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Journal of Revenue and Pricing Management

, Volume 17, Issue 4, pp 231–243 | Cite as

Luxury accommodation – significantly different or just more expensive?

  • Tracy Harkison
  • Nigel Hemmington
  • Kenneth F. Hyde
Research Article

Abstract

Luxury accommodation is a growing sector in the hospitality industry, but what really sets it apart from standard accommodation? This paper considers what luxury accommodation is by first investigating how luxury accommodation is able to command a premium price, and then identifying the differences in customers’ luxury experiences between luxury hotels and luxury lodges. The paper uses qualitative data drawn from a larger study that examined six luxury properties in New Zealand, interviewing 81 participants during their luxury accommodation experience – 27 managers, 27 employees and 27 guests. The research findings indicate that properties can command a premium price if their facilities and amenities are of the highest quality, if their staff have high levels of interaction and engagement with guests, and if they present a ‘wow factor’ while still making their guests feel ‘at home’. The luxury accommodation experience is found to be significantly different from standard accommodation experiences. Within the luxury sector, a distinct difference exists in the luxury accommodation experience at lodges versus hotels. Properties need to demonstrate to guests why they demand a premium price, by providing value for this money.

Keywords

luxury hotel lodge New Zealand 

Introduction

As part of a larger study on the luxury accommodation experience in New Zealand, the question is raised whether luxury accommodation is significantly different from standard accommodation or merely more expensive. In recent times, consumers have become more demanding, and more self-indulgent and hedonistic (Hirschman and Holbrook, 1982; Van Boven and Gilovich, 2003). To accommodate this shift in consumer tastes, the global hospitality industry has moved from being product-focused to being more experience-focused (Knutson et al, 2006). The luxury accommodation sector has embraced the guest’s desire for experiences by promoting the idea that by staying with them the guest won’t just enjoy fine accommodation, but that they will have a ‘luxury experience’ (Harkison, 2016). It has been suggested that luxury accommodation defines itself through its facilities, its additional staff and other elements (Harkison, 2016). This paper identifies the elements that make luxury accommodation luxurious, what sets it apart from standard accommodation and results in it being able to attract a premium price. Yet the elements that enable luxury accommodation to be luxurious cost the establishments money, and hence the reason to question whether luxury accommodation is different or merely more expensive. Additionally, within the luxury accommodation sector, there are different types of luxury properties, including luxury hotels and luxury lodges. Both types of accommodation were examined in this study of New Zealand luxury lodges and five-star hotels. The study sought to identify any differences in customer experiences between these two types of luxury accommodation.

Literature Review

Luxury is an elusive construct, yet there is some agreement amongst scholars on the key characteristics of luxury: recognition by others of extra value, a strong connection to status, high quality and very limited supply (Vigneron and Johnson, 2004; Mortelmans, 2005). Luxury is psychologically associated with premium pricing: that is, the practice of inflating the price of a service or product to enhance buyers’ favourable perceptions of the offering (Allsopp, 2005; Yeoman and McMahon-Beattie, 2006). Luxury hotels were traditionally renowned for their prime locations, large size, high-quality food, cleanliness, tasteful aesthetics, and the provision of guests with privacy, security, and highly customised services (Sherman, 2007; Kucukusta et al, 2014). And although there is no universally agreed definition of ‘luxury hotel’, there is an implication that a luxury hotel’s accommodation will be of a high standard, that there will be 24 hour room service, fine dining, business facilities, valet parking and staff who are highly trained (Davidson et al, 2006; Kucukusta et al, 2014). A possible reason for there not being a universally agreed definition of luxury hotels is that additional luxury services have been added to lower grade hotels, thus leading to some confusion in the market (Milburn and Hill, 2007). Another reason for not having a clear definition of luxury hotels is the overuse of the term ‘luxury’, a concern that has been verbalised by various representatives of the industry (Greenwood, 2007; Kerr, 2007).

There remains a commonly held belief amongst consumers that a high price is indicative of quality (Allsopp, 2005). For this reason, a premium pricing strategy is used by luxury brands to present a quality image. But in order for luxury brands to deliver on a quality image, they must also create extrinsic and intrinsic value for their customers (Keller, 2009). Concepts and attributes linking premium pricing and luxury can also be linked to the introduction of new categories of accommodation – operators have developed their own self-styled luxury products with their own definitions (Milburn and Hill, 2007). For example, in France, the category of ‘palace’ has been introduced: the object of creating this category was to highlight establishments as offering something unique due to their excellence and perfection, luxury, history and timelessness (Paris Convention and Visitors Bureau, 2010). Similarly, Qualmark in New Zealand introduced a new category in 2013 – the New Zealand Luxury Lodge. Luxury lodges were previously categorised under the Exclusive accommodation category (Qualmark, 2012).

Customers’ expectations of luxury have also changed due to other luxury experiences they have had: the more luxury experiences a customer engages in, the more emotional and productive their evaluation of subsequent experiences becomes (Johnson et al, 2009). The hospitality industry has had to constantly challenge and update itself in order to create luxury experiences that meet their guests’ evolving expectations. Customer experience management encourages businesses to focus on optimising customer experiences (Morgan, 2013). By focusing on the managing of these customer experiences businesses gain a source of differentiation and competitive advantage (Rahman, 2006). Customer experience management is a business strategy that can thus result in a win–win exchange of value between customers and a business (Grewal et al, 2009). Kiessling et al. (2009) provide examples of what hotels are doing in order to provide their guests with a luxury experience, including offering cooking classes with celebrity chefs and providing private shopping with personal shoppers.

What constitutes ‘luxury’ is now being defined by guests’ expectations and previous experiences (Gumbel and Levenson, 2007; Milburn and Hill, 2007). Hotel firms, specifically upscale or luxury hotels, are providing strong emotional experiences for their guests, and these guests are willing to pay more for this added value (Barsky and Nash, 2002; Han and Back, 2007). The traditional hospitality service of offering board and lodging has now become purposefully encased in engaging experiences to create events that are memorable (Bharwani and Jauhari, 2013). A number of hotels are channelling their efforts to provide holistic experiential service offerings that connect with guests individually on an emotional and personal level to create memorable experiences (Bharwani and Jauhari, 2013). It has been suggested that luxury hotels need to maintain a high staff-to-guest ratio to ensure that they can continue a high degree of interpersonal customer contact in what is seen as an opulent environment (Brien et al, 2012). Luxury brands reinforce their value with quality cues that are well-chosen, for example with personalised customer service (Keller, 2009). Sandström et al (2008) suggest that the service encounter is central to the customer experience, so it is the service employee who has the greatest potential to influence the value-creating experience through their interaction with the customer.

As Vickers and Renand (2003:460) state, “Invariably many organisations have attempted to increase the level of added value to their product position by using the title of ‘luxury’, or have specifically chosen to position their products in the luxury goods niche”. In order to produce this value, “value is now centred in the experiences of consumers” (Prahalad and Ramaswamy, 2004:137). Both the intangible characteristics of the hotel industry (e.g. if the hotel has a fantastic view, this should be mentioned at check-in, and hoteliers should endeavour to upgrade guest rooms to ones with views whenever possible) and the tangible characteristics (e.g. the hotel rooms need to be well maintained, in pristine condition and thoroughly cleaned at all times) play an important role in enhancing the guest’s overall experience (Khoo-Lattimore and Ekiz, 2014).

This literature review has explored luxury accommodation, premium pricing, customer experience management and value in order to determine whether luxury accommodation is significantly different from standard accommodation or just more expensive. Extant literature shows that luxury accommodation is difficult to precisely identify, with confusion in the marketplace due to self-styled luxury properties and evolving consumer expectations regarding luxury. Whether luxury accommodation is different or merely more expensive has yet to be researched.

Methodology

This paper uses qualitative data that are drawn from a larger study utilising a multiple case study approach framed by an interpretivist paradigm. The larger study that the data are obtained from sought to gain a variety of perspectives on the luxury accommodation experience. The population of luxury properties, from which the study sample was selected, was determined by using the Qualmark New Zealand categories of Luxury Lodges and Five-Star Hotels. Purposive sampling was used in order to select a sample of properties on the basis of specified characteristic(s) (that is, that they were part of the Qualmark Luxury and Five-Star categories), and thus able to inform an understanding of the central phenomenon (Creswell, 2007; Brotherton, 2008). In practice, the sample for the study depended on the willingness of the properties to participate. Three luxury hotels and three luxury lodges took part in the study. A profile of these properties is shown in Table 1.
Table 1

The case study properties

Case

Property location

Qualmark rating

Number of rooms

Number of guests

Number of staff

Tariff (NZD)

Lodge A

Rural

Luxury lodge

20

52

60

$695–4620 per person

$1205–4875 per night

Lodge B

Near large city

Luxury lodge

7

14

14

$850–2050 single

$1100–2350 double

Lodge C

Rural

Luxury lodge

13

26

40

$891–3133 single

$1150–3292 double

Hotel A

Town

5 star

60

120

60

$325–1050 per night

Hotel B

Town

5 star

318

636

200

$450–1250 per night

Hotel C

City centre

5 star

340

680

240

$425–1500 per night

Qualitative methodology was used as qualitative research focuses on emotions and experiences: it is probing in nature in order to encourage participants to introduce concepts of importance from their perspective (Altinay and Paraskevas, 2008). A case study approach was the most relevant as it is useful in newer and less developed research areas, particularly where the examination of the context and the dynamics of the research situation is important (Darke et al, 1998; Marshall and Rossman, 2010). Within case study research, multiple research methods are used and can include observation, interviews and document analysis (Woodside, 2010). The key source of data for this research was qualitative semi-structured interviews as the semi-structured interview style can provide rich and deep data (Creswell, 2007; Brotherton, 2008). The researcher conducted pilot interviews with volunteers from the hospitality industry using a draft interview guide in order to gain insightful comments before going into the field. The findings from the pilot study informed the final set of interview questions (Appendix A).

Data collection and analysis

In total, 81 participants were interviewed in the six luxury properties, comprising three groups that were equal in number: 27 managers, 27 employees and 27 guests. The interviews were fully transcribed ready for analysis. The goal of the qualitative data analysis was to provide a detailed description of each case and the themes within each case: that is, a within-case analysis (Eisenhardt, 1989). This was followed by a thematic analysis across the cases: a cross-case analysis (Eisenhardt, 1989). Both computer-aided qualitative data analysis software and manual analysis were used to take full advantage of both of these methods of investigation. The next stage of the research was thematic analysis which identified patterns or themes within the data (Braun and Clarke, 2006). Thematic analysis was repeated twice: the first set of themes was drawn from each of the three participant groups (managers, employees and guests) for each of the six properties, producing 18 matrices; and the second set of themes was drawn from each participant group by type of property (lodge versus hotel), producing six matrices. All themes arose from the data rather than from extant literature. Within these matrices, several themes emerged, including facilities, staff, the X-factor, value for money and differences between lodges and hotels.

Findings

The following themes emerged from the three different perspectives of managers, employees and guests.

Facilities

The quantity and quality of facilities within the hotels add to the luxury hotel experience; for example, having a spa, and introducing new treatments such as a Whittaker’s (a favourite New Zealand confectionary brand) chocolate scrub and massage. As described by a hotel manager:

A luxury hotel is all about a style of service that goes above and beyond for the guests, providing both facilities and service on a luxury scale. I believe that you should have the highest quality of everything so that you can make guests feel like they mean something and that they are very special. (Hotel Manager U)

Lodge managers recognised that the luxury experience is much more than just a comfortable room, fine fixtures and fittings, or good food, service, top-class amenities and facilities. As explained by one of the lodge managers:

I think that it’s the entire package. And I think each guest will find a different part more important to them, but I think the important thing is that the package is right. Everything about it from the dining to the bedroom to the activities to the facilities to the service. (Lodge Manager Q)

Hotel employees listed the ‘basic’ amenities and facilities that they felt guests would expect luxury hotels to have, including a health and fitness spa, and pointed out that all these basic amenities enable them to create a luxury hotel experience for the guests. Hotel Employee X illustrated this point when saying:

The main thing for a luxury hotel experience for the guest is the staff in the hotel. But also the facilities, the nicely decorated rooms, the food, the bar, the gym, the swimming pool, the spa – and the location – all of this helps us to create the luxury hotel experience. (Hotel Employee X)

Hotel guests wanted those little touches of luxury in their room: for example, a turndown service at night and a view from their bedroom window. Guests expected a place of relaxation, rejuvenation and comfort, attention to detail and excellent facilities, such as superb restaurants. As suggested by a hotel guest:

A luxury hotel makes you feel special and allows you to feel more relaxed due to the facilities and amenities that surround you. (Hotel Guest K)

Staff

Hotel managers felt that, in addition to what is inside the hotel by way of facilities, all staff interactions are important to the luxury hotel experience. Managers saw the experience as a flow of many different elements and touch points – elements that are memorable and happening throughout the stay. As highlighted by the manager of a hotel:

The main thing is when the customer leaves that they feel that they’ve had an experience here – that the experience started from the moment they walked in the door and that we do our best to make their experience based on all of their requests. (Hotel Manager K)

Lodge managers view the guest’s experience as starting with the initial contact, followed by the initial greeting, and continuing until the last goodbye, but they felt that they concentrate on enabling guests to experience the feeling of ‘being in the moment’, and that this involves everything and everyone at the lodge. As illustrated by a lodge manager:

If everyone is not on the same page, the experience that the guests will get won’t be the same. Because there are so many expensive places all over the world you need to have something that will stand out. And people will only remember the staff. I would say making sure that they are happy, and I think that’s where it sort of starts and ends. (Lodge Manager A)

Hotel employees felt that what guests want is friendly, helpful, nice staff who will do as much as they can to make their stay stress-free and easy, while having some personal connection with them. Employees felt that guests want great service, to be able to relax, to know that someone is looking after them, to be treated well and that nothing is a problem. As stated by a hotel employee:

They want full service, nothing to be a problem – do not say no, no matter what they want, you can always work it out. They want people to look after them and make them feel special during their stay. (Hotel Employee J)

Lodge employees knew that they are depended upon to deliver tailored attention to the guests during their stay at the lodges and to ensure that the guests are satisfied with the service. This is illustrated by the following comment from a lodge employee:

As soon as you arrive through those white gates you’re now in our care. If you need anything, want anything, it’s done at the drop of a hat. We have enough staff here to provide any form of assistance. (Lodge Employee G)

Hotel guests expected to receive the pampering that is associated with luxury hotels, be treated to the best of everything, and to have all their desires met by helpful, friendly staff who make them feel special. This is illustrated by the following hotel guest’s comment:

Not having to ask for anything, staff going that extra mile and having an interest in you, and making sure that everything is ok for you. (Hotel Guest W)

The X-factor

Lodge managers discussed a ‘wow factor’ that they want their guests to have, and to facilitate this there are systems in place to make sure that the lodges are always immaculate. Managers explained that guests like the originality, authenticity and the ‘genuine’ feel of the lodges. As illustrated by one lodge manager’s comment:

A luxury lodge is smaller, more intimate. The attraction, whether you’re on business or vacation, if you’re staying at the luxury end of the market, obviously it’s nice to be pampered, looked after, have lovely surroundings, privacy, intimacy, and superior service due to the high ratio of staff. (Lodge Manager S)

Hotel employees saw luxury hotels as places where guests go to be spoiled, pampered and made to feel special, and employees felt that it is important to treat guests as individuals to make them feel like this. This is illustrated by a hotel employee’s comment:

You can’t just do the basic level of work. You’ve got to go over and beyond for the guest. You’ve got to live up to the brand that you are working for too because you help make it be luxury. (Hotel Employee M)

Lodge employees saw the many attractions that the lodges have and why people want to stay at the lodges. One of these attractions is the exclusivity. For example, celebrities know they will be left alone if they stay at the lodges. As illustrated by a lodge employee:

Exclusive, private, high end, limited … (not limited in service), all providing so its luxury accommodation is – I suppose, accommodation where you should want for nothing. (Lodge Employee G)

Having superb food and an outdoor component are also seen as important luxury lodge attributes. Guests noted that when they are having a wonderful experience they want to be able to take some of that experience home with them in order to recreate it in their own home. As highlighted by a lodge guest:

Sort of breaking away from reality but then also hoping to bring something back. I like the idea that already while we’ve been here we found all these things that we wanted to bring into our life. So you sort of crave it, a dining experience like this at home because it’s so magical. (Lodge Guest D)

Value for money

Lodge managers explained that guests are paying a lot of money to stay at the lodges and that they expect value for money. The amount of money that guests spend ensures that managers pay attention to detail, and that they are committed to delivering what the lodge promised –satisfying the guests’ wants and needs by pampering and spoiling them. As explained by a lodge manager:

Guests come here for the intimacy, exclusivity, privacy … the high tariff of course, that is what buys all that sort of thing. (Lodge Manager S)

Lodge employees saw guests wanting to stay in the best accommodation and experience the best local food and wine in the lodge’s luxurious surroundings. Employees felt that luxury is expensive and it attracts a really high-end client base to the luxury hotels. As illustrated by one of the hotel employees:

Luxury is – well it’s about price, obviously the prices are always high, you pay good money for luxury. (Hotel Employee, X)

Lodge employees know that the guests want value for their money as they are spending a vast amount of it on their stay. As explained by a lodge employee:

It’s expensive and, well, you pay your money and you get high class and luxury – guests like the luxury treatment, having lovely food, being able to do what you want and when you want. (Lodge Employee, U)

Guests recognised that opulence comes at a price, and that they would be spending a lot of money, and with that there was an expectation that they would get what they paid for. This is illustrated in the following comment from a hotel guest:

It’s somewhere that has great facilities, a great location, luxury service, and I think that you are paying for the service in a luxury hotel on top of everything else. You are paying for something a bit more. You could stay in a hotel, but the attraction is the luxury, and people are willing to pay for that, and I think that comes in the form of service. (Hotel Guest P)

Lodge guests noted that the lodge is remote and exclusive, and that it gives them privacy and a feeling of being special. They saw that ‘serious’ money had been spent on the lodge and that there is a sense of opulence in and around the lodge. As a lodge guest explains:

Somewhere where you will receive outstanding service, friendly service, somewhere where nothing is too much trouble, somewhere where you know that you will be looked after, and that you relax and just take it easy as someone else is doing all of the hard work for you. (Lodge Guest, S)

Differences between lodges and hotels

Lodge managers were very quick to point out the differences between a lodge and a hotel. They felt that hotels are very good at all of the technical aspects of the guests’ stays but they did not think that a hotel can deliver an overall experience of their property, because it is not their job, and it is not what they are there for. As explained by one lodge manager:

If you go to a five-star city hotel you have a lovely room and you know that the food will be good, the breakfast is this and that. All those bits are all the technical aspects to your stay, and they will be spot on, and you usually pick the brand hotel. What they usually do not deliver is an experience because that’s not their job; that is not what they’re there for. (Lodge Manager B)

Hotel managers felt that the main difference between a lodge and a hotel is finance, and that lodges can offer more of a luxury experience because of the rates that they charge and therefore the financial resources that lodges inject into their operation. As stated by this hotel manager:

So the lodges offer more of a luxury experience, but they charge for it. It’s pretty simple, if you have the money coming in you can have those offerings. (Hotel Manager H)

Lodge employees felt that lodges can focus more on guests’ needs than a hotel, and that guests come back to lodges as they exceed their expectations. As explained by a lodge employee:

A lodge is a lot more – normally smaller of course – comfortable. A guest once told me if they wanted all gold and sparkle tiles there are plenty of hotels around the world they can go to. But the lodge just gives that home away from home feeling, which they preferred, also the added care and attention to detail. (Lodge Employee B)

Lodge guests compared the staff of the lodges with the staff of hotels, suggesting that lodge staff are better at making them feel at home, give them more personalised service, and are more professional in their manner. As explained by a lodge guest:

The calibre of staff too. When you get to a luxury facility you expect it to be perfect. The calibre of staff is dramatically different than in a normal hotel and much more personal attention. (Lodge Guest D)

Discussion

Facilities

In the late 1980s, Bell (1989) suggested that because of the highly competitive market, mid-priced and luxury-level accommodation operators thought that it was essential to add more and more amenities to their rooms to satisfy their customers (e.g. well-known brand soaps, shampoos, conditioners and hand/body lotions). Eleven years later, Kandampully and Suhartanto (2000) highlighted that these amenities were no longer considered luxury by guests, and that the use of hotel facilities such as bars, restaurants and nightclubs was also no longer seen as luxury – for many people, these services had become an integral component of their lifestyle. This finding is now 17 years old, and yet it is clear that the hotel guests interviewed for this study still expect to have a certain quantity and quality of amenities and facilities in a luxury hotel in order to view it as a luxury hotel. Lodge guests are aware that the lodges want to give them a ‘homely feel’ while they are staying at the lodge, and guests did indeed feel they had a ‘home away from home’ experience. Guests feel that luxury lodges are places to stay in order to celebrate a special occasion, relax and experience decadence, and that the lodges have an intimate feel, are warm and comfortable, and have the best of everything.

Staff

Prahalad and Ramaswamy (2000) suggest that companies have to recognise that the customer is now becoming a partner in creating value and that they have to learn how to harness customers’ competencies. One aspect of this is engaging customers in co-creating personal experiences (Rowley et al, 2007), but in order for organisations to co-create unique customer experiences, they must first co-create an empowered employee experience ‘inside’ the actual organisation (Ramaswamy, 2009). Hotel employees recognise the importance of interaction amongst themselves, guests, managers and other organisations outside of the property. For example, one set of employees highlighted a recent visit to a vineyard that enabled them to talk much more confidently about those wines to their guests. Lodge employees see interaction as being everyone’s job: it can make or break a guest experience, and it only takes one bad interaction to ruin the experience. Binkhorst and Den Dekker (2009) suggest that there is a strong belief that co-creation is so important that it will increase value for human beings in the experience economy. Both lodge and hotel employees realise that in order for their properties to be deemed luxury they must go above and beyond their guests’ expectations, and that requires a high staff-to-guest ratio.

The X-factor

O’Neill (2004) suggested that luxury hotel brand values are changing, and the only way he could explain the difference between standard and luxury hotels was by providing a retail comparison: “Luxury hotels are about as different from the average hotel as a Prada bag is from a duffel bag” (2004:30). Hotel managers show they agreed with this comparison by also comparing themselves to luxury goods, suggesting that if guests like ‘premium’ motoring, they buy a luxury car, and if they want to stay in a ‘premium’ place for an experience, they would stay in a luxury hotel. Thus, luxury properties should have that ‘X-factor’.

Luxury hotels are part of the ‘experience economy’ (Johnston, 1999; Gilmore and Pine, 2002; Tosti, 2009), and this experience is delivered by employees as part of their relationship with each other and with guests (Brien et al, 2012). Hotel employees see it as part of their job to produce an experience for the guests, believing that the luxury hotel experience starts the minute the guests arrive and lasts until the minute they leave. All employees see outstanding service as being the first thing that guests want in the luxury hotel and lodge experience – guests want to receive amazing service and know that it will be consistently of a high standard. Employees also believe that guests should feel as if they are individuals and should receive personal service from staff, being welcomed by name and having employees focus on them, especially if any problem occurs. Lodge employees also feel that the lodge should have a more intimate and homely feel to it, and are very aware of their role because the managers or manager-owners are very clear as to what the philosophy is at the lodges – that it is their responsibility to make sure that guests have the best experience possible.

Monetary value

Nueno and Quelch (1998) state that, throughout the centuries, the concept of rarity and scarcity has always been associated with luxury. Luxury has also been associated with status, quality and exclusivity (Atwal and Williams, 2009). Scholars agree there are several key components or characteristics of luxury: there is recognition by others of its extra value; it has a strong connotation of status and high quality; and it is in very limited supply (Vigneron and Johnson, 2004; Mortelmans, 2005). Although luxury is seen as more than just spending money, it does involve a monetary aspect. Hotel managers recognise that luxury requires a lot of investment by the hotel’s owners; luxury accommodation is only for those guests who can afford luxury, and their lodges are expensive and in the high end of the market. Guests pointed out that it takes money to produce a luxury experience and with luxury you know it is going to be expensive. They also explained that they are a generation that are spoilt and craving more and more experiences (e.g. wanting to stay in nice places such as luxury lodges), and are prepared to pay to have those experiences.

Yet it takes more than money to produce luxury. Several of the managers interviewed suggested that some properties want to spend excessively to have more staff, more marble, more gold taps, and so on, but all that achieves is an expensive experience as opposed to creating a luxury experience. A luxury experience is seen as something out of the ordinary, enveloping the guest, engaging their senses in order for them to embrace something unique. Managers view the guest’s experience as being ‘in the moment’ starting with the initial contact, followed by the initial greeting, and continuing until the last goodbye.

Differences between lodges and hotels

Luxury hotels with several hundred bedrooms concentrate on the presentation of the physical environment, whereas small boutique hotels also focus on social interaction dimensions (Cetin and Dincer, 2014). Managers, employees and guests in the lodges are quick to point out that there are differences between lodges and hotels. One major difference that is highlighted is the size of the lodges – all three participant groups believe that lodges are a lot smaller than hotels, and generally do not have any more than 20 bedrooms and suites in order to maintain an intimate feel. While lodges make their guests feel at home, guests question how hotels can do the same. By contrast, hotel managers considered the main difference was related to the larger amount of money lodges spend on accommodating guests compared with hotels, in that the extra money enables the owners of the lodges to offer guests a lot more in the way of experiences.

Previous studies highlight further contributing factors that have significant and positive impacts on the tourist’s experience, and these are convenient parking, exterior aesthetics and interior décor, the value of the food in the restaurant, and courteous and prompt service (Poon and Low, 2005; Walls, 2013). One of the main differences between the lodges and hotels relates to the food aspect, as what guests eat at the lodges is decided for them, and is described by them as a ‘meal experience’ not to be missed. By contrast, hotel guests have to pay extra for food, and therefore decide whether they want to eat at the luxury hotel or not – but the consensus from guests was that luxury hotels must be able to provide a variety of diverse foods to accommodate the guests who choose to eat at the hotel.

Conclusion

Managers and employees knew that guests were paying a lot of money to stay at luxury properties and they knew that the guests expected value for this money. The amount of money that guests spent ensured that managers had an attention to detail, and that they were committed to delivering what the properties promised – privacy, exclusivity and opulence. They were able to give their guests value by creating unforgettable experiences. Guests themselves pointed out that it takes money to produce a luxury experience and that luxury comes at a price. They knew they would be spending a lot of money, and with that they had an expectation that they would get what they paid for.

The findings show that one of the key aspects of the luxury accommodation experience is a high staff-to-guest ratio that enables the property to give their guests a high degree of interpersonal contact. Lodge managers and employees stated they need to work closely with each other in order to deliver the service to the guest, and they feel that, as they have a high staff-to-guest ratio compared with hotels, they can offer a more personalised service. The X-factor includes all the foundation aspects of the properties, including the exceptional standards that are the point of difference between an ordinary hotel or lodge and a luxury hotel or lodge.

Within the luxury accommodation sector, it can be said that there is a difference between a luxury hotel and a luxury lodge. Luxury hotels are all about meeting exacting standards consistently and conspicuous consumption, while luxury lodges are about location, ethos and a sense of sanctuary for the very wealthy. It can also be said that luxury hotels and luxury lodges are significantly different from standard accommodation due to the level of facilities and amenities, the number and skill level of the staff they employ and the X-factor that these properties possess.

The research has a number of managerial implications. Properties in the luxury accommodation sector need to know their point of difference and use this as a competitive advantage – managers need to identify what makes their property different, then highlight and emphasise this to potential and existing guests. Properties need to ‘set the stage’ for guests, as this is the foundation that enables managers and employees to create the luxury hotel or lodge experience. Setting the stage is accomplished by making sure that all the tangible and intangible aspects of the hotel or lodge are present and correct for each and every guest. Properties may need to devise checklists to facilitate this.

Properties need to focus on selecting, training and retaining managers and employees who are able to create and execute a successful luxury hotel or lodge experience. This may involve re-evaluating the selection, training and retention policies that hotels and lodges currently have in place. Managers and management teams need to clearly explain to employees what is expected of them in order to execute a luxury hotel or lodge experience correctly, and this may involve producing a written blueprint that will guide them.

Properties need to encourage more co-creation between the participating groups, and may need to investigate the different forms in which this co-creation takes place at the properties. Co-creation can happen between two or more of the participant groups (managers, employees and guests), and can also happen with people outside of the hotel or lodge, such as tour guides and retail staff. Encouraging more co-creation to take place can have a positive effect on the luxury hotel and lodge experience – for example, encouraging staff to visit producers of local products and wine will enable them to talk informatively to the guests about these topics. Having dedicated staff members interacting with guests throughout their stay will help to ensure engagement between guests and staff, which will enable them to create a luxury hotel or lodge experience. And properties need to continually improve the luxury hotel or lodge experience by comparing their own property to domestic and international benchmark properties.

This paper has sought to provide the hospitality industry and hospitality managers with insight into the importance of understanding that luxury accommodation is significantly different from standard accommodation in ways other than just being more expensive. Guests must receive value for money from their luxury accommodation experience if a premium price is to be willingly paid.

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Copyright information

© Macmillan Publishers Ltd., part of Springer Nature 2017

Authors and Affiliations

  • Tracy Harkison
    • 1
  • Nigel Hemmington
    • 1
  • Kenneth F. Hyde
    • 2
  1. 1.School of Hospitality and TourismAuckland University of TechnologyAucklandNew Zealand
  2. 2.Business SchoolAuckland University of TechnologyAucklandNew Zealand

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