Beyond the Suite Life. Total Hotel Buyouts Are Growing in Popularity.

Group travel has taken on new meaning for some wealthy consumers, who increasingly are taking over entire hotels.

In an experience-obsessed era, those who can are going beyond just a stay at a five-star hotel to having it all to themselves alongside family and friends. Luxury travel advisors report an uptick among their deep-pocketed clients who book accommodations in their entirety for both large and small groups.

Andrew Steinberg, an advisor with the Ovation Network in New York City, says that his buyout business is up 50% this year compared with 2023.

“From a dozen, I have more than double now. The prices for these weekend stays can start at US$500,000 and easily top US$1 million,” he says. “People love them because they can manage every aspect of the experience and extend their event.”

As an example, Steinberg planned a lavish 50th birthday last year in Versailles, France, for a client who took over Airelles Château de Versailles, Le Grande Controle, located on the grounds of Versailles, for a weekend. The extravaganza cost well into the seven figures, he says, and included elements such as a scavenger hunt on the palace grounds and a five-course dinner party prepared by the renowned chef Alain Ducasse, where guests donned 17th-century costumes provided by the host.

Entertainment included fire breathers and Cirque du Soleil-style dancers. Steinberg notes that guests also received a different gift each day such as silk scarves and pricey wines. “By having the property to ourselves, we were able to manage every touchpoint,” Steinberg says. “We had napkins for every meal with the host’s initial and amenities such as a personalised cookie station.”

Andrew Steinberg, an advisor with the Ovation Network in New York City, says that his buyout business is up 50% this year compared with 2023.
Andrew Steinberg

Stacy Fischer-Rosenthal, the president of the New York-based Fischer Travel, which charges a US$150,000 membership fee, is also planning more buyouts than ever before for occasions such as weddings, birthdays, and “just because” get-togethers.

“Takeovers offer complete privacy, safety, and flexibility. The client does not have to adhere to a set schedule and can make theirs up as they go along,” Fischer-Rosenthal says. “There is a dedicated team catering to all of their wants and needs.”

The membership-based travel company Andrew Harper is another brand that has seen a jump in buyouts. Colin Housley, vice president of member experience, says the increase in demand led the company to launch an initiative called Exclusive Experiences, which focus on immersive and private trips such as luxury hotel buyouts and private island stays.

“Our members who plan these trips receive access to unique activities and excursions that we have negotiated with our partners,” Housley says. “We also leverage our relationships to make buyouts happen for properties that normally wouldn’t offer it.”

Andrew Harper has seen a “flood of requests” for private stays since Exclusive Experiences launched, he says.

Steinberg planned a lavish 50th birthday last year in Versailles, France, for a client. The extravaganza cost well into the seven figures, he says,
Andrew Steinberg

Meanwhile, another New York-based travel company Black Tomato had a client who bought out Aman Venice to throw a US$1 million party for his wife’s 50th birthday.

“We arranged performances by opera singers, an orchestra, and a rock band, and the celebration ended with a treasure hunt on the rooftop of the Gritti Palace in the penthouse suite,” says Black Tomato travel expert Sunil Metcalfe , who also notes the uptick in such buyouts.

In addition to travel companies, representatives from several upscale hotels, including the Ranch at Rock Creek in Philipsburg, Mont., and Cal-a-Vie Health Spa in Vista, Calif., say that takeovers of their properties are on the rise. Many, particularly smaller hotels, offer buyout-specific packages.

Cali Mykonos, located on the namesake island’s Kalafati Beach, has created a package for a cost of between US$57,000 and US$75,000 that allows guests to book its 40 villas, each with a pool and large terrace, and enjoy amenities such as the large main pool, yoga classes, boat fleet, beach and restaurants exclusively with others in their group.

Sir Richard Branson ’s Necker Island in the British Virgin Islands has a buyout package starting at US$118,500 a night for 24 rooms that’s consistently booked throughout the year, according to a property representative. The rate includes meals and most activities, such as water skiing, snorkelling, and pickleball.

Weekapaug Inn, located in Westerly, R.I., introduced a buyout experience to commemorate its 125th anniversary this year. Called the Milestone Getaway, it encompasses the use of the hotel’s 33 rooms for two nights, meals and activities; the price is US$125,000.

Tom Parisi, an investment banker, and Adriana Destefanis, an asset manager, who live in Darien, Conn., bought out Weekapaug Inn for their wedding last October.

In addition to the wedding events, the couple’s more than 150 guests stayed busy by participating in diversions such as bike riding, birdwatching, stargazing, and s’mores by the fire pit.

“Having a private element is very unique in our view,” Parisi says. “We felt like we were in our own massive house and able to spend quality time with our family and friends. And we could be loud without worrying about other guests. We didn’t want to just have a wedding. We wanted an experience, and the buyout gave us that.”

AI agents like Muse can already find you the cheapest hotel room in Paris. But they can’t locate a cheaper version of that Catskills cabin you’ve been eyeing, because it might only be available on Airbnb ABNB -1.43%decrease.

Investors should pay attention to that distinction. When Meta Platforms META 3.38%increase launched its Muse agent last month, travel stocks including Booking Holdings BKNG -1.19%decrease, Expedia and Airbnb all fell sharply.

Airbnb, though, has a real chance to emerge as a winner from the upheaval. The catch: Its stock already reflects above-industry growth. To justify its valuation, Airbnb will need to turn repeat customers into loyal ones.

Online travel companies make much of their money by simplifying search and collecting fees on bookings. AI agents threaten that model.

But not all travel marketplaces are equally exposed. Booking and Expedia largely sell hotel rooms that travelers can also book directly or through competing sites. If an agent can find the same room elsewhere, it has little reason to favor either Booking or Expedia.

Booking and Expedia also sell sponsored listings that steer travelers toward particular properties. Wells Fargo estimates those will account for about 8% of Expedia’s revenue and a much higher percentage of profit next year.

Airbnb has more ways to adapt. More than half its listings are available only on its platform, and more than 90% of its traffic comes directly to its app or website.

The customer relationship doesn’t end after booking, either. Bernstein analyst Richard Clarke notes that 90% of Airbnb guests go on to message their hosts about arrival times, keys or local taxes, giving Airbnb a connection to both sides of the transaction.

How the companies have responded to the possible agentic future is telling.

Expedia quickly signed on as a Muse partner. Airbnb hasn’t, and Chief Executive Brian Chesky says AI chatbots have so far been a boon, sending customers to Airbnb’s website.

Chatbots might work for buying paper towels, he quipped at a Skift conference last month, but people enjoy planning trips. He argued that browsing dozens of homes isn’t something a text-based chatbot is well suited for.

Still, the AI jitters arrived just as Airbnb was persuading investors it deserved its pricey multiple. For years after its 2020 initial public offering, the stock—which trades around 25 to 30 times forward earnings—went nowhere. Investors saw a mature operator trading at a growth premium.

This year, Airbnb growth seems to be accelerating. The stock jumped in August after the company raised its full-year revenue-growth guidance with its second-quarter results. Wells Fargo analyst Ken Gawrelski credits a run of product improvements under a revamped leadership team.

Among the changes: letting guests reserve now and pay later, adding hotels, and a redesigned home page and app. Investors were also betting on what comes next, including thousands more hotels, car rentals and, eventually, advertising.

The irony is that some of those growth drivers push Airbnb closer to the kind of business Booking and Expedia run—the kind of business AI agents could threaten. Even if AI agents capture a large share of travel planning and booking, Airbnb would capture the demand. But it and others would slowly lose control over how customers find and choose properties.

That would undermine the advertising opportunity investors are counting on. The bigger point for Airbnb and other marketplaces is that losing control of customer acquisition could mean surrendering some of their pricing power and margins.

To bulletproof itself, Airbnb might look to another e-commerce giant that has so far kept AI agents at arm’s length: Amazon.

Like Amazon, Airbnb has a loyal customer base and hard-to-match supply. But it has nothing like Prime membership to make customers think twice before taking their business elsewhere.

That is where loyalty comes in. Business travelers stick with Hilton or Marriott because enough nights earn them perks. Leisure travelers rarely accumulate stays with one chain. Airbnb has millions of listings and plenty of repeat customers, but no broad rewards program. It has begun experimenting with credits on hotel stays, but it should make loyalty a priority, not just a promotion.

Airbnb also plans to launch its own AI agent next year. But travelers using an agent might still want it to search Airbnb, Vrbo, Booking and hotel websites alike, rather than limit itself to one company’s inventory.

Eventually, Airbnb might have to strike deals with agent makers, using its unique homes as leverage to negotiate favorable terms, says Gawrelski. Such deals, along with rewards for loyal guests, could over the long term eat into the company’s roughly 13% take rate, he adds. But if they bring in enough additional bookings, the trade-off could be worthwhile.

History offers a reason not to panic. The shift from desktop to mobile unsettled investors in Alphabet and Amazon, but both emerged as major beneficiaries. Companies with valuable assets can come out of a platform shift stronger, if they adapt quickly enough.

Airbnb has homes the bots can’t easily replace. Now it needs to give guests a reason to insist on booking them there.

Beyond the Suite Life. Total Hotel Buyouts Are Growing in Popularity.

AI-powered travel agents are challenging online booking platforms, but Airbnb’s exclusive listings and direct customer relationships could give it an edge. Its next challenge: turning repeat guests into loyal customers through stronger rewards and innovation.