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JOHANNESBURG – Commercial real estate giant CBRE is highlighting a growing trend in the hospitality sector: the rise of lifestyle hotels, fuelled by the increasing travel and accommodation preferences of Generation Z. The observations suggest a potential opportunity for hotel brands to expand, particularly in the upper midscale and below categories where lifestyle offerings are currently limited.

CBRE’s analysis points to Gen Z’s desire for unique and experience-driven travel. Unlike previous generations, this demographic prioritizes hotels that offer more than just a place to sleep; they seek spaces that reflect their values, provide social opportunities, and offer a sense of community. These hotels often feature design-focused spaces, local experiences, and flexible amenities catering to remote work and social interaction.

The current market landscape shows fewer established lifestyle brands operating within the upper midscale and lower price brackets. This gap presents a strategic opportunity for hotel chains and independent operators alike. Brands that can successfully cater to Gen Z's expectations – offering authentic experiences, technology integration, and a focus on sustainability and social responsibility – are likely to see significant growth.

While CBRE’s report doesn't provide specific figures on market share or projected growth rates, the general consensus within the industry is that the demand for lifestyle hotels will continue to increase as Gen Z’s influence on the travel market grows. Experts believe this trend will reshape the hospitality landscape, pushing traditional hotel models to adapt and innovate to remain competitive.

The shift towards lifestyle hotels is not solely driven by Gen Z; millennials and younger travellers also contribute to the demand. However, Gen Z's increasing purchasing power and distinct travel preferences are accelerating the trend, making it a key consideration for hotel developers and investors across South Africa and beyond.