Voice of Luxury: LHW chief executive talks travel trends and trade strategy
Shannon Knapp says Leading Hotels of the World enjoyed ’another fantastic year’ in 2024
Q. How was 2024 for LHW and its members?
We had another fantastic year – our third straight year of record revenue growth. It was also successful in terms of bringing new members into the community, as we added 35 hotels in some great destinations. Looking at the LHW business overall, we grew 13% year on year. Both our travel trade and retail business was very strong, and we also saw growth on an average daily rate level of about 3%. But the real growth has come from volume, and in 2024 we were up 9% on room nights and 8% on reservations. Year-on[1]year growth over the past few years has been 13%, 25% and 76%. When we compare against 2019, we are up nearly 60%.
Q. Which destinations performed strongly in 2024?
A large proportion of our business is US travellers so the key destinations continue to be Italy, France and Spain. The US is also an important destination in its own right. We saw a notable trend for ‘coldcations’, with more people travelling to northern Europe. And we’ve seen a big increase in Alpine destinations, with Austria up nearly 40% and Switzerland up 10% year-on-year.
Q. Are your competitors other hotels or luxury goods?
[Strategy and management consulting firm] Mckinsey & Company recently presented at our annual convention on luxury consumer trends and a chart they showed comparing the consumption of luxury goods and luxury experiences illustrated that the gap is widening in favour of luxury experiences – and the delta is getting bigger. People are choosing to invest in luxury experiences including travel, and they are making that trade-off – although, in reality, in this segment many don’t have to make that trade-off. But if they have to choose, they are choosing travel over things. We see that at LHW, because our guests are curious about the world; travel is not what our guests do, it’s who they are.
Q. How do you bring in new hotels to the collection?
It’s a threefold approach. The first is through existing members that open new hotels – that, to me, is the greatest show of confidence and trust. The second way is through enquiries and we receive in excess of 650 enquiries a year passively from all over the world. The third way is that we have a proactive team looking at key markets and these will be markets where we believe there is significant unmet demand for our travellers and where we don’t have a large enough footprint. A great example is that we’re trying to grow our footprint in the US. If a significant part of our business is US travellers, we know a huge amount of their travel wallet is spent domestically or regionally, so that’s a big area of focus. We’re also looking more at Asia and specifically China and India, the latter of which is going to be a huge growth driver in the future.
Q. Do you see your loyal customers actively wanting to tick off new additions to the LHW portfolio?
I can speak anecdotally on that. When I talk to loyal guests, I can see that many of them are eager to see and experience new hotels that we add to the collection. Because of this, we created a marketing communication to send to Leaders Club members, which is all around the ‘first look’ of the new hotels joining us and it was incredibly popular. As our members are seeking a new experience, they love getting the first-look emails.
Q. Tell us about your trade strategy.
The trade is incredibly important to us. It is a huge contributor to the success of our business and will continue to be vital to our strategy. We’re investing in tools and capabilities to help our travel advisors thrive, and to make it easier for them to work with us. At a time when some brands are trying to build their own direct business, we are committed to collaboration and partnership, and making our travel advisor partners as successful as possible. We just piloted what we’re calling the Leading Advisory Member as a way for us to see what partners are booking and how we can help, recognise and reward them. We are looking at better ways to reward and incentivise at an individual level. We already do it at an agency level, but we want to do it at an agent level – and we want to ensure we offer incentives and rewards that help the travel advisor be the hero for their guests. We will use that data to create a loyalty programme for the trade and we will be doing a lot of testing this year to look at the right combination of benefits and what lands best with our advisor partners.
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