Are Hotels Still the Right Investment for Wine Estates?

©Calice Hospitality / Six Senses

For a long time, building a hotel seemed the natural culmination of any ambitious wine tourism strategy. From the grand estates of Burgundy, Champagne, and Bordeaux, to Napa Valley, Tuscany, and South Africa, the hotel gradually became the symbol of moving upmarket: extending visitors' stays, diversifying revenue streams, strengthening brand image, and transforming the estate into a destination in its own right. Even more so, in the collective imagination, it became the sign that an estate had "made it." As if opening a hotel constituted the ultimate stage of successful development, proof that a vineyard had reached a new level and joined the ranks of major wine tourism destinations. This evolution can be explained. Over the past twenty years, the rise of wine tourism has profoundly transformed visitors' expectations.

It was no longer simply about coming to taste wine, but about enjoying a complete, immersive experience, where accommodation seemed to fit in perfectly. The success of a few iconic estates helped transform the hotel into a true symbol of prestige , sometimes even more so than a carefully considered strategic choice. However, the context has changed dramatically. Soaring construction costs, rising interest rates, the increasing complexity of hotel operations, evolving traveler expectations, and the emergence of more flexible accommodation models... The conditions that fueled this dynamic are no longer the same.

The question is therefore no longer simply whether to build a hotel. It is to determine whether a hotel still constitutes the most relevant response to the strategy and ambitions of a wine estate.

1. Why did the hotel become the benchmark model?

Before questioning the relevance of this model today, it is essential to understand why it became so obvious. For nearly two decades, building a hotel followed a particularly coherent economic, tourism, and marketing logic.

A natural evolution of wine tourism

Wine tourism has undergone a profound transformation. Long focused on cellar visits and tastings, it has gradually expanded to include a range of experiences: exploring landscapes, gastronomy, wellness, culture, events, outdoor activities, and more. In this context, accommodation has emerged as a natural extension of this move upmarket . It allows visitors to transform a visit of a few hours into a genuine stay, offering them more time to discover the vineyard, the surrounding area, and often, to enjoy a wider range of services.

For the estates, the benefits seemed obvious:

• extend the average length of stay;

• diversify income sources;

• increase the average spend per visitor;

• strengthen wine sales through a longer and more qualitative relationship;

• to build customer loyalty among high-spending clients.

The hotel thus became much more than just accommodation: it fully participated in the creation of value for the estate.

From strategic tool to symbol of success

Over the years, certain iconic projects have significantly shaped perceptions. They demonstrated that a wine estate could become an international destination, where wine was no longer the sole reason for visiting, but the central element of a comprehensive experience. The hotel then gradually established itself as a marker of prestige . For many owners, it represented a new stage of development, almost a necessary step towards the high-end market.

This shift is significant because what was initially a strategic tool has sometimes become an end in itself. The presence of a hotel could be perceived as a sign of success, regardless of the project's economic viability or its consistency with the estate's identity. However, a model that works for a major international vineyard, enjoying high profile and consistent visitor numbers, is not necessarily transferable to all regions or all estates. It is precisely this apparent certainty that now needs to be re-examined.

2. A model now facing new realities

The success of hotels within wine estates should not obscure the reality: the conditions that fostered their development have profoundly changed . In just a few years, economic balances, operational constraints, and customer expectations have been transformed. In this new context, building a hotel remains a relevant option for some estates. However, this decision now warrants a much more thorough analysis than before.

Increasingly heavy investments

The rise in construction costs, the increase in interest rates, new environmental requirements and stricter regulations have significantly increased the cost of hotel projects, particularly in France. Added to this are the constraints specific to wine estates. Many vineyards wish to renovate historic buildings (manor houses, former wine cellars, outbuildings, or listed buildings), the renovation of which often proves more complex and expensive than traditional construction.

These investments require significant capital over the long term, with returns on investment sometimes difficult to secure. Unlike a property located in the heart of a major city or tourist destination that operates year-round, a vineyard is often subject to seasonal occupancy , with peak periods concentrated in just a few months. This reality directly impacts occupancy rates and therefore the project's financial viability.

The hotel industry is a profession in its own right.

Building a hotel is an investment decision. Running it sustainably is a completely different business. The hotel industry requires specific skills in human resources management, marketing, distribution, revenue management, food and beverage, maintenance, customer relations, and day-to-day operations. These skills extend far beyond the core business of a winery.

However, the recruitment difficulties currently facing the entire hospitality sector make this equation even more complex. Attracting, training, and retaining qualified teams is now a major challenge, particularly in rural areas where employment pressures are sometimes very high. For some sectors, this diversification represents a tremendous opportunity for growth. For others, it can gradually become a source of complexity that consumes an increasing share of human, financial, and managerial resources.

When the hotel becomes the center of gravity

Another question can be cautiously posed: At what point does the hotel cease to be a service to the resort and become its primary business? As a hotel grows, it can quickly absorb the bulk of investments, recruitment, operational concerns, and financial decisions. The risk is obviously not inevitable, but it does exist. The winemaking project, which was the initial focus, may then gradually become secondary. This evolution is not necessarily problematic if it is fully embraced. Some groups have even chosen to become true players in the hospitality industry, with wine as one of the pillars of their identity. However, when this transformation has not been anticipated, it can create a disconnect between the estate's original vision and the day-to-day realities of its operation.

Visitors with more diverse expectations

Finally, customer expectations are also evolving. Travelers still seek quality services, but their aspirations now extend far beyond simply finding upscale accommodations. They want more personalized experiences, to meet the men and women who shape the vineyards, to understand the landscapes, discover the expertise, and explore a region in its entirety. They also favor more flexible itineraries, combining several stops, several estates, and different types of accommodation during a single trip. In this context, the hotel is no longer the only way to extend the wine tourism experience . It remains a possible option, but it is no longer the only one. It is precisely this shift in perspective that prompts us to question the relevance of certain forms of development.

3. What role should hosting play in the domain strategy?

At this stage, the question isn't so much whether to continue building hotels in the vineyard, but rather which accommodation solution best suits the estate's project. While the goal is indeed to extend the visitor experience, a hotel is currently just one option among many . The choice depends primarily on the desired positioning, the target clientele, investment capacity, available expertise, and the ambition of the project. In other words, accommodation is not an end in itself. It is a tool serving a brand strategy, a business model, and a customer experience.

The boutique hotel: creating a true destination

For certain sectors, the hotel model remains entirely relevant. When integrated into a comprehensive project combining restaurants, wine tourism experiences, wellness, gastronomy, culture, or events, it helps transform the estate into a true destination. Projects like the fabulous Marqués de Riscal hotel, designed by Frank Gehry, or the Babylonstoren Farm Hotel in South Africa perfectly illustrate this approach. In both cases, the hotel is not simply a place to stay: it is an integral part of an ecosystem where wine, gastronomy, gardens, wellness, architecture, and landscape combine to create a cohesive and distinctive experience. The hotel then becomes a cornerstone of a comprehensive hospitality strategy, capable of attracting an international clientele and sustainably enhancing the estate's reputation.

More intimate formats to extend the stay

However, not all estates aspire to become hotel operators. For many, a few suites , rooms converted from an existing building , or a private house suitable for self-catering already allow visitors to extend their experience in excellent conditions, with significantly less investment and fewer operational constraints. Renovating a manor house, a former wine cellar, or a heritage building often provides a particularly relevant solution. Beyond economic optimization, this approach contributes to the enhancement of the built heritage and lends the stay an authenticity that is difficult to replicate in new construction. In these configurations, the accommodation capacity remains intentionally limited. The goal is not to become a hotel, but to offer a few exceptional overnight stays perfectly aligned with the estate's identity.

Focus on partnerships rather than developing alone

For a long time, building a hotel almost always meant designing, financing, operating, and marketing it oneself. This model remains relevant in some sectors, but it is no longer the only one. Today, the hotel industry offers a wide variety of partnership models , allowing for the distribution of investments, the sharing of risks, and access to expertise that the sector doesn't always possess internally, particularly with the rise of rural tourism, strengthened in the post-Covid context. Depending on the size and ambitions of the project, several solutions can be considered.

• The most ambitious projects may call upon a specialized hotel operator , responsible for ensuring all or part of the operation of the establishment under a management contract.

• For smaller projects, it is also possible to join a network through affiliation or franchising , without losing the brand's identity. Brands like Best Western , The Originals , Logis Hôtels , and Teritoria allow independent establishments to benefit from a central reservation system, commercial reach, a loyalty program, marketing tools, and operational support, all while maintaining their unique character.

• Other estates are choosing to retain ownership of their property while entrusting its day-to-day operations to a specialized management company , allowing them to focus on their core business: viticulture, wines, and wine tourism. This trend is particularly attractive for medium-sized estates, which may not have the human resources or expertise to run a hotel on their own.

Between the owner-operator model and that of the simple investor, there is now a whole range of solutions. The challenge is therefore no longer to do everything oneself, but to choose the operating method that is most consistent with the ambitions of the project, the available skills and the financial resources that can be mobilized.

Lightweight accommodations and new forms of immersion

Innovation is also impacting the types of accommodation themselves. Where the reflex was once to build a hotel, many estates are now exploring lighter, more flexible solutions that are often better integrated into their environment. Lodges nestled among vineyards, cabins, glamping, landscaped pavilions , and tiny houses offer an immersive experience with more controlled investments, faster implementation, and a generally smaller impact on the landscape. The development of concepts like Unyoked , which deploys designer tiny houses in the heart of natural spaces, particularly in Australia, perfectly illustrates this evolution. The success of this model relies less on the level of hotel service than on the quality of the experience offered: slowing down, reconnecting with nature, and enjoying a break immersed in the landscape.

In the wine-growing context, these formats allow the vineyard itself to be placed at the heart of the stay. Visitors no longer simply come to sleep near the vines; they literally live within the landscape. As we already mentioned in our article on unusual accommodations in vineyards, these solutions are obviously not a one-size-fits-all answer. Nevertheless, they reflect a fundamental shift: the value of accommodation no longer lies solely in its level of comfort or capacity, but in the emotion, the landscape, and the story it allows guests to experience. Ultimately, it is no longer so much the building that makes the difference as the experience it makes possible .

* Our expert opinion at CALICE Hospitality and Wines

The sectors that will succeed tomorrow won't necessarily be those that build the most beautiful hotels. They will be those that can offer the form of hospitality most consistent with their identity, their region, and the expectations of their visitors . For some, this answer will indeed take the form of a hotel. For others, it will be based on bed and breakfasts with an appropriate level of service, a partnership with a tour operator, a network of local accommodations, or more immersive formats.

Ultimately, it's not copying a well-established hotel-vineyard model that will make history, but rather building the concept that will create the most value, because the success of a wine tourism project isn't measured by the number of rooms it offers. It's measured by its ability to make people want to stay... and above all, to return.

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Before building your hotel, here are 5 strategic questions to ask yourself.

Building a hotel is often the most significant investment a wine estate can make.

1. Why do we want to offer accommodation?

Is it about extending the length of stay? Strengthening the brand? Diversifying revenue streams? Responding to existing demand? The answers will not necessarily lead to the same model.

2. Do our visitors actually want to sleep on the property?

Expectations vary greatly depending on the customer base, the region, and the season. Market research remains essential before any investment.

3. Are we ready to become hoteliers?

Building an establishment is one thing. Marketing it, recruiting, managing teams, maintaining a high level of service and ensuring its profitability is another.

4. Is there a more suitable solution?

Bed and breakfasts, light accommodation, rehabilitation of existing heritage, partnership with an operator or affiliation can sometimes meet the same objectives with a more controlled level of risk.

5. Does this investment actually strengthen our project?

A hotel should extend the identity of the estate, not redefine it. If it becomes the heart of the project while the wine is merely the backdrop, it is probably time to reconsider the issue.

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To learn more and benefit from personalized support to determine the feasibility of your project, visit www.calicehospitality.com