Europe’s Luxury Hotels Embrace Lifestyle-Led Growth
Europe’s hotel development pipeline is being reshaped by a pronounced shift towards luxury and lifestyle concepts, according to a new Hotel Analyst report produced in partnership with THP.
The study, Luxury and Lifestyle Hotel Brands in Europe, argues that the two segments are no longer running on parallel tracks. Instead, they are increasingly intertwined, with lifestyle concepts influencing what “luxury” means for today’s traveler, and luxury operators giving lifestyle brands the design authority and service credibility that support higher room rates.
A central theme is that luxury is moving away from visible opulence and towards intangible value. The report describes a transition from chandeliers and marble to emotion, privacy, and personalization. Guests are seeking experiences that feel authentic and curated, rather than uniform five-star formality. At the same time, lifestyle hotels have evolved from niche disruptors into scalable products that can still convey individuality through design, food and beverage programming, and a stronger connection to local culture.
Lifestyle Supply Accelerates Across Europe
On the supply side, the report highlights the speed at which lifestyle has expanded. Between 2014 and 2019, the number of rooms in lifestyle hotels more than doubled from 115,000 to 240,000. By 2024, that figure is estimated to have doubled again to around 480,000 rooms. The segment now represents roughly a quarter of the global and regional hotel development pipeline, underlining its structural importance rather than its status as a niche.
For owners and developers, the attraction lies in both demand and economics. Lifestyle hotels are typically built around efficient room sizes and highly productive public areas. In well-executed schemes, lobbies operate as flexible “third spaces”, capturing co-working demand by day and social spending in the evening. This can strengthen food and beverage revenues and support occupancy, although such spaces must be properly activated to avoid becoming costly but underused areas.
Luxury guest preferences, meanwhile, remain anchored in tangible quality signals. Survey evidence cited in the report shows that high-quality gourmet cuisine is the single most important factor in choosing a five-star hotel, followed closely by exceptional interior and exterior design. Sustainability ranks lower in direct booking decisions. Guests do value specific measures such as reducing single-use items, separating waste, and offering locally sourced food, but few select a hotel primarily on environmental credentials alone.
Wellness and Residences Reshape Investment Logic
Wellness is emerging as a major differentiator at the top end of the market. The report points to a shift from traditional spa models towards longevity and preventative-health concepts, combining diagnostics, personalized programs, and hospitality. While wellness facilities can appear less attractive when judged purely on departmental margins, credible wellness strategies can still enhance overall profitability by driving longer stays, higher room rates, and repeat visitation.
Branded residences are identified as another powerful development lever. The report highlights strong price premiums for branded residential product and the role of early unit sales in de-risking hotel projects. Although brand compliance adds to development costs, residential components can improve financing flexibility and make smaller luxury hotels viable within mixed-use schemes.
The report concludes that Europe’s luxury and lifestyle hotel market is undergoing structural change. Brands that design for emotional engagement, integrate credible wellness, use loyalty platforms effectively, and deploy residential elements strategically are best positioned to defend pricing power. Those relying on outdated signals of luxury, or treating lifestyle as a superficial design layer, risk falling behind as competition intensifies.
To find out more about the report and download sample pages visit: Luxury and Lifestyle Hotel Brands in Europe | Hotel Analyst.
