Lifestyle hotels are experiencing rapid growth in the Asia Pacific region, driven by the preferences of the Gen Z demographic, according to a new report by CBRE. The report, titled “Gen Z Checks In: The Rise of the Lifestyle Hotel,” outlines how this influential group is reshaping the hospitality landscape with their demand for experiential travel, authentic local culture, and seamless technology.
The report reveals that lifestyle hotels, which focus on unique cultural and design elements, are among the fastest-growing segments in the hospitality industry. Ananth Ramchandran, Head of Advisory & Strategic Transactions, Hotels & Hospitality, Asia at CBRE, noted, “Lifestyle hotels are well positioned for sustained growth as Gen Z’s spending power rises.”
Key findings from the report include the projection that the penetration rate of branded lifestyle hotels in the Asia Pacific region will increase from the current 1% to 8%. Additionally, the region’s total hotel supply has a 10-year compound annual growth rate (CAGR) of 5%, whilst lifestyle hotels boast a significantly higher CAGR of 19%.
Singapore and Hong Kong SAR lead the region in lifestyle hotel penetration, attributed to hotel owners’ willingness to adopt new brands. Despite challenges such as rising construction costs, CBRE suggests that conversions of existing properties offer a cost-effective alternative for investors.
The report concludes that smaller independent assets present attractive opportunities for conversion into lifestyle brands, providing value-added and opportunistic investment options. As Gen Z continues to influence market trends, the lifestyle hotel segment is poised for further expansion.
