How Resorts are Learning from Luxury and Lifestyle Retail Developments: Part 2

In our last conversation, we touched on how resorts are picking up some key strategies from luxury and lifestyle retail to boost their guest experiences and, of course, their revenue. Today, I want to dive a little deeper into this, especially since the distinctions between resorts and lifestyle centers are pretty significant and worth paying attention to.

The Unique Position of Resorts

Here’s the thing about resorts—they’ve already secured something that lifestyle centers have to work hard to capture time. For high-net-worth individuals (HNWIs), their most precious commodity is time, and when they book a resort stay, they’re essentially handing that time over to the resort. Unlike lifestyle centers, which have to first draw people in and convince them to spend their time (and money), resorts have a captive audience from the get-go.

Now, think about this: at many top-tier resorts, more than 30% of the guests are arriving by private jet. These guests typically take up 1.5 rooms on average, with daily rates hovering around $1,500 per room. That’s $2,250 spent each day just on accommodations. But here’s the kicker—they’re also likely spending an equivalent amount on food, beverages, retail, spa services, and activities. When you do the math, it’s easy to see how the total cost of a trip can exceed $50,000. And if you start calculating that as just one of many similar trips these guests take annually, you can begin to back into their household incomes.

Shopping: A Key Activity at Resorts

Let’s talk about shopping for a minute. If you’ve spent any time at a resort, you’ll notice that guests often gravitate towards shopping after they’ve done the rounds of other activities. In fact, shopping often ranks as the most frequent activity among resort visitors. And here’s something interesting: the biggest purchases are usually made on the guest's third visit to a shop. This tells us that creating compelling retail experiences that encourage repeat visits is key.

Another point worth noting is that sales per square foot in resort hotel restaurants and shops can often blow non-resort merchants out of the water. The potential for generating significant revenue through well-curated, high-quality retail offerings is huge.

Enhancing the Guest Experience with Nighttime Activities

Guests at 5-star resorts are looking for a full day of activities, including after dark. Dinner and a couple of drinks aren’t cutting it anymore—they want more. This is where offering fashion shows, special trunk shows, and other unique nighttime events can really make a difference. These kinds of activities, along with better dining options, attractions, and shops, not only enhance the guest experience but also encourage longer stays.

The Power of Resort Logo Products

Let’s not forget about resort logo products. When these items are high-quality and symbolically tied to an exclusive trip, they sell like hotcakes. Guests love feeling like they’re part of an exclusive club, and resort-branded products tap right into that desire. The margin on these items can significantly boost the bottom line.

Areas for Improvement in Resort Retail and Dining

But here’s the flip side: many resorts aren’t hitting the mark when it comes to their retail presentations, merchandise assortments, and curating goods to the highest margin items. The retail, dining, experiences, and attractions at resorts are often misunderstood by the hotel feasibility study industry, which usually takes a different approach. This is a missed opportunity, plain and simple.

Another area where resorts often fall short is in their kitchens. Resort kitchens tend to be oversized and too generic, which leads to bland and uninspiring culinary experiences. These large kitchens are designed to be highly versatile, accommodating everything from room service to large group functions. But because hotel food service operators don’t pay rent on these spaces, they often overlook the cost and inefficiencies. The result? A generic approach to cooking that doesn’t deliver the high-quality dining experiences that discerning guests expect.

And let’s be honest—executive chefs in hotels often aren’t focused on gourmet dining. They measure by speed of delivery, table turns, and comps sales to maintain their Yelp ratings. That’s requires a whole different mindset from sourcing ingredients to food prep, cooking, presentation, and service. Gourmet restaurants in urban settings typically aren’t found within hotels because guests want to explore the local dining scene. But in resort settings, those same discerning guests expect gourmet dining options within the resort itself. Take Blackberry Farm in Walland, Tennessee, for example—they’ve nailed this concept.

Conclusion: The Path Forward for Resorts

So, what’s the takeaway here? To really capitalize on the time and attention of affluent guests, resorts need to borrow a few more pages from the playbook of successful retail and lifestyle centers. This means fine-tuning their retail offerings, curating high-margin products that resonate with guests, and optimizing their dining experiences for both quality and efficiency. By doing so, resorts can not only enhance guest satisfaction but also significantly boost their profitability.

There’s a lot of potential at the intersection of retail and hospitality, and resorts that embrace these lessons in both retail and dining will be well-positioned to thrive in an increasingly competitive market.