Insiders Reveal What’s Behind the Rise in Hotel-Branded Residences

This sweet spot between home and holiday allows homeowners to arrive at their preferred destination—whether for business, visiting family, or simply an escape—with familiar comforts at their fingertips. And this is evidently very appealing to a large proportion of affluent buyers. “This shift also aligns with the rising trend of intergenerational travel, where families and groups seek accommodations with the comforts of home and the luxuries of a vacation,” Bang continues. Whether traveling alone or with others, high-net-worth individuals are catching on to the benefits that a residence managed by a hospitality brand brings, and demand is increasing exponentially.

“Branded residences provide a level of service and lifestyle that traditional residential projects cannot match,” says Andre Zotoff, CEO of Strategic Hotels & Resorts. The company is behind the relaunch of the iconic Waldorf Astoria in Manhattan, which will debut 375 private residences when the historic structure re-opens next year after a multi-billion-dollar overhaul. Giving over almost half of the building to residential is indicative of “the growing trend of branded residences,” where “Waldorf Astoria saw an opportunity to expand its status to the luxury real estate sector,” Zotoff shares. Joining multiple similar options in New York City, the Waldorf Astoria hopes to lure future residents with access to 50,000 square feet of private amenities on the uppermost floors, and “a chance for prospective residents to be a part of [the building’s] legacy.”

Meanwhile, brands that entered this market early are growing their residential portfolio at a rapid pace, and expanding globally in the process. While confined to the North American market—with some exceptions—until recently, “there has been a global boom in the market for branded residences, with newfound demand in regions such as Asia, Europe and the Middle East,” according to Adelina Wong Ettelson, global head of Residences marketing at Mandarin Oriental Hotel Group. The group has projects operating in locations from Barcelona to Bangkok, and several in the pipeline in Vienna, Madrid, Munich, and more.

Most luxury hotel brands began their residential offerings within their existing or newly built properties, allowing residents to use all of the on-site resort amenities—concierge services, housekeeping, Michelin-starred dining, and spa and wellness facilities—and staff to be efficiently shared across both. Now, with demand so high, more brands are launching standalone residential properties so that residents can receive the same highly serviced lifestyle without having to mingle with hotel guests. Aman opened its first standalone residences in Tokyo earlier this year, offering buyers “the elegance, simplicity and personal attention to detail of an Aman hotel, balanced with the seclusion of a private home in an exceptional location,” says ​​Vanessa Grout, the brand’s global head of residences.

One of the top draws for buyers in this market is design. The big luxury brands have the money and the gravitas to pull-in internationally renowned architects and interior designers to create spectacular buildings and spaces for private residences, as they often do for their hotels. And if an individual or family is enamored by a particular aesthetic at their favorite resort, they can easily buy into it by opting for a branded residence from the same group. “Brand loyalty and recognition, state-of-the-art facilities and services, and design by world-renowned architects are all reasons why buyers are gravitating toward branded residences,” says Grout, noting that Aman has 22 opened and forthcoming branded residences around the world since its first in Phuket, Thailand, in 1998.

Hiring a designer to renovate a home can be time-consuming and costly, and many homeowners don’t want to deal with the hassle, so a turnkey service and a move-in-ready space is highly appealing—especially since “oftentimes buyers are entering into this market for their second, third, or even fourth home” says Brad Berry, vice president global residential development at Rosewood. The brand recently debuted residences by Philippe Starck—including a spectacular penthouse—within the Jean Nouvel-designed tower at its São Paulo resort, and is due to launch sales for new properties in Beverly Hills and Los Cabos very soon.

Homeowners at some branded residences can rent out their properties when not in use, and the operator takes care of it all without them having to lift a finger. Everything is put back exactly as they left it. Whatsmore, residents of hotel-operated properties receive exclusive access to events, special rates at other locations around the world, as well as the perks of 24-hour concierge service and much more. “They can offer an owner benefits package that’s beyond what design or luxury retail brands can offer to high-net-worth individuals, especially those who travel frequently and who have homes in different markets which we know is the case for many of our loyal customers,” says Zotoff.

This is what gives luxury hospitality groups the edge over those in other sectors that have ventured into the space. Fashion brands such as Armani, Dolce & Gabbana, Fendi, Missoni, and Bulgari, and car companies including Porsche, Mercedes-Benz, Bentley, Bugatti, and Aston Martin are among those who have also been developing own branded residences for years—many of them in cities like Miami or Dubai, where the luxury market is already incredibly strong. But hoteliers are in a unique position to offer their residents, given their established experience and proven track records of providing the type of exceptional service that buyers in this very top price range expect. “At the end of the day, it is not just about the name on the building, but the experience and service that matters,” says Rosewood’s Berry.

With so many options, which one to choose? As Aman’s Grout mentioned, it all comes down to brand loyalty—an invaluable asset in today’s world. And from those companies with a dedicated following, expect to see many more branded residences in the near future.

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