HNN contributor, March 10, 2023 | 8:21 AM – While 2022 was a year of rebuilding for many hotel companies and networks, The Leading Hotels of the World sought to make it a year of expansion by offering members new layers of support — specifically around procurement and technology
The membership collection had a “banner year,” said Shannon Knapp, president and CEO of The Leading Hotels of the World. She said the 95-year-old organization achieved $1 billion in hotel revenue in 2022, making it the single largest revenue-producing year LHW has had in its history. In addition, the collection added almost 30 members and now numbers about 420 properties. It expects to add a similar number of hotels and resorts in 2023.
Knapp said LHW experienced strong growth across all segments — groups, direct-to-consumer, travel trade, corporate and the network’s loyalty program Leaders Club.
LHW introduced significant enhancements to the organization, executives said, and perhaps the most significant was the launch of Leading Strategic Sourcing — LSS. Phil Koserowski, senior vice president and chief marketing officer, said the program is designed to help members with group purchasing and sourcing everything from distribution to bedding to property management solutions — nine categories in all. He said the pandemic accelerated the need for LHW to further support members with sourcing solutions.
Koserowski said LSS serves members by helping them capture new demand, access innovative sales, marketing and technology solutions and drive value to hotels in other strategically important categories.
In addition, LHW is building a technology stack that includes property and revenue-management systems along with mobile app that is coming soon, Koserowski said. The app is intended to empower travelers and deepen their experience throughout their journey from inspiration and booking to pre-arrival and on property. For hoteliers, it will offer highly customizable solutions to help them improve staff efficiency, enhance the guest experience and drive incremental on-property revenue.
None of these tools are mandatory for any individual hotels because it is important that member hotels do what is best for them, Koserowski said.
“We are a pure-play luxury collection with 80% of our members being family-led and 90% independent,” he said.
The company accepts only about 5% of applicants and typically vets over 500 annually. LHW is owned by 60 of its members.
One significant guest-facing change during the pandemic was making membership in the Leaders Club loyalty program complimentary in 2021. Partly as a result of that change, bookings though the program in 2022 exceeded those of 2019. For most of its existence, there was a fee to join the program, with the funds deployed to reinvest in it, Koserowski said.
He said membership was made complimentary because LHW realized the potential to scale as more consumers began traveling again. In addition, Leaders Club members can now book hotels directly through participating hotel websites and earn points rather than having to book through the program itself.
Customer behavior among guests has changed over the last few years — with travelers first seeking non-urban destinations and now returning to them. According to Knapp, writing in the LHW’s periodic Luxe Report last fall, the collection’s metropolitan properties, which were disproportionately affected by the pandemic, have seen a 100% increase in revenue since 2021. There is currently a 50-50 mix of city and resort member hotels.
A key market for LHW is luxury travel advisers, and the company has made efforts to enhance that relationship as well. Koserowski said starting in 2022, advisers booking a stay have been able to earn Leaders Club loyalty points for their clients. To maintain those trade relationships, the company participated in 40 industry events globally last year and is adding an inaugural multiday gathering in 2023 for its most loyal advisers around the world.
Sustainability has been taking center stage for LHW, Koserowski said. In 2023, a program will be unveiled that highlights hotels that are leaders in that area. A recent survey of customers showed that nearly 50% said sustainability is an important differentiator to them when researching hotels. In fact, 20% said they have booked a more expensive hotel because it had better sustainability practices.
Another shift was that last year Lynne Biggar, a senior adviser with Boston Consulting Group, was the first non-hospitality executive to join the Executive Committee of LHW. According to Koserowski, the appointment was to provide a different perspective to the organization’s operations.
Looking ahead, Koserowski said that LHW continues to develop key markets. With two-thirds of the portfolio in Europe, the company is focused on further developing in the Americas and select Asia-Pacific areas. There is still expansion in Europe in high-demand destinations, and this past year marked the entrance of several new countries for LHW, including Australia, Panama, Qatar and Jamaica. The group also expanded its presence in a number of places where it had product including Amsterdam, Edinburgh, Amalfi Coast, Hawaii, Costa Rica, Mexico City and Tel Aviv.
But growth is not a core mission for the company, Koserowski said.
“It’s about having the right hotels in the right locations that represent remarkable quality and individuals, and uncommon experiences,” he said.