How Resorts are Learning from Luxury and Lifestyle Retail Developments: Part 1

This blog is the first of a two-part series exploring how resorts are increasingly learning from the retail industry, particularly the luxury and lifestyle sectors. The cross-pollination between these two industries is shaping the way destination resorts are conceptualized, designed, and operated.

Early in my career, I focused on the challenging task of redeveloping distressed and failed malls. By re-merchandising and repositioning these properties as off-price, discount, and outlet centers, I was able to turn them around successfully. This led to opportunities to reposition festival marketplaces like the Old Post Office in Washington, D.C., and Jackson Brewery in New Orleans. Following these successes, I was presented with opportunities to start fresh with new developments like Barefoot Landing in Myrtle Beach and Gulfstream Village in Aventura, where the emphasis was on crafting experiences from the ground up rather than fixing old, failed concepts. These projects laid the foundation for my later work in re-envisioning the retail, dining, and guest experiences at luxury resorts such as Four Seasons Maui, Ritz Carlton Half Moon Bay, Four Seasons Punta Mita, and Hotel Del Coronado.

Traditionally, hotel feasibility studies have focused on metrics such as the number of keys, occupancy rates, Average Daily Rates (ADR), Revenue per Available Room (RevPAR), and the market share of competitive hotels. These metrics are effective in major travel markets where demand is driven by business travelers, interstate travelers, and the visitor market.

However, for destination resorts, this conventional approach is often insufficient. Destination resorts require more than just beautiful surroundings—they must offer a variety of attractors, activities, and experiences that go beyond the typical offerings of golf, snow skiing, and water recreation.

It's no longer enough for resorts to rely solely on these traditional attractions. Families quickly exhaust the novelty—kids get sunburned by the second day, the lazy river loses its charm by the third, and there's only so much golf one can play before the family starts demanding other activities.

The monotony of dining at the same three-meal-a-day restaurant can wear thin, and research shows that guests are less inclined to leave the resort for dining or excursions than previously anticipated. This creates a clear need for resorts to diversify their on-site offerings, including multiple restaurants, retail experiences, and entertainment options.

Interestingly, luxury retail brands, long masters of selling added value through creating rarity, meaning, and connection, are now venturing into the hotel business. These brands understand the importance of creating immersive experiences that resonate with consumers on a deeper level. Their expertise in crafting exclusive environments and memorable experiences is being translated into the hospitality sector, where they are setting new standards for guest engagement and satisfaction.

As an example, just before the financial meltdown of 2007 I worked with Dubai Infinity Holdings on the Isla Moda (Island of Fashion but fashion as a lifestyle) project in the ill-conceived world islands where Carl Lagerfeld conceived an Island Mansion with luxury salons as opposed to shops with 6-star hospitality and an extraordinary food culture.

As resorts adapt to these evolving expectations, they are increasingly learning from the strategies employed by luxury and lifestyle retail developments. By offering a mix of shopping, dining, and entertainment, resorts can create a fully immersive, self-contained experience that not only satisfies guests but also drives additional revenue streams.

In the next installment of this blog series, I will explore the financial dynamics of in-resort spending, including the profitability of resort logo shops, the ratio of in-resort expenditures to room revenue, and the critical role that retail plays in enhancing the overall resort experience. Stay tuned as we continue to uncover how these insights are transforming the future of resort development.