Branded Residences: Why Luxury Hotels are Betting on Villas
- Anne Marie Brown
- 11 minutes ago
- 6 min read
I’ve worked for two of the largest luxury destination clubs, Exclusive Resorts and Inspirato. The pitch at both these companies was the certainty of a hotel experience with the privacy and space of a villa.
The hotel industry is now finally catching up to that tempting offer with an explosion of branded hotel residences.
Conduct a site inspection at just about any luxury resort in Mexico today and you'll hear about their residence product. Families are traveling as multigenerational groups more than ever, particularly my client base, and they want space for the grandparents, nanny, and maybe another family. However, owning a resort residence (i.e., second-home ownership with a more alluring label) comes with maintenance and upkeep. Branded residences aim to straddle this yawning gap.
Branded residences, the private homes sold alongside luxury hotels under the hotel's flag, have been one of the fastest-growing segments in hospitality for decades. In their current form, they date to The Four Seasons Boston in 1985 and have now become central to how luxury hotels are built in the face of rising construction costs, high land prices, and inflation.
The sector has grown 180% over the last decade. There are now over 700 branded residences globally, with supply expected to double by 2030. Savills forecasts that 60 new brands will enter the space over the next five years. Marriott alone has 142 residences with 138 more in the pipeline. And hospitality outsiders Ferrari, Bentley, Fendi, Armani, and Bulgari have all entered the fray as well.
Why Developers Love This Model
As I noted in my Substack, The Upgrade, about historic renovation projects, building a luxury hotel is a terrible standalone investment. New construction costs upwards of $2 million per key today. So, what's a development group to do? They can't all head down to the bank with pockets bulging with cash like my grandfather used to do.
Enter: Residential sales. Developers often sell units before construction is complete, with deposits of up to 70% of the purchase price before handover. In essence, residence buyers are the ones financing the hotel.
Marriott's chief development officer for North American luxury brands said at the 2026 Americas Lodging Investment Summit: Half of Marriott's new luxury hotel signings now include a residential component because "luxury hotels are hard to build ... residential allows for higher returns."
Here's how the financing for branded residences works:
Hotel brands typically operate under a management agreement and collect fees of 2-3% of property value and rental income, without owning the asset directly. The developer takes the risk. The brand takes the fees and gets the marketing halo.
Additionally, branded residences command a significant premium. The average markup over comparable unbranded properties across the global market is around 33%, rising to 47% in some emerging markets and exceeding 90% in parts of Dubai.
The developer owns the building, not the brand. There is a licensing agreement in place, and that license can expire or be terminated. Management agreements with hotel brands typically run around 30 years. Buyers who purchased under a specific brand may find their property rebranded if the contract is not renewed.
The inherent tensions branded residences create: Four Seasons Hualalai
The downside of branded hotel residences appears in the tensions they create between the two classes they serve, residence owners and hotel guests. Often, the property GM is left to manage demand for the same resources (restaurant reservations, spa access, pool chairs) between the two groups.
The clearest case study of what happens when the interests of residence owners and hotel management diverge is a lesson from Four Seasons Hualalai on Hawaii's Kona coast. In 2015, roughly 75 homeowners filed suit after fees charged to their guests skyrocketed following a management restructuring that placed Four Seasons in charge of both the hotel and the broader resort community. During peak weeks, the "unaccompanied guest" fee rose to $250 per day per adult.
The plaintiffs argued this created a direct conflict of interest: the same company now managed both the hotel and the residential community with a financial incentive to push private renters toward the hotel instead. The resort responded that the fees were permitted under existing agreements. A hotel guest present at the time described what he called an "apartheid experience," referring to the visible friction between how residents and paying hotel guests were treated. That is an extreme characterization, but
the underlying dynamic is not unique to Hualalai.
How much do they cost?
Aman Beverly Hills starts at $20M with an average of $7,000/sq ft (a Southern California record), and the first tower is already 60% under contract. The developer explicitly states that "today's ultra-high-net-worth buyers seek certainty, homes that are resilient, private, and secure."
At Aman New York, one unit sold for $64M (up from the $51M the previous owner paid), another recently traded at close to $30M asking, and a Thailand-based investor purchased a unit for $20.7M.
Four Seasons ranges from roughly $1M in secondary markets to over $30M for oceanfront and ultra-prime urban residences, which explains why the averages look depressed when you combine them all.
Who is buying?
These sales are almost always structured through LLCs, family trusts, BVI (British Virgin Islands) companies, and Cayman entities precisely to obscure buyer identity.
Past data for sales of the residences north of $20M include American tech and finance wealth, Middle Eastern family offices (Saudi and UAE specifically), and Southeast Asian buyers (Singapore-based, often ethnic Chinese with Singaporean or Hong Kong residency). Russian buyers dropped off sharply following sanctions imposed after Putin’s full-scale invasion of Ukraine in 2022. Mainland Chinese buyers for US property have also pulled back due to capital controls.
The Aman New York resale market in late 2025 included a Thailand-based investor who bought for $20.7M and flipped it six months later, and an anonymous buyer who paid $35M in 2022 and recently listed at close to $30M.
The Offshore Money Issue
Branded residences sit at the intersection of two things that have historically attracted foreign capital seeking discretion: a globally recognized brand and high-value real estate in prime locations. Like a lot of high-value real estate in cities like New York and Vancouver, these properties attract foreign money thanks to their ownership opacity.
Brookings researchers studying ownership in New York, Miami, and Boston found that the probability of corporate ownership of a residential property exceeds 50% once it is valued at $10M, and exceeds 80% at $100M.
Shell companies are about twice as likely to be listed as owners of high-value properties. When researchers attempted to measure offshore ownership using only public data, it appeared to be nearly zero, attributing less than 0.3% of NYC real estate value to foreign jurisdictions. That near-zero figure is itself evidence of how effectively opacity works: shell companies registered domestically hide the true owners.
The 2022 DOJ seizure of Viktor Vekselberg's properties is a good example. The official register listed only a Panamanian shell company with a mailing address at Madison Square Garden. Vekselberg, subject to US sanctions for years, had held a $70M US property portfolio without detection until investigators pieced together the ownership chain.
A unit purchased through an LLC and placed in the hotel's rental program can generate income, appreciate in value, and remain legally opaque about its actual owner. Meanwhile, the brand provides legitimacy, and the LLC ownership structure provides cover.
While most buyers are wealthy people who love a hotel and want a turnkey second home without the headache of managing one, the structural features that make these properties appealing to legitimate buyers also make them attractive to those for whom enjoying the spa is a secondary (if that) consideration.
If You're Staying at a Hotel with Branded Residences
When you book a room at a property with a significant residence component, you are sharing the hotel's infrastructure with private owners who have their own service expectations and sense of priority. Anytime hotel management has to balance the expectations of owners who paid eight figures for their units against guests who paid $1,500 a night for a room, you may feel these tensions.
The better-designed developments address this with a clear separation between residential and hotel amenities. In projects where management hasn't thought this through, however, amenities may feel crowded, service may be inconsistent, and you may struggle to snag spa appointments and restaurant reservations.
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