Why luxury trains are the next stop for some luxury hotel brands

You have more than Agatha Christie to thank if you immediately think "Orient Express" when someone brings up the notion of luxury train travel (preferably sans murder).

The Venice Simplon-Orient-Express still runs today thanks to travel company Belmond (formerly known as Orient Express Hotels). The luxury train operates between a variety of cities, including Paris and Istanbul, and will set passengers back a hefty penny: A five-night voyage between the two cities next August costs over $36,000 for a double occupancy historic cabin, Belmond's entry-level offering aboard the VSOE.

Want a nicer suite? That'll run more than $86,000.

With rates like that — and trains that frequently sell out — it's no wonder others are entering the luxury train orbit and why there are increasingly more luxury train offerings around the world.

In Japan, one doesn't just book an overnight trip on the Seven Stars train service — you apply to be picked from a lottery. If selected, travelers take one- to three-night journeys through Kyushu, Japan's southernmost main island known for its volcanoes and beaches. Fares range from $6,332 for a one-person suite on the one-night voyage to nearly $17,000 for a one-person deluxe suite on the three-night excursion.

Belmond, which declined questions for this story, operates trains like the Royal Scotsman and British Pullman in the U.K. In Asia, there's the Eastern & Oriental Express, and in Peru, Belmond offers the Andean Explorer.

A newer entrant in luxury-on-rails comes from the hotel sphere. Accor plans to launch its own Orient Express, the Orient Express La Dolce Vita, sometime next year amid its broader expansion of the Orient Express brand into hospitality.

"It's a once-in-a-lifetime opportunity to be able to take a brand that people dream about — a true luxury brand is one that you can fall in love with," Stephen Alden, Accor's CEO of Raffles and Orient Express, told TPG earlier this year. "Who hasn't dreamed of taking a trip with Orient Express?"

Hotels on the rails

It may seem like a head-scratcher that hotel companies want to get into the business of train transit, but experts say this isn't some out-of-left-field infrastructure play by the hospitality sector. Instead, it's something akin to how Marriott International is getting into the cruise business while Four Seasons rolled out a private jet service.

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In short: This array of Orient Express offerings or Belmond's luxury train lineup isn't exactly Amtrak's Northeast Regional between Boston and New York City.

"I'm not sure that hospitality train services are going to be mainstream. I think it's going to remain a niche offering, which will be an interesting one," said Nicolas Graf, associate dean at New York University's Jonathan M. Tisch Center of Hospitality. "I'm not discounting that [possibility], but I don't think it's something that will grow as another alternative type of lodging."

But there's still a reason to go even after the most niche of travel sectors, as customers in this space tend to spend more on travel. Hotel companies made various plays for luxury consumers in recent years, and those overtures ramped up during the pandemic.

IHG acquired ultra-luxury brands like Regent and Six Senses. Marriott International launched a vacation rental platform called Homes & Villas. Mandarin Oriental went a step further by launching its own vacation home rental arm, but this division went through a 700-point checklist to guarantee the homes Mandarin Oriental offered were basically at the same quality level as an actual Mandarin Oriental hotel.

"If your objective is to catch as close to 100% of the share of your guest's travel wallet, you want to have enough scale that they never need to look outside your ecosystem," Marriott International CEO Anthony Capuano said at Skift Global Forum this month, while introducing the rationale for why the company launched Homes & Villas.

Using that logic, why wouldn't a hotel company or two go after luxury train travelers? It's a way to offer yet another new experience to the booming leisure travel segment.

"I'm not surprised that Accor is getting into it. It's fabulous because it's another extension of the hospitality experience to be able to provide something new and different," said Leora Lanz, assistant dean of academic affairs at Boston University's School of Hospitality Administration. "This, to me, is just another creative offering to provide for the leisure experience. It's about creating memorable experiences."

Trainspotting

Just because there's a market for something like this doesn't mean you should expect Belmond or Accor to suddenly start running luxury trains along the Northeast Corridor or across the U.S. Instead, this is likely to remain a geographically limited travel sector rooted in places that historically had ties to luxury train travel like Europe and select parts of Asia.

That can also mean using historic train routes that take longer to traverse in order to give riders a more scenic route — and enough time to make it seem like they are getting bang for their buck.

"If you look at the railroad system, the modern one, for the most part, has been designed for efficiency. Instead of going up the mountain, they build a tunnel. Now, the more historical ones go through windy paths and up mountains and pass by lakes. They have a totally different scenery," Graf said. "You need these ingredients to make it worth more money. I would look at where historically these were built because they are the ones that would offer the ingredients for the ultra-luxury train experience."

Sorry, Northeast Regional. Maybe in a few hundred years you'll get your Venice Simplon-Orient-Express moment.