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

Sept. 29, 2022
6 min read
Venice Simplon-Orient-Express
Why luxury trains are the next stop for some luxury hotel brands
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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.

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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?"

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Accor's soon-to-be-refurbished Orient Express rail car. ACCOR

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.

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.

The Grand Suite aboard the Venice Simplon-Orient-Express. BELMOND

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

The Eastern & Oriental Express. BELMOND

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.

Featured image by BELMOND
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
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10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
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The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023