a niche way to create exceptional guest experiences and drive demand or average daily rate lift.
In today’s world of endless brand expansions and luxury hotel popularity, guests yearn for places that offer more than just beach access. They want exclusivity and are willing to pay more for it — exclusive access to historic sights, private excursions to remote destinations or, in this case, the ability to taste unique, esoteric foods.
The next step for regenerative tourism
Embracing agrobiodiversity is another step hotels can take, one that’s both noble and also not well-known.
It's a practice becoming increasingly important as climate resiliency efforts become more common. Agrobiodiversity involves the planning efforts to shift away from monocropping, or the widespread planting of single crops on the same land year over year. Monocropping is a contributor to carbon emissions and puts people at risk of superbug-borne food scarcity or crop collapse.
The revenue opportunity for hotels is to support food crop resiliency through agrobiodiversity as a method to ramp up a brand’s regenerative cachet, heighten the availability of locally sourced nutritious foods and create culinary, wellness or agricultural experiences that sell.
More about agrobiodiversity
Agrobiodiversity is the practice of increasing the variety of food crops grown, both within a species by using heirloom cultivars or landraces, and by farming different edible species that are either highly regional or not commonly known at the supermarket.
These are not the bananas and corncobs at your local grocery store, which have been domesticated and genetically modified, resulting in high-yield crops that come at a price of a large carbon footprint and dependence on pesticides.
Indigenous crops are hardier and well-adapted to their region, most often requiring no chemical sprays or other additives. Yields are smaller and growth has its challenges, but agrobiodiversity is next-level regenerative agriculture, helping provide foods that may resist blights while restoring soil quality and contributing a lighter carbon footprint.
For every fruit and vegetable that hits the shelves in the average North American or European supermarket, there are dozens or hundreds of wilder, largely undomesticated species, each with a story to tell.
Instead of mangos, why not wild mangos? Cavendish bananas are high yield but also highly boring because you can find them all around the world, so why not wilder types like blue java or pink? In the bakery, try out spelt or einkorn wheat instead of the lower-nutrient durum that’s in nearly all bread products. Consider underappreciated herbs, nuts, tubers, seeds, sauces, desserts, cheeses, beverages and even cocktail recipes that an intrepid proprietor can bring to the forefront.
This is the goal of agrobiodiversity for hotels: Tell the story of the planet’s beauty by refocusing on the forgotten foods of the local land, and turn a profit for your efforts.
How to make money from agrobiodiversity?
In a word: experiences. If you are serving the same food as the restaurant down the street, what makes your restaurant special? Service, decor and presentation will work, but agrobiodiversity activates a fourth lever.
While this is more of a trend for rural properties, an urban hotel can partner with heritage farms or develop approachable education campaigns in collaboration with local chefs to fight cuisine homogenization. In a push for hyperlocal, this can be an angle to consider. To add to the prestige for a restaurant, organizations like Michelin have their Green Star program to highlight sustainable F&B businesses. Regardless, a lot of thought has to be given to the strategy as these relationships will require a purchasing manager, tighter reordering controls and more seasonal menu reshuffling.
A hotel can go further than a restaurant by offering elements of culinary immersion. Think cooking classes that showcase rare foods, or an onsite organic garden or agroforestry setup for tours and farm-to-fork experiences.
Agrobiodiversity can impact the spa where skincare or cosmetic products can be infused with rarer, local ingredients.
Right now, agrobiodiversity is mostly a luxury play. Guests are willing to pay more per plate for tasting these esoteric ingredients. And with today’s shift in value away from McLuxury properties, guests want more than just beach access, a bar overlooking the ocean and a spa with great massages. They crave sense of place, authenticity, exclusivity and scarcity.
Ultimately, agrobiodiversity is hardly a silver bullet towards obtaining that uniqueness that draws in the jetsetters, but it can be a key pillar for defining the brand.
Examples in hospitality
Here are a few places already embracing the practice of agrobiodiversity:
1. The Lodge and Spa at Brush Creek Ranch north of Denver in Wyoming embraces the ranch-to-table philosophy for high ADR. The lodge grows 80 different varieties of fruits and heirloom vegetables in their greenhouse, and the grains power their distillery. The lodge supports the regrowth of indigenous crops and also leans into sustainable, foraged ingredients like juniper for distilling gin, wild herbs like blackberry mint, and sour berries that are significantly higher in antioxidants than their store-bought comparisons.
2. The Peninsula in Bangkok offers a Thai herbs 101 program from the hotel’s own ‘Naturally Peninsula’ garden. The course invites guests to discover Thailand’s most renowned herbs and spices used in many natural products such as foods, medicines, cosmetics, essential oils and balms with ingredients like kaffir lime, lemongrass, galangal, krachai, fingerroot, citronella and turmeric – all an integral part of Thai culture.
3. Aitutaki Lagoon Private Island Resort in the Cook Islands has only 33 bungalows and also an organic garden. It grows mainstays like coconut, papaya, bananas and limes but also breadfruit and the indigenous, ‘exploding planet’ Hala fruit for guests to try. Adventurous guests may even try the ‘vomit fruit’ noni, which has been renowned in Polynesia for its medicinal qualities for centuries.
4. The Fairmont Rio de Janeiro Copacabana’s signature restaurant, Marine Resto, has its own branded olive oil. Rather than import olive oil from the Mediterranean, this hotel takes advantage of Brazil's burgeoning olive oil production capabilities. They source fruttato olives locally, thereby supporting this growing industry and also helping fulfill Accor’s Planet 21 sustainability pledge.
5. To bring this over to the restaurant side, Gustu in La Paz, Bolivia, has set up a localized supply chain and rotating menu that celebrates Bolivia’s diverse ecosystems and promotes niche crops from the Andes and Amazon such as inca nuts and mashua tubers, as well as traditional dishes like thayacha, or Andean ice cream.
6. Hardly the only restaurant that’s embracing local biodiversity, another example from South America is Nuema, in Quito, Ecuador. Over a multi-course tasting menu, diners experience more than 75 ingredients sourced from the country’s different ecological zones, including macambo, or "the other chocolate."
7. Buahan, a Banyan Tree Escape in the jungles of Bali, Indonesia, offers a Traditional Jamu Elixir experience. Here, guests are taken through the full process of making this ancient health tonic starting with the roots, bark, spices and seeds through to cooking and consuming.
Contact us through our website for book recommendations that touch on agrobiodiversity.
Adam and Larry Mogelonsky are partners of Hotel Mogel Consulting Ltd., a Toronto-based consulting practice. Larry focuses on asset management, sales and operations while Adam specializes in hotel technology and marketing.
Comments
Post a Comment