Dive Brief:
- Real estate and hospitality management company Hersha Hospitality Management has launched a new division, Echelon Luxury & Lifestyle.
- The division was created to drive revenue and value for hotel owners and investors in the independent and boutique hotel space, which HHM President and CEO Naveen Kakarla said is gaining popularity. Echelon offers hotels in the portfolio a suite of marketing and creative services, including sales and editorial strategy, brand positioning and community outreach.
- The Echelon division launch comes as the luxury lifestyle category sees strong performance following the pandemic. Other management companies including Pyramid Global Hospitality are also expanding in the space.
Dive Insight:
The luxury and lifestyle hotel segments have shown strong growth fundamentals following the pandemic, with travelers more willing to spend in these areas as they look for unique, experience-based trips.
U.S. boutique hotels across all classes have performed well in their recovery, according to STR data from June 2022 that compared several performance variables to the same time in 2019.
In terms of revenue, lifestyle hotels in the upscale and upper-midscale segments performed particularly well, outpacing other classes, with a 41.4% boost in revenue from 2019 to 2022. The soft brand upper-upscale segment posted the next highest revenue increase (24.8%), and the independent boutique luxury segment followed with a 23.3% increase, according to STR.
Of the 240 independent hotels managed by HHM Hotels, Echelon represents more than 50 hotels and resorts across the country, including The Rittenhouse in Philadelphia, The Joule in Dallas and The Envoy Hotel in Boston.
The hotels within the Echelon portfolio are positioned to accommodate various traveler types, including business and leisure. Kakarla said the properties reflect the landscapes around them, with locally influenced design, amenities and leisure venues. “Our hotels and resorts engage guests with meaningful experiences at every touchpoint.”
Another hospitality management company to recently expand in the luxury lifestyle space is Pyramid Global Hospitality. The company added six properties to its portfolio in May, four of which fell into the luxury lifestyle category.
Additionally, investment firm NewcrestImage recently acquired a 50% stake in management company Coury Hospitality in an effort to break into the luxury lifestyle space.
