For much of the recent past, the luxury hotel market has been structured around clear and relatively stable boundaries. A small group of brands sat confidently at the top, supported by high-touch service, heritage, with an implicit understanding that luxury was defined as much by exclusivity as by quality.
NB: This is an article from Brand Finance
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Below them, midscale and upscale brands occupied distinct positions, rarely challenging the authority or pricing power of the luxury tier. Instead, they served a different audience with different needs.
That hierarchy has steadily eroded as traveler expectations and aspirations have evolved. Upscale and lifestyle brands have responded by moving decisively upward, investing in design, operational reliability, and experiential consistency in ways that increasingly place them in direct competition with traditional luxury brands. What was once a clearly tiered market now feels far more compressed, with premium cues distributed across a much wider range of brands. As a result, guest expectations have continued to shift across age groups and income levels alike, reshaping how pricing power is earned and defended in a premium space that feels more crowded than ever.
Brand Finance has been conducting global market research on the hotels sector for nine years and the latest results from the 2026 study captures a market in the midst of this transition. Travelers are recalibrating how they define value, placing greater emphasis on experience quality, atmosphere, and design coherence than on historic prestige alone. As a result, luxury is no longer sustained by product superiority in isolation. Maintaining a price premium increasingly depends on experiential exclusivity, on offering something that feels meaningfully different and otherwise unobtainable, rather than simply more expensive. The brands best positioned for this environment are those able to deliver experiences that cannot be easily replicated, creating what many now describe as the industry’s elusive “sixth star.”
When Upscale Starts Behaving Like Luxury
One of the clearest patterns to emerge from the 2026 data is the extent to which upscale and lifestyle brands now sit alongside ultra-luxury in the minds of affluent travelers. Among high-income respondents, the most preferred and most recommended hotels still include familiar leaders such as St. Regis, Belmond, Aman, One&Only, Auberge, and Rosewood. What is different is that these brands no longer appear in isolation. They are increasingly mentioned alongside Hyatt, InterContinental, Hilton, JW Marriott, and Trademark Collection, reflecting a far more compressed premium landscape.
What emerges here is a shift in how value is being assessed at the top end of the market. For high-income travelers, consistency, well-calibrated design, and intuitive service increasingly carry as much weight as traditional luxury cues, particularly when they are delivered without friction. When upscale brands perform strongly on these dimensions, they are more readily grouped into the same “worth staying” set as established luxury brands. Distinctiveness still matters, but it is less closely tied to formality or grandeur and more to atmosphere, coherence, and a brand identity that feels relevant and contemporary.
Taken together, these patterns suggest the early stages of category compression. Luxury brands are increasingly defined not by the distance between themselves and the tiers below, but by how effectively they differentiate themselves from a growing premium middle that has learned how to deliver many of the experiences once considered exclusive to luxury.
The Rise of “Smart Luxury” Among Younger Travelers
The shift toward a more compressed premium market is continuing to take shape in the preferences of younger travelers. Among those aged 18 to 34, hotels that are most likely to be recommend extend well beyond the traditional luxury tier. Four Seasons and Ritz-Carlton continue to perform strongly, but they increasingly sit alongside JW Marriott, Sheraton, and Holiday Inn.
For this cohort, the drivers of choice differ markedly from those of previous generations. Experience matters deeply, but it is not automatically equated with price. Younger travelers are highly attuned to whether a premium feels justified, and they are quick to favor brands that deliver a four-star feel at a three-star price.
This recalibration in how value is assessed creates pressure for brands that have historically relied on heritage or legacy. While younger, higher-income travelers and emerging affluent segments continue to respect the prestige associated with luxury, they do not treat reputation as a guarantee of value. Each stay is evaluated on its own merits, which means even long-established luxury brands are expected to demonstrate, rather than assume, why their premium is warranted.
Among travelers aged 45 and above, patterns remain more traditional. Brands such as Marriott, Hilton, One&Only, and Belmond continue to benefit from familiarity and long-standing emotional equity, with reputation built over time playing a more decisive role in choice. Even here, however, upscale brands appear more frequently than in the past, reinforcing the sense that value is now being assessed across a wider spectrum than traditional tiering alone would suggest.
The Pricing Paradox
The changing dynamics of the premium market are especially evident in how travelers respond to the idea of hotels being “expensive but worth the price.” Historically, this category was dominated almost exclusively by Four Seasons, Ritz-Carlton, and a small number of independent luxury brands. In Brand Finance’s 2026 research, those brands continue to lead, but they now share this territory with Grand Hyatt, Hilton, and Sheraton. None of these brands have traditionally been positioned as luxury, yet travelers increasingly view them as fair value for their price point. Among 18-34 year olds, 59% of respondents describe both Four Seasons and Sheraton as “expensive but worth the price”, showcasing how perceptions of premium value are no longer confined to ultra-luxury brands.
What this highlights is a recalibration of how premium is judged. Design quality, dependable service, and a comfortable, modern environment are no longer points of differentiation in themselves; they are increasingly assumed across the upper end of the market. When these fundamentals are delivered consistently, travelers appear more open to accepting higher rates, even when a brand does not carry traditional luxury credentials.
For luxury brands, the challenge is shaped less by a lack of admiration than by how consistently that admiration converts into willingness to pay. In the US market, Ritz-Carlton records the highest reputation score, yet it also attracts one of the highest levels of “too expensive for what you get” sentiment, pointing to growing tension around premium justification. By contrast, Four Seasons converts reputation into price acceptance more cleanly, underscoring that not all luxury brands experience this pressure to the same degree. Among younger travelers in particular, admiration for luxury often coexists with a greater openness to recommending upper-upscale brands that feel more proportionate in value, reinforcing the idea that pricing power increasingly depends on how clearly the experience justifies the premium.
Distinctive Experiences as The New Luxury Advantage
In a market where strong design and operational reliability have become increasingly widespread, the luxury brands that continue to stand apart tend to be those whose identities are shaped by something beyond product alone. Aman, for example, has built its portfolio around a philosophy of place and space, with properties such as Amangiri in Utah and Amanpulo in the Philippines designed to foreground environmental context, seclusion, and a sense of calm as central elements of the guest experience.
A similar approach can be seen in Belmond’s portfolio, where the experience is framed less around standardized hotel attributes and more around narrative and cultural immersion. From heritage rail journeys such as the Venice Simplon-Orient-Express to destination hotels embedded in local tradition, Belmond positions each stay as part of a broader story tied to place, history, and rhythm. One&Only follows a comparable logic, with resorts that draw heavily on their natural and cultural surroundings, whether through site-specific design, locally rooted programming, or curated activities that reflect the character of each destination. In each case, differentiation is achieved not through uniformity or scale, but through experiences that feel inherently linked to where they are and what the brand stands for.
This is shown by the brands leading on the “Brand I love” metric among high income US consumers, which include huge luxury titans such as Hyatt and Hilton, but also smaller, more bespoke brands such as St. Regis and Autograph Collection.
Implications for owners and operators
These shifts have clear implications for how hotel portfolios are developing and how brand strategies are being shaped across the sector. As emerging affluent and younger high-income travelers increasingly gravitate toward upscale and lifestyle brands, those segments are playing a more prominent role in attracting future revenue growth, while luxury competes within a much broader premium set. Understanding how these audiences assess value and move between tiers is becoming increasingly important. At the same time, investment patterns are subtly changing. Experience-led elements such as curation, authenticity, service culture, wellness, and sense of place are emerging as more influential drivers of value than formality or ornamental expressions of luxury.
For established luxury brands, this environment places greater emphasis on depth rather than display. The brands that continue to perform strongly tend to be those with a clear point of view, environments that create emotional connection, and service philosophies that feel intentional rather than standardized. Exclusivity, in this context, is less a function of price or prestige and more a reflection of how distinctive and memorable the experience feels. What ultimately sustains a premium is not how elevated a brand claims to be, but how consistently it delivers something guests cannot easily find elsewhere.
The hotel sector is entering a period in which premium cues are increasingly widespread and the boundaries between traditional tiers continue to soften. Travelers are not stepping away from luxury so much as reassessing what it represents and when it feels justified. As the middle of the market moves upward, luxury is being defined less by extravagance and more by authenticity, creativity, and emotional resonance. In this environment, the brands that stand out tend to be those that translate their identity into experiences that feel coherent, grounded in place, and meaningfully different from what the wider premium market now offers.
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Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.
