Master Key is a publication by Anne Marie Brown of The Upgrade Weekly for paid subscribers. Master Key is an MBA-level look at the economics and mechanics of the travel and hospitality industry, from your favorite hospitality insider.

Travelers,

Festive, the week of Christmas and the week after, is the worst time to travel in the calendar year. It is also when hotels make an outsized portion of their revenue.

Most luxury travelers leave home that week because the kids are out of school, nothing much happens in the office, and the Christmas rush is over. If a school calendar does not dictate your dates, book any other week and stay home for this one. The numbers below explain why.

Demand keeps growing at an outsized pace

Legacy travel media keeps pointing to the rise of the “Fallcation” and other off-season trends, but demand for festive has kept growing at an outsized pace anyway. Here is the three-year picture from Virtuoso’s annual fall and festive reports:

Rates below are for Four Seasons Peninsula Papagayo, for the week before Christmas week (12/12-12/19), and the week after, which includes New Years. There’s a 33% increase in rates to travel during Festive.

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I grew up in a family that owned a hotel company, and I spent much of my childhood hanging out in hotels while I waited for my dad to finish up work in his office, traveling to hotels as I tagged along on sales calls, or staying in hotels for family trips.

After 18 years in the luxury travel industry, first running the experiential travel programs for Exclusive Resorts and Inspirato, and now as a luxury travel agency owner at Alpenglow Travel, I have stayed in some incredible properties around the world.

I am a planner. I plan my travel two to three years in advance, and I always know what my next big trips will be, both on my own and with our kids.

I divide my bucket list into two types of travel. The first category is experiences I want to have. The second is hotels I want to stay in.

I post hotels worth a stay and room reports on Substack in The Upgrade Weekly and in my map pin posts.

In this week’s Master Key, I am sharing the hotels on my bucket list, the ones I would absolutely go back to that belong on your list, and a crowd-sourced list from my subscriber chat of hospitality industry people and fellow hotel obsessives.

If you’d like to book any of these hotels, please reach out to me at AnneMarie@alpenglowtravel.com

Kisawa Sanctuary, Benguerra Island, Mozambique. I specialize in safaris and have been to Botswana five times, along with South Africa, Namibia, Tanzania, Kenya, and Rwanda. I have not made it to Mozambique yet. I like to add a few days of beach time to my clients’ itineraries after a safari so they have time to recover, and this is a spot I send clients often. Kisawa covers 300 hectares in the Bazaruto Archipelago, and the team built the residences using a patented 3D-printing technique alongside island artisans. That is barefoot luxury done right.

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Hello Upgrade Readers and Fellow Travelers -

I just spent five nights in Las Vegas for Virtuoso Travel Week with around 4,800 other people in the hospitality and travel industry. This year, I qualified for the executive registration, so my experience looked a bit different than it did ten years ago when I last attended.

Virtuoso Travel Week is a commitment. It’s an utterly exhausting series of meetings, coffees, lunches, cocktail parties, dinners, and suite invitations spread between the Bellagio, Aria, and Cosmopolitan in Las Vegas. I have managed to avoid going for the past few years, but with the rapid growth of our new agency, Alpengow Travel, I thought it was time to make a return trip to the air conditioned halls of the Bellagio.

Travel advisors typically spend a few hours each day participating in “tracks,” which are a series of 8-10 minute long speed dating appointments with hotel sales directors, DMCs (destination management companies), wholesalers, representative groups, and tourism boards.

In between, we are invited to hosted events by hotels and suppliers that we hustle to, regretting wearing heels and wondering when we will have time to actually answer our clients’ emails in between it all. My days began with coffee meetings at 7am and ended with hosted dinners around 11pm.

Why do we put ourselves through this?

The short answer is that industry is changing.

We have advisors widely adopting AI, and some that are eschewing it completely. We have clients utilizing AI, agencies using it for booking support, general concern about whether it will impact our careers in a negative way, host agencies developing their own technology, and new entrants to our tech stack every day.

We are seeing the rise of a new class of celebrity advisor, with those running Reddit forums and growing massive social media platforms on TikTok and Instagram, like TravelWithLivii, outpacing legacy advisors and driving sales volume the industry has never seen before.

We have disrupters like Fora adding thousands of new advisors to the mix at a record pace, a travel economy that is driving rates to the moon, and capital structures that are changing the mix of what makes sense for a new hotel.

The conversations that take place over the week of VTW events are where we can gain a grasp of how hotels, advisors, and executives are thinking about what comes next.

Additionally, there is also absolutely no shortage of new hotels (and old ones) that I want to learn about. Being a hospitality obsessive, I feel like a kid in a candy store collecting a rolodex of hotels to add to my list. I geek out over planned renovations, new openings, and offers to share.

This week, I’m sharing my takeaways from the discussions shaping the luxury travel industry, what we are concerned about, what we are seeing, as well as hotels I have on my list of places I need to visit.

The luxury travel industry shows no sign of slowing down. Virtuoso reports sales pacing 20%+ higher YoY, hotel rates climbing, and forward bookings surging one to two years out.

People are wondering where the price ceiling is. According to Doug Gollan from Forbes reporting on the conference, hotel rates now average over $1,600/night per Virtuoso data, up 37% YoY for $1,500+ nightly bookings, with 47% growth in future bookings by clients spending $50,000+ per trip. (forbes.com/sites/douggo…)

Travelers still think pricing is the same as 2019.

$20,000 is now table stakes for a four-star week for two in most European cities. $2,000 is the new entry level room ADR for luxury hotels. However, we are still receiving requests for a five star trip at a 3 star budget.

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Matt is one of the smartest people I know - that’s why I married him. We’ve been together since 2004, and have known each other since we were 9 and 12, when we were neighbors. He has a lifetime of investing experience, and was previously a managing director at Oppenheimer Funds. When our daughter was born, we made the decision for him to leave his finance career and start managing an investment fund we set up - Colorado Ohana Ventures. We primarily invest in real estate, hotels, VC, and PE. After our hospitality sub asset class did not perform over the past ten years as we hoped, I asked him to write this article about what he thinks happened. - Anne Marie

I’ve spent over two decades in the investment industry, moving from distribution, to buy-side equities and fixed income, to covering private investments and more recently concentrating on 1031 exchanges. Around 10 years ago, Anne Marie and I carved out a portion of our own money that we would use to focus on real estate investments and private investments overall. It’s been a wild ride. We’ve been able to rotate through some decent sub-asset classes and invest with great partners along the way. Sometimes we’ve hit strong macro tailwinds, and sometimes headwinds.

Anne Marie asked me to write an article on our experience being an LP (limited partner) in the hospitality sub-asset class and document some lessons from the last decade. This is my attempt to summarize those.

Top line numbers seem good. Hotel RevPAR (revenue per available room) and ADRs (average daily rates) hit record highs in 2024. Last year’s occupancy rate is softer than posted records in 2019, but certainly up from the lows during covid. NCREIF, a basic indicator for real estate investment performance, has posted a 7.2% annualized performance for the last 5 years. Pretty weak when compared to the equity markets, but nothing to complain about.

I think the first thing that is important to know when comparing two things is the makeup of those two things being compared. Primarily, the NCREIF is a benchmark of stabilized, operating investment properties that are unlevered. Unlevered means they don’t have debt (a mortgage) and are stabilized (not in lease-up or in post construction marketing phase). Therefore, this is a pretty bad comparison to how a hotel developer (or any real estate developer) would operate. It might be helpful to walk through the development structure and timeline.

I’m going to over simplify this as much as possible, so first off, there are generally two investment groups and a lender, the General Partner and the Limited Partners (GP/LP).

The lender will finance anywhere from 50-80% of a deal, but usually sit around 70%. The GP is the one putting the deal together, they will find a site and work with lawyers to get permits. They will contract with a design team and find a general contractor to build the project. They will find financing from a bank or other lender. And ultimately they find other investors to join in, the LPs. For all this work, they are usually compensated on the backend by taking a greater percentage of the sale or refinance. Usually they put up 10% of the equity (so 3-5% of the whole deal), but often they can get anywhere from 20-50% from a sale or refinancing. The LPs get the majority, but they also contribute most of the equity. Along the way they also accrue 6-8% per year as a ‘hurdle’ or ‘pref’ rate.

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I grew up in a family that used a travel agent. I was fascinated with our near seamless trips, glossy branded luggage tags, and detailed itineraries in which we were whisked around in private transfers and stayed in incredible hotels in Ireland or New Zealand.

When I pitched the idea of a travel agency that sat within Inspirato, I stayed late in the office creating the business case behind it, running the numbers like I was back in graduate school. Inspirato had what every single luxury advisor wanted – a dedicated membership group who loved to travel. They just weren’t capturing that travel spend outside of the small group experiences I ran and the homes members stayed in. I called the concept ‘Bespoke.’

The executive team was hesitant. “Aren’t travel agents kind of…extinct?” They asked. “How much will this cost to launch?” “How will you vet suppliers?” “Can you handle the volume without hiring anyone?” I showed my staffing model, and explained what DMCs (destination management companies) were. I proposed that we could sell $1M in travel bookings in the first year without hiring additional people. They gave me green light, and just like that, I built my first travel agency.

I knew the group travel world intimately after running small group trips and chartered cruises for 8 years between my time Exclusive Resorts and Inspirato. Beyond that, I had a lot to learn about the travel agency world. Today, I own a travel agency, Alpenglow Travel, that is quickly rising through the ranks of Coastline’s “Top Talent.”

If the term “travel agent” conjures images of a lady in her 70’s named Maude hammering away at a keyboard in DOS code to book your flight while smoking a cigarette at her kitchen table, you aren’t alone. With the advent of OTA’s (online travel agencies) such as Booking.com and Expedia in the early 2000’s, major publications sounded the death knell for travel advisors, postulating that they would go the way of the Dodo bird. However, as with most things that enter the mass market, there has been a backlash to plethora of fake reviews and the sheer, unnavigable volume of information out there.

Newly minted millionaires are traveling like never before, and they want a trusted advisor to help them wade through the fluff and give them actual advice.

The travel agent industry has had one of the more remarkable comebacks in recent business history. After a 40% collapse in global bookings in 2020 during the pandemic, agencies recovered fast and blew past their previous highs. U.S. travel agency gross bookings surged 102% in 2022, followed by another 28% gain in 2023, reaching $109.7 billion, a record at the time.^[1] Agency sales rose an additional 9% in both 2024 and 2025, with leisure travel accounting for 65% of that growth.^[1] The overall travel industry recovered to about 136% of 2019 sales by mid-2024. Travel agencies, as a category, tracked at more than double that pace.^[2]

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