Lifestyle hotels are currently the fastest-growing sector in the global hospitality industry, blending boutique intimacy with the operational scale of major brands. Demand is being driven by post-pandemic consumer preference for experiential travel featuring authentic cultural immersion, unique and striking designs, and community-focused spaces.
In Asia Pacific, lifestyle brands are still under penetrated despite recent rapid growth. However, this is set to change as upcoming supply in the segment continues to outpace the market average and the category increasingly enters lower-tier chain scales.
Gen Zs are increasingly opting for lifestyle hotels as the category appeals to their taste for experiential travel, authentic local culture, and seamless technology over standardised midscale offerings or formal luxury. Gen Zs are already the region’s largest demographic cohort, and are set to exert an increasing influence over the regional hotels market as their spending power increases; a trend that will drive further growth in the lifestyle segment.
While rising construction costs continue to pose a barrier to new hotel development, including in the lifestyle segment, CBRE believes conversions offer a viable and capital-efficient alternative for potential investors, either through soft brands or physical conversions through core lifestyle brands.
CBRE believes smaller independent assets can provide attractive value add and opportunistic plays for conversion to lifestyle brands. With more hotel groups expanding their lifestyle brands to lower chain scales, conversions can be performed with more flexibility and according to how much CapEx investors want to allocate.
Lifestyle hotels are among the fastest-growing segments in hospitality, but remain meaningfully under penetrated across Asia Pacific. With Gen Z representing the region’s largest demographic cohort and increasingly valuing culture, design and seamless technology, the segment is well positioned for sustained growth as their spending power rises.
Ananth RamchandranHead of Advisory & Strategic Transactions, Hotels & Hospitality, Asia, CBRE
