Luxury's new scarcity

On a bitterly cold Paris morning in mid-December 2018, LVMH announced a US$3.2 billion deal to acquire Belmond, then owner or operator of 46 of the world’s best hotels, restaurants, trains and yachts. At the time, it could have looked like another trophy acquisition for Bernard Arnault’s expanding luxury empire. With hindsight, it seems rather more prescient.

On an analyst call that December morning, one question dominated: Was LVMH buying Belmond because it feared that consumers were moving away from luxury goods and towards experiences? The answer, according to Thomas Cauvet, Citi's luxury goods analyst, was no – the same customers would buy both. The opportunity lay in following them beyond the handbag, watch or bottle of champagne into the hotel room, the restaurant, the spa and on the journey.

The distinction matters. Cauvet is one of nearly a dozen experts I canvassed for a piece in The Residence Report 2026/27 on the future of luxury consumption‚ many of whom pushed back on the idea that the wealthy were favouring experiences over possessions. Rather, the thorny issue is the sheer range of things competing for their attention – and the difficulty of impressing them. 

After all, as wealth concentrates at the top, the highest earners don't simply buy more of the same products. “Just because you’re a millionaire, that doesn’t mean you’re going to be buying 10,000 Vuitton handbags,” Luca Solca, Global Head of Luxury Goods Research at Bernstein, told me. Incremental wealth moves elsewhere: towards the helicopter, the football club, the exceptional trip or the villa in St Tropez.

From specification to depth

For developers, one implication of this is that specification alone is losing its power to differentiate. Spa. Gym. Cinema. Private dining room. Residents’ lounge. Cold plunge. Each may be excellent, but at the upper end of the market they are increasingly viewed as standard.

Distinction requires something more. As Ariel Childs of Winkreative put it succinctly: “Luxury is about depth.” That means depth of understanding of a place, of how something was made and why it belongs where it does. “Price and offer are no longer enough to relay a quality and luxury experience,” she said.

There will always be some real estate that inherently transcends standardisation. A genuinely exceptional site cannot be reproduced. Neither can a historic building, a mature landscape, a particular view or a neighbourhood with real cultural life. Chauvet sees a similar movement in luxury goods towards provenance, durability, timelessness and products that are distinctive rather than ubiquitous.

Another danger for developers is designing too precisely for the present. “If all of the trends that are fuelling this were to become hilariously out of style in three years, would this property still have any compelling attributes?” asked Mark Schatzer in his book The Dorito Effect. His test is deliberately simple: timeless design, an exceptional setting, a great view and access to nature. The rest, as he puts it, may simply be “window dressing”.

The operating system

Ana Brant of Cain spent a year living at a luxury branded residence in Miami. The architecture, she said, was stunning. But the practical experience of becoming a resident was rather less impressive. Moving in involved bureaucratic procedures, reserving dedicated access and providing a physical US$10,000 cheque as security against damage. The comparison with another high-end residence she had previously occupied was stark: residents there received a list of vetted cleaners, tradespeople, petsitters and other useful providers. In Miami, much of that domestic complexity was handed back to the residents.

The anecdote captured a gap that matters more as physical amenities become commoditised. Luxury is shifting from hardware towards an operating system: not simply what the building contains, but how successfully it removes friction from everyday life.

Technology will inevitably play a larger role. Brant is already working on systems in hospitality that can recognise a returning guest and put the relevant information in front of the right member of staff at the right moment. The challenge, she told me, is to make the intervention “meaningful, not intrusive”.

As technology grows more powerful, the more important the role of human judgement becomes. At Belmond, Fiona Brockhurst, who oversees global private clients, distinguishes between understanding her guests’ “passions and not just their preferences”. Technology is making information ever more abundant, but this kind of judgement remains a scarce commodity.

The human premium

That scarcity creates perhaps the biggest constraint on the expansion of luxury. “How many people can you train to deliver truly excellent service?” asked Solca. It is a key question for developers moving further into hospitality-style service. Buildings can be replicated, pools can be built and technology installed. Developing thousands of people with the judgement, warmth and confidence required to deliver genuinely exceptional service is much harder.

Belmond offers a glimpse of what that means in practice. Brockhurst described staff who have spent 10, 20 or 30 years at a property and have become part of its identity. At Caruso on the Amalfi Coast, she pointed to a longserving bar manager whose lemon gimlets have become part of the ritual for returning guests; he brings the lemons from his own farm. Such employees, Brockhurst said, “are the key holders to this part of our history”.

It is difficult to imagine a better description of an asset that cannot simply be purchased. A developer can commission another beautiful bar. It cannot order 25 years of accumulated memory, relationships and trust. The people are part of the provenance.

And this is where the tension with scale becomes acute. The characteristics attracting the highest premium – individuality, local knowledge, trusted relationships, genuine personalisation – are precisely those most likely to be weakened by standardisation. The strongest brands may therefore become less like stamps of uniformity and more like curators: providing confidence, distribution and operational muscle while allowing individual places to retain their character.

The uncopiable advantage

None of this necessarily means that the psychology of wealth has fundamentally changed. Status, belonging and distinction remain powerful human impulses. What’s changed is how they are signalled. As Harrison Hide, co-founder of the forthcoming Long Lane wellness members’ club and hotel, put it: “Status has moved from what people own to how they live.”

For luxury residential developers, that can easily be read as a call to add more experiences, more wellness or another members’ club. But the more useful question may be what, within a particular development, genuinely resists replication. It might be the site, architectural provenance or craftsmanship. It might be extraordinary operational competence, a service culture built over decades, privileged access to a place or the ability to assemble an unusually interesting community. Increasingly, it may be the confidence to recognise that not everything needs to scale.

Technology will make surface-level personalisation cheaper. Global brands will make high-quality design and specification more widely available. Wealth will ensure that ever more extravagant amenities will be utilised. None of those things will disappear. But abundance inevitably changes the meaning of scarcity. The harder luxury becomes to distinguish by price or physical specification, the more value migrates towards things money alone cannot instantly manufacture: time, trust, memory, judgement, privacy, belonging and a genuine sense of place.

The most successful luxury developments of the next decade may therefore be those that resist the temptation merely to look expensive. They will create places that feel difficult to copy – places that could only exist here, with these people, and nowhere else.

For more from me on these themes, see p.28 – though questions of scarcity, experience and what luxury means permeate much of the report. I hope you enjoy it.

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