The New Luxury

A letter from the founder.

Our ongoing series, AFAR Conversations, will turn its focus to the topic to luxury on January 21 in New York City. Estimates of global spending on luxury range from $300 billion to $1.8 trillion, but no matter how you slice it, it’s an enormous market. It is also one that has changed radically in recent years. I sat down with one of the three panelists who will be joining us to get his perspective on luxury.

John T. A. Vanderslice is the Global Head of Luxury Brands for Hilton—he oversees Conrad, Waldorf Astoria, and the new Canopy brand. Prior to joining Hilton, Vanderslice was the Chief Executive Officer for Miraval Spa, in Tucson, where he transformed the 13-year-old spa into a top-ranked lifestyle brand. He also served as the President and Chief Executive Officer of Club Med Americas and is credited with repositioning the all-inclusive resorts as upscale destinations.

AFAR: How have you seen luxury change over the last decade?

Vanderslice: Six or seven years ago, when we were at the worst of the economic downturn, people were wondering if luxury was dead. It killed a lot of business in Europe and America, as we all knew. But those of us who had been around awhile knew a few things from experience. We knew luxury would come back, as it did after 9/11 and the Gulf War. We didn’t know how it would come back, except that it would be very different. At the time I prepared a luxury manifesto, where I went to all the leaders of luxury I could find—people like Danny Meyer, Tommy Hilfiger, and others. I started then to realize that the new luxury would emphasize experiences over things.

Now that we better understand the new luxury consumers, there have been some things that are surprising for all of us. They are younger. More of them identify as entrepreneurs. They may appear more casual and relaxed at first glance, but they often have very high expectations about service. Globally, they are coming from the BRIC countries, of course, but we’re also seeing more from other countries like Malaysia and Indonesia. How you approach these new luxury consumers is very different from the approach that might work best with a 75-year-old guy from Connecticut wearing a bowtie.

AFAR: How do you talk to these new luxury consumers

Vanderslice: We have three luxury brands at Hilton: Waldorf Astoria, Conrad, and the newest addition, Canopy. Waldorf Astoria provides high service—it’s like our Rolex brand. Conrad is like our TAG Watches—still a luxury brand but with a different approach. It’s best reflected in our Conrad Concierge. It’s an app that is hardwired to all the hotel services. You can order room service before checking in. Set up your wake-up calls. You can send instructions to the valet. It’s helped increase our non-room revenue and also led to higher service ratings from those who use the app then those who don’t.

It’s also made it possible to provide Conrad service in the first language of the guest more seamlessly. If you are a Japanese traveler at the Conrad in Seoul, you can make all your requests in your own language. It bridges a gap and makes many travelers more comfortable. It highlights the role that luxury can provide in changing the luxury space.

At Canopy, our newest brand, we are celebrating great neighborhoods and targeting so-called “cultural creatives.” The staff are enthusiasts for the places where the hotels are located. “Local” may be an overused term these days, but Canopy is about embracing what is nearby—the new wine bar, the latest gallery show—and sharing that with guests.

AFAR: Do you see different subsets of luxury travelers and consumers?

Vanderslice: People talk about Millennials or female travelers, for example, having different demands but I think the reality is that it’s more about mindsets than anything else. The 30-year-old man on business and the 50-year-old woman on business often have the same needs. The people who, for example, like Starbucks, yoga, and pinot grigio cross age and gender groups. In the end it’s more about psychographics than demographics, and most travelers will also move from one psychographic group to another depending on whether they are traveling for business, with their family, or with only their partner.

AFAR: How would you define luxury?

Vanderslice: In the end, luxury is personal. Exclusivity, quality, and attractiveness are some common “hard” definitions of luxury, but it’s all personal and emotional. A definition that resonated with me is that luxury is white space on my calendar.

Born and raised in SoCal. Went to school in North Carolina (Go Devils!). Moved to Phoenix for Teach for America. Co-founded AFAR Media and busy building a global travel brand for global citizens