The Deep Dive: “If Your Product Is Not Well-Positioned For Your Specific Markets, You Will Struggle.”


Limei Hoang | December 13, 2021

Credit: Photo by Asad Photo Maldives from Pexels.

Brands must be aligned towards their clients’ expectations in order to succeed in luxury’s new normal, says Alexander Manz, Director of Business Development at ASMALLWORLD Hospitality, and position themselves in a clear and distinct way towards their specific niche audiences or risk falling behind the industry’s younger and more digitally savvy competitors.

Welcome back to The Deep Dive, a new series from Luxury Society that takes an in-depth look at the big issues and topics affecting the luxury market, and how the industry has responded to them. Through a series of interviews, exclusive data, and market analysis, we hope to provide a comprehensive view of each topic explored, adding to the wider discussions with our own expertise and that of others in the industry.

The second part of our report is a series of interviews with leading experts in different segments of the luxury industry such as Travel and Hospitality, Automotive, Media and Advertising and Health and Wellness, each taking a deep dive into the current state of the luxury industry today and where each category is headed. We aim to give our readers a deeper understanding and insight into the trends happening in the market through their eyes.

Our fifth interview in part two of The Deep Dive features Alexander Manz, Director of Business Development at ASMALLWORLD Hospitality, who speaks about why luxury brands must position themselves to niche audiences, his outlook on the market and the rise of ultra-exclusivity within luxury travel.

Of all the different sectors within luxury that have been affected by the global COVID-19 pandemic, travel has most likely been the hardest hit. When international borders closed during the first half of 2020 and global travel restrictions were put in place - the hospitality industry ground to a halt. Occupancy rates fell dramatically and hopes of filling hotels with flocks of affluent international tourists grew dimmer as months of uncertainty passed by.

But for Manz, whose hospitality business forms a part of the ultra-exclusive lifestyle and luxury travel social network ASMALLWORLD, and who provides consulting services for the development and management of luxury hotels and resorts globally, the pandemic gave the travel and hospitality sector the opportunity to stop and reassess what changes needed to be addressed so that when travel restrictions did ease, it would be ready to move forward and operate in what is now, the new normal.

“What the pandemic did, and probably what any crisis or big disruption does is just accelerate existing patterns in the world,” said Manz. “It shifted us towards new values, trends and behavioural patterns which were already there pre-COVID, but are now growing in popularity. One of the values that is becoming more important is well-being, for instance, another is the trend of shifting demographics; who is driving the market, making the decisions and has the money to spend.”

Indeed, those who are driving the market are the same ones forcing it to change, shifting it towards more digital-based concepts like hyper-segmentation of audiences, meaning that brands must embrace the capabilities that a digital toolbox allows them to have and position themselves towards their specific niche audiences that are interested in their offering.

More simply put, it’s about knowing who your specific customer is, their likes and dislikes, what kind of holiday or accommodations they like to stay in, what kind of facilities and activities they want on offer, and channelling your marketing efforts towards reaching those exact customers.

“It's becoming easier and easier to read the data,” said Manz. “I'm seeing a huge growth in demand for personalisation, that will at the same time play a significant role in the future. Fifty years ago, a luxury hotel could position itself as a very nice four-star property, with a good price. But today, there are 100 different ways you can position yourself. There are so many new niche markets and in each niche market, you have your customer groups that are in demand.”

“Nowadays, to be a brand means you need to have a very clear concept positioning towards the client, in which everything is aligned,” he added. “If you don't have this, you will have issues. So, you have a lot of possibilities in this market, but you need to be aligned in every field. If you do it correctly and position your offering towards the right kinds of audiences, you will see a huge demand.”

The Ritz Carlton Hotel De La Paix in Geneva.Credit: Courtesy.

It’s a method that clearly works. In August and September, one of the hotel properties within Manz’s family portfolio - the Ritz Carlton Hôtel de la Paix in Geneva - returned to 90 to 95 per cent occupancy levels, similar to those previously seen in 2019 before the start of the pandemic.

But demand is something that remains a delicate balance in luxury travel as many countries still have restrictions in place. The United States only opened its borders to fully vaccinated travellers on November 8, after nearly 20 months of closure. Most European countries are open for vaccinated visitors and for those with a negative PCR test, but EU member countries are free to impose their own restrictions. And some countries in Asia, like India, Thailand and Cambodia are allowing vaccinated travellers to enter without having to quarantine. China still remains off-limits for inbound and outbound tourism. The emergence of the Omicron variant announced in late November, is a stark reminder of just how delicate that balance is.

Without the demand from international travellers, who previously were willing to travel far and wide to far-flung destinations, the outlook for the industry still remains uncertain, at least in the short term.

“Hospitality is an international business, so we need flight capacities and we need people to travel again,” said Manz. “There is intrinsically a strong demand for travel, especially for leisure and family vacations.”

Looking forward, Manz remains optimistic about the luxury market and the rebound that it is experiencing particularly in the higher end where he operates. “In general terms, I'm very optimistic about luxury, especially, I would say ultra-luxury , because we have a world where central banks are printing money to create inflation and support global economies, making the wealthy, even wealthier.”

More wealth means more disposable income to spend on leisurely activities and Manz believes this will help push demand for trends like the rise of ultra-exclusivity within travel and hospitality, something he believes the industry will see more of in the future.

“We are seeing a rise in the diversification of flight choice, for example,” he said. “Companies are now providing aeroplanes as private planes for families to travel more safely during the pandemic, and this demand is helping to drive the pricing down. This is the next big step in luxury and there will be a huge demand for these kinds of services in the next 15 years. The lower costs are already happening, and I see transatlantic flights becoming very cheap as a result.”

“Exclusive products will be on the rise, and average product will die,” he added. “People don't want average products. Exclusive doesn’t have to be a luxury product, it can be something like an exclusive milk in the supermarket but as long as enough people want an exclusive product, the demand will be there for it."

Interview | Special Report | The Deep Dive