A recent roundtable with senior management of the six Luxury Alliance member companies examined trends in the luxury travel market. In attendance were Paul McManus, President & CEO, The Leading Hotels of the World, Ltd., Marshall Calder, Senior VP, Marketing, The Leading Hotels of the World, Ltd., Jacques-Olivier Chauvin, Directeur Genéral, CEO, Relais & Chateaux, Alistair Ballantine, Director of Sales and Marketing — The Americas, Orient-Express Trains & Cruises, Albert Peter, CEO, Silversea Cruises, Bill Smith, Senior VP Sales and Marketing, Crystal Cruises, and Dennis Pinto, Managing Director, Micato Safaris, an Adventure Collection company.
Here are some highlights from this groundbreaking discussion:
Defining Luxury: A Blur Around the Edges
Luxury in the twenty-first century has a wider reach than ever before. Household income and investable assets represent only one benchmark in consumer spending power; and influences on spending patterns now include generational and cultural diversity, financial success on the coattails of modest origins, the ever-increasing pressures of life in the fast lane, and word-of-mouth recommendations.
Luxury Travel: A Booming Industry in a Volatile Global Economy
The luxury travel market is not only robust but growing at a remarkable pace. The year 2005 garnered extraordinary revenues, and global growth at a rate of 7 to 10 percent is projected for 2006. Luxury Alliance members agree that the period through 2010 looks encouragingly strong New hotels and cruise ships are under construction or on the drawing board; mergers and acquisitions are in progress or under discussion.
Demand for a Rare and Authentic Experience: Diversity Is Key
Product diversity is noted as a key component in luxury travel. The charter of a fully crewed yacht for a Mediterranean honeymoon is readily available, as is a fifty-bedroom castle for a family reunion in the Scottish Highlands. Adventure travel may include extreme sports, with butler and spa services at the end of the day. As consumer demand escalates for travel with a rare and authentic experience built in, and the competition to meet that demand intensifies, providers will be increasingly under pressure to re-create their product.
Shorter Trips with Increased Frequency: Making Every Minute Count
With seasonality no longer an obstacle in vacation planning, the trend for increased frequency in travel is expected to continue, and a preference for shorter trips will establish a pattern among travelers stressed by a busy lifestyle. These shorter trips are likely to be progressively more action-packed for maximum fulfillment.
A Focus on Togetherness: New and Future in Group Travel
There is a growing desire for connecting with family and need to become friends. Wise travel providers will build their offerings for family groups, as trips become more frequent, and will become progressively more creative in designing programs for multi-generational group travel to compete for a share of this important growth market. The emerging trend of all-women group travel will make a progressively bigger impact in the more creative luxury sector; and the concept of reunions to reconnect with family, friends or colleagues on distant shores will boost an ongoing rise in intercontinental travel.
Planning Made Easy: Simplicity and Speed in Booking a Trip
Ongoing expansion of the distribution system continues to facilitate bookings, and increased consumer skills in navigating the Web are generating a huge upswing in online reservations. Cruise travel remains the exception, largely because of the complex range of activities that factor in a cruise vacation; however, a move towards facilitating online reservations in this area is imminent.
In the Know: The Rise of Connoisseurship
The pursuit of knowledge (or even expert status) has grown to be a high factor in determining vacation choices and will have tremendous impact on future leisure travel. Planning will frequently focus on education and growth, with a range of favored topics for exploration that includes art and architecture, landscape gardening, and cuisine. Special-interest travel that provides a transforming experience rather than a hedonistic indulgence and empowering travelers to return home with a sense of accomplishment and pride in achievement. Prestige is a powerful emotional driver, and bragging rights are often a part of the equation.
The Wellness Factor: Spa, Seclusion and Spiritualism
Location choices that will support contemplation, reflection and renewal in a sanctuary-style environment will be increasingly popular. Rigorous wellness programs have taken the spa concept far beyond beauty and pampering, expanding the health focus to include on-site physical check-ups and alternative medical treatments, both rapidly growing in popularity. Also expanding is the overall size of spas, as the roster of services grows progressively more complex and the pursuit of stress relief boosts the need for more individual treatment rooms.
Service Extraordinaire: The Demands of Recognition
A growing take-care-of-me attitude in the quintessential luxury consumer demands flawless service and flexibility by providers. In the highest luxury bracket, a personal butler for each individual guest is now the norm rather than the exception with leading hospitality companies, significantly boosting the staff-to-guest ratio. Recognition through highly personalized, intuitive service has become a prerequisite in the luxury segment, and is noted by Luxury Alliance members as a key element in designing the vacation experience of the future.
Philanthropy and Concern for the Environment
Enhanced wealth has in turn triggered a move towards philanthropy. More travelers are now returning from vacations with the added achievement of more for having invested in a worthy cause along the way. Also referenced was a recent Luxury Alliance member survey that indicates travelers are willing to spend twenty to 25% more on a trip if its design supports environmental conservation.
Founded in 2000, the Luxury Alliance is a strategic marketing partnership of preeminent brands that individually hold leadership positions in the hospitality industry and collectively set the standard for the ultimate in luxury travel. The two original founding members, The Leading Hotels of the World and Relais & Chateaux, have subsequently been joined by Orient-Express Trains & Cruises, Silversea Cruises, Crystal Cruises and Adventure Collection.