The New Power of Experiences: Why Luxury Hotels Are Gaining Ground on Handbags and Fashion

The global luxury industry is undergoing a transformation that could fundamentally reshape the balance of power among its leading players. While some of the world’s most prestigious fashion and leather goods houses face a slowdown in consumer demand, luxury hospitality, exclusive travel and extraordinary experiences are capturing an increasingly important share of affluent consumers’ attention and spending. Financial data from 2026 reveal a striking divergence that is already influencing stock market valuations, investment decisions and the expansion strategies of major international groups. Luxury is not disappearing. It is moving into a new arena.

For decades, the international luxury landscape was dominated by extraordinary objects. A Hermès handbag, a Louis Vuitton creation, a highly complicated timepiece or an exceptional piece of jewellery represented far more than a purchase. These objects embodied status, identity, wealth and membership of an exclusive world. Europe’s great luxury houses built global empires on their ability to transform physical products into objects of desire, combining heritage, craftsmanship, creativity and carefully controlled distribution.

Something, however, is changing in the way affluent consumers choose to spend their money. A private stay at an extraordinary resort, a journey designed exclusively for a family, an expedition aboard a luxury yacht or an unforgettable gastronomic experience can compete directly with the purchase of a fashion item costing several thousand euros. Consumers have not necessarily stopped appreciating exceptional products, but they now have more ways to express their financial position and enjoy their wealth.

This transformation is not simply generational. It also reflects changing personal priorities, saturation in certain luxury goods categories, substantial price increases across leading fashion houses and a growing appreciation of time, privacy and shared experiences. Luxury is increasingly being measured not only by what people own, but also by what they can access and the experiences they are able to enjoy.

A Historic Divergence Between Hotel Groups and Luxury Conglomerates

On November 11, 2026, Reuters Breakingviews published an analysis that quantified this transformation. Between the end of 2025 and November 10, 2026, shares in Marriott International, Hilton Worldwide, Hyatt Hotels, Accor and InterContinental Hotels Group had risen by an average of 25%. Over the same period, shares in LVMH, Hermès and Kering had fallen by an average of 37%.

The contrast is remarkable because it reflects two very different assessments of the growth prospects of businesses that compete, at least in part, for the spending power of the same affluent consumers. While investors remain concerned about demand for expensive handbags, fashion and other luxury products, hotel operators are benefiting from more favourable growth expectations, particularly within their premium and luxury divisions.

According to Morgan Stanley estimates cited by Reuters, earnings per share at five major hotel groups could grow by approximately 20% annually between 2025 and 2028, roughly twice the expected rate for major luxury goods companies. These figures represent analysts’ forecasts rather than guaranteed outcomes, but they help explain why financial markets are beginning to value the two industries differently.

For years, leading fashion houses commanded higher stock market valuations than hotel companies, supported by strong margins, exceptional brand equity and powerful business models. Recent developments suggest that part of this valuation premium may be shifting towards businesses capable of monetising the expansion of high-end tourism and exclusive experiences.

This does not mean that hotels have replaced fashion as the dominant expression of luxury. It means investors increasingly recognise hospitality as a potential growth engine at a time when certain traditional luxury categories are struggling to regain momentum.

A Luxury Experiences Market Worth Hundreds of Billions

The economic scale of this shift is considerable. Morgan Stanley estimates that luxury hotels generate approximately $200 billion in annual revenue. When fine dining, cruises and other high-end experiences are included, the market reaches around $415 billion, slightly exceeding the approximately $408 billion spent on personal luxury goods in the comparison reported by Reuters.

These figures should be interpreted with methodological differences in mind. Market estimates do not always apply identical category definitions, exchange rates or measurement criteria. Nevertheless, they demonstrate that the luxury experience economy has reached a scale comparable to that of the physical products traditionally associated with the industry.

The Bain-Altagamma study published in June 2026 reinforces this assessment. According to its estimates, global luxury spending reached €1.443 trillion in 2025, while personal luxury goods accounted for €358 billion, representing a 2% decline at current exchange rates. For 2026, Bain projected a recovery of between 2% and 4%, bringing the market to approximately €365 billion–€373 billion.

The anticipated recovery in personal luxury goods demonstrates that this category is far from disappearing. However, Bain also identifies stronger momentum in experiences than in tangible products. Savills, drawing on Bain-Altagamma estimates, reports that luxury experiences, including hospitality, cruises, travel and fine dining, grew by 3% in 2025 to approximately €260 billion.

The conclusion is clear: luxury growth is no longer distributed evenly across the industry. Traditional products remain enormously important, but services and experiences are capturing an increasingly valuable share of the market.

Luxury Hotels Are Becoming Central to the New Economy of Prestige

Major hotel operators understand that high-end consumers are no longer looking merely for larger rooms, prestigious addresses or exceptional facilities. They are seeking complete experiences that combine privacy, personal recognition, comfort, authenticity and access to services that are difficult to obtain elsewhere.

This evolution is driving investment in premium hotel brands, exclusive resorts, branded residences and new concepts combining accommodation, gastronomy, wellness and highly personalised experiences.

Operating performance supports this trend, although results vary considerably between markets and companies. According to Reuters’ November 2026 analysis, luxury hotel revenue per available room in the United States and Europe had increased by 8% during the year, compared with 2% first-half sales growth among major publicly listed luxury goods companies. The two indicators are not directly equivalent, but they illustrate the difference in momentum between the sectors.

A Colliers report examining the US hotel market also identified particularly strong performance among upper-tier properties during the first half of 2026. In June, the luxury segment recorded year-on-year revenue per available room growth of 13.3%, partly supported by the FIFA World Cup. Brands including Kimpton Hotels, LXR Hotels & Resorts, The Unbound Collection by Hyatt and W Hotels stood out for their performance.

Luxury hospitality is demonstrating its ability to grow through a combination of premium pricing, differentiated experiences, customer loyalty and international expansion. Nevertheless, performance remains uneven, with geopolitical tensions, economic conditions and destination-specific factors continuing to influence results.

Marriott, Hilton and Accor Accelerate Their Expansion into Premium Hospitality

The growing interest of major hotel operators in luxury is not merely conceptual. It is reflected in investment plans, development pipelines and brand strategies.

Marriott International reported a worldwide development pipeline of approximately 629,000 rooms across nearly 4,200 properties at the end of June 2026, covering multiple market segments. Its luxury portfolio included 696 properties and approximately 172,000 rooms, including the accommodation categories and formats the company classifies within its luxury segment.

Marriott’s competitive strength lies in its ability to operate distinctive brands such as The Ritz-Carlton, St. Regis, JW Marriott, W Hotels and The Luxury Collection, combining international recognition with propositions designed for different customer profiles.

Hilton is also reinforcing its position in the upper tiers of hospitality through brands including Waldorf Astoria, Conrad, LXR and NoMad. According to Morgan Stanley estimates reported by Reuters, Hilton’s luxury development pipeline represented approximately 91% of its existing luxury room capacity, illustrating the scale of its expansion ambitions, although not every project is guaranteed to open within its anticipated timetable.

Accor, meanwhile, maintains a strong presence in luxury and lifestyle hospitality. During the first half of 2026, recurring EBITDA in its Luxury & Lifestyle division increased by 8.5% at constant exchange rates. Its global development pipeline exceeded 268,000 rooms at the end of June, encompassing properties across different market categories.

These strategies demonstrate that major operators no longer regard luxury as a marginal addition to their businesses. They increasingly view it as an important source of growth, differentiation and long-term value creation.

Why Wealthy Consumers Are Prioritising Experiences

The explanation extends far beyond a preference for travel. It concerns how consumers value their time, create memories and seek experiences that cannot easily be replicated.

A luxury product may be purchased in a boutique in Paris, New York, Dubai or Shanghai. Even when availability is restricted, it remains an object that other consumers may eventually acquire. An extraordinary experience, by contrast, may depend on an unrepeatable combination of location, timing, access, companionship and personalised attention.

A private dinner prepared by an exceptional chef, an expedition designed around a family’s interests or a stay in a historic property normally closed to the public can offer a form of exclusivity that cannot be expressed through the price of an object alone.

Experiences also possess an emotional dimension that material products cannot always reproduce: the creation of personal and shared memories.

Research is beginning to capture this preference. A McKinsey and The Business of Fashion survey, cited by Reuters, asked occasional US luxury consumers how they would spend an additional $5,000. Travel was selected by 38% of respondents, ahead of categories such as jewellery and handbags.

Savills has also identified a growing preference among high-net-worth consumers for travel, hospitality and dining. Its research indicates a positive net balance of 25% for intentions to increase leisure travel spending and 16% for the number of trips among surveyed affluent consumers in major economies.

These findings do not imply that all wealthy consumers are reducing their purchases of luxury products. They suggest a redistribution of priorities among certain consumer groups, particularly when discretionary spending requires choices between different forms of luxury consumption.

LVMH and Bulgari Understood That Luxury Could Become a Destination

The connection between major luxury houses and hospitality is not new. Some companies began exploring the possibility of extending their brand universes into hotels decades ago.

Bulgari established a partnership with Marriott in 2001 to develop its hospitality offering. LVMH launched Cheval Blanc in 2006 and acquired Belmond in 2019 for approximately $3.2 billion, strengthening its presence in hotels, luxury trains and exclusive travel experiences.

These investments reflected a strategic insight that is becoming increasingly relevant: a luxury brand can build relationships with its customers that extend far beyond product purchases.

A hotel allows a maison’s identity to be expressed through architecture, interior design, gastronomy, service, wellness and the guest’s entire experience. The brand ceases to be something consumers simply wear or collect and becomes an environment they can temporarily inhabit.

Nevertheless, hospitality still represents a relatively small proportion of revenue for major fashion conglomerates. Reuters notes that LVMH reports these activities within a broader category called Other Activities, which accounted for less than 1% of group net revenue in 2025.

The opportunity is real, but turning it into a large-scale business presents substantial challenges.

The Risks of Turning a Fashion House into a Hotel Brand

Expansion into hospitality may appear to be a natural evolution for luxury houses, but it requires capabilities that differ considerably from those involved in designing, manufacturing and selling luxury goods.

Hotels are operationally complex businesses. They require property investment, specialist personnel, maintenance, service management, technology, distribution, security and continuous attention to standards every day of the year.

Reputational risks can also be considerable. A disappointing hotel experience may affect perceptions of a brand whose reputation has been carefully developed over generations.

Luxury houses can approach this opportunity through different business models. They may acquire or develop their own properties, establish partnerships with specialist operators or license their brands to third parties. Each alternative offers advantages and disadvantages.

Direct ownership provides greater control but requires substantial capital. Management agreements can provide access to specialist expertise, although they demand close coordination. Licensing may reduce investment requirements, but it risks diluting exclusivity if the delivered experience fails to meet expectations associated with the brand.

The future does not necessarily involve turning every fashion house into an international hotel chain. It may instead involve developing a carefully selected collection of extraordinary properties, private experiences or partnerships that reinforce each maison’s identity.

In luxury, expansion creates value only when it preserves what makes a brand exceptional.

The Real Opportunity May Lie in Building Permanent Customer Relationships

One of the most important differences between selling products and providing experiences lies in the frequency and depth of customer engagement.

Purchasing an exceptional handbag, piece of jewellery or garment may represent a high-value transaction, but it does not necessarily generate continuous interaction with the customer. Hospitality, by contrast, offers numerous opportunities for engagement before, during and after each stay.

A hotel group may develop an understanding of guests’ accommodation preferences, dining habits, preferred destinations, activities and service requirements, subject to applicable privacy regulations and appropriate consent.

This information can support more personalised experiences and longer-lasting relationships. Artificial intelligence may expand these possibilities through tailored recommendations, anticipation of customer needs and coordinated service delivery, without replacing the human attention that remains fundamental to luxury hospitality.

Branded residences, premium loyalty programmes, concierge services, private experiences and wellness offerings can also extend the relationship beyond an individual stay.

From a business perspective, this evolution is particularly attractive because it creates opportunities for recurring revenue and deeper customer understanding. However, it also increases operational responsibilities and makes the protection of privacy and trust even more important.

The true competitive advantage will not lie exclusively in owning or managing the finest properties. It will come from making every guest feel that the experience is exceptional, consistent and difficult to replicate elsewhere.

Longevity and Wellness: The Next Frontier of Luxury Experiences

The expansion of high-end hospitality is connected to another transformation that could become increasingly important over the next decade: the convergence of luxury, wellness and longevity.

Affluent consumers are not interested exclusively in acquiring extraordinary products. They may also devote substantial resources to improving their sleep, maintaining vitality, enjoying wellness experiences and accessing highly personalised services.

This is encouraging the development of hospitality propositions incorporating wellness treatments, recovery programmes, personalised physical activity, nutrition and experiences designed around quality of life.

Longevity represents a particularly interesting commercial territory, although wellness services must be clearly distinguished from medical interventions, and health-related claims should always be supported by appropriate clinical evidence.

The business opportunity lies in combining hospitality, personal attention and specialist services within coherent, safe and exceptionally high-quality propositions.

For major groups, this evolution may represent a transition from luxury understood primarily as ownership towards luxury understood as quality of life. For consumers, it expands the possibilities of using wealth to access experiences they consider valuable for their personal and family wellbeing.

The convergence of hospitality, wellness and longevity could become one of the most attractive areas of innovation in international luxury through 2030.

The Future of Luxury Hospitality Will Also Be Defined by Its Limits

Despite favourable prospects, the growth of high-end hospitality is not without risks. Increasing supply may intensify competition in certain destinations, while labour, energy and property costs continue to influence profitability.

The availability of highly qualified professionals represents another challenge. A hotel may invest enormous amounts in architecture, design and technology, but its reputation ultimately depends on the ability of its teams to deliver exceptional service.

There are also risks associated with overtourism, environmental sustainability and pressure on local communities. Hospitality projects seeking to maintain their prestige over decades will need to demonstrate that they create value without damaging the destinations that make them attractive.

Brand expansion itself can become a threat. If every major operator offers similar experiences, exclusivity weakens and differentiation becomes increasingly difficult.

The luxury hospitality industry of the future will need to balance growth, profitability, authenticity, service excellence and responsibility towards the destinations in which it operates.

Are We Witnessing the Emergence of a New Global Luxury Hierarchy?

Developments in 2026 raise a far-reaching strategic question. For decades, fashion and leather goods houses occupied a central position in the global luxury imagination, while hospitality developed as a closely related but economically distinct industry.

The growing strength of experiences is now reshaping that relationship. Major hotel operators are expanding their premium offerings, fashion groups are exploring new forms of hospitality, and consumers are distributing their spending across products, travel, gastronomy, wellness and exclusive experiences.

There is no automatic replacement of one business by another. Jewellery, watches, haute couture and leather goods will continue to play an essential role in the industry. However, future growth may be distributed differently from the patterns that characterised previous decades.

The greatest beneficiaries are likely to be groups that understand luxury not simply as a product category, but as a value proposition built on exclusivity, excellence, emotion and trust.

This interpretation creates opportunities for both hotel operators and traditional luxury houses. Hotel companies can develop brands with deeper cultural identities, while established maisons can extend their universes into experiences that strengthen relationships with customers.

The convergence of these industries could give rise to new business models combining products, services, destinations, technology and deeply personal experiences.

LUXONOMY Conclusion: The Luxury of the Future Will Not Simply Be Purchased. It Will Be Experienced.

The financial evidence from 2026 reveals a transformation that deserves close attention. While some major personal luxury goods groups face a challenging commercial environment, high-end hospitality and exclusive experiences are attracting investment, expanding capacity and strengthening their appeal among affluent consumers.

The stock market divergence between leading hotel operators and traditional luxury conglomerates does not guarantee that this trend will continue indefinitely. It does, however, demonstrate that investors are reconsidering where some of the most attractive growth opportunities may lie.

Luxury has always been connected to desire. What is changing is how that desire is fulfilled.

For generations, owning extraordinary objects was among the most visible expressions of prestige. In the years ahead, access to unrepeatable experiences, meaningful time, exceptional personal service and moments that cannot easily be recreated may become increasingly important.

For major luxury brands, the challenge is to understand that exclusivity does not end with the product. It can extend into hospitality, culture, gastronomy, wellness, travel and the personal relationships they build around their customers.

The future of luxury will not belong exclusively to those who create the world’s most desirable objects. It will also belong to those capable of delivering its most extraordinary experiences. Because the ultimate privilege of luxury is no longer simply owning something exceptional, but experiencing something that money alone cannot always recreate.

LUXONOMY™ — Global Luxury Market Intelligence & Strategic Advisory

Analysis based on information available as of November 14, 2026.

Sources: Reuters Breakingviews (November 11, 2026); Bain & Company and Altagamma, Luxury Goods Worldwide Market Study (June 2026); Savills, Global Luxury Retail Outlook 2026; Marriott International, Second Quarter 2026 Results; Accor, First-Half 2026 Results; Colliers, First-Half 2026 Hotel Market Analysis; McKinsey, State of the Consumer 2026.