The key for luxury travel marketers in the new values economy isn't about charging less, but giving the affluent travelers more.
Stevens, PA (PRWEB) July 24, 2014
Even before the Gaza-Israel conflict caused the U.S. to halt flights to the region and the tragedy of Malaysia flight 17 shot down by missiles, the travel market hit a rough patch. Americans spent 1% less on travel during the first quarter 2014 than in 4Q2013, according to the U.S. Bureau of Economic Analysis, which compiles statistics on personal consumption for the government. And a new report from Unity Marketing warns that a malaise is threatening the high-end luxury travel market as well.
Tapping six years of market research data, Unity Marketing has released a new study entitled, The Luxury Travel Report: The Ultimate Guide to Winning the Hearts & Dollars of Today's Affluent Traveler. The report tracks luxury travel trends since 2008 and finds that at the end of 2013, the market was heading toward its lowest point since the recession in 2009. Click here to view a chart illustrating the trajectory of affluent travel demand and spending, based upon Unity Marketing’s quarterly surveys over the past six years.
“Travel and hospitality marketers are facing many new marketing challenges - global unrest, a rapidly expanding range of competitive luxury travel offerings and new internet-powered disruptive competitors -- not the least of which is a new values-oriented consumer mindset,” Pam Danziger, president of Unity Marketing and lead researcher in the new study, says. "Marketers can use the research-based insights in this study to get a clearer understanding of the competitive landscape and the emotional makeup of today's moneyed traveler."
Affluents enter a 'season of austerity’ and what it means for businesses that rely on high-end travelers.
While the affluent travelers have recovered financially from the recession, they learned new ways of cost-effective shopping. As a result, affluents have entered a new ‘season of austerity,’ characterized by frugality, economy and thrift. Today’s affluent travelers are looking for the best value for the money. The research shows they are trading down on experiences that are not as important (i.e. fly coach to their destination), in favor of indulging on those experiences that mean the most to them (i.e. staying in five-star luxury once they arrive).
Danziger says, “Travel marketers can thrive in this ‘season of austerity’ if they deliver on the specialized needs and desires of the discerning luxury travelers and give them the most bang for their travel ‘bucks.’ That doesn't mean charging less, but delivering more. Many different companies studied in the report found success without resorting to discounts."
Danziger points to AKA Hotel Residences as a successful competitor that identified ‘white space’ in the hospitality market for high-end extended stay accommodations. Starting with facilities in Philadelphia and NYC, the company has followed customer demand to open in Los Angeles, Washington, DC and London. Recently AKA added to the mix a very special and unique experience for its guests -- a luxury-equipped Airstream travel trailer for those who want to venture off the beaten track from the luxury mobile suite’s home base in Beverly Hills.
The Luxury Travel Report digs deeply into the spending habits and preferences of high-net-worth (HNW), ultra-affluents (2%) and high-earners-not-rich-yet (HENRY) individuals. The report reveals:
- Who has disposable income for travel expenses?
- How does today's traveler define luxury?
- What are the top 10 destinations for affluent travelers?
- How do affluents – HNW, Ultras & HENRYs -- spend their money while traveling?
- How can you build a relationship with the next generation of Millennial travelers?
This report includes eye-opening statistics and detailed case studies to demonstrate how a hospitality firm or travel destination can thrive in today's value-oriented luxury travel market.
"Success in luxury travel marketing begins with understanding the needs and desires of luxury travelers. This new report gives marketers the edge on the competition," Danziger concludes.
More about the Luxury Travel Report & Its Methodology
Unity Marketing surveys luxury consumers every three months about their travel experiences, spending, attitudes and brand preferences. Affluent luxury consumers are defined by high-income (top 20% based upon income starting at about $100,000) and purchases of one of any 21 different categories of high-end/luxury good or services, including Luxury Travel.
This report includes the results of six continuous years of quarterly survey results, from 2008-2013. For example, in 2013 n-5,001 affluent luxury consumers were surveyed, of which n=1,374 were luxury travelers in the study period.
The survey also over samples ultra-affluents ($250,000+), so they weigh more heavily in the final analysis. In a natural distribution ultra-affluents would represent 10-12% of total; in our sample 33% of total sample are ultra-affluents. These ultra-affluents make up the large majority of HNW consumers included in the survey, as well – typically making up 30% of so of the survey sample.
Plus, the report includes a deep dive into luxury travel trends, covering planned travel experiences, as well as past experiences, conducted in early 2013 among a total of n=1,309 affluents.
About Pam Danziger & Unity Marketing
Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer. She is president of Unity Marketing, a marketing consulting firm she founded in 1992. Pam received the Global Luxury Award for top luxury industry achievers presented at the Global Luxury Forum in 2007 by Harper's Bazaar. Luxury Daily named Pam to its list of "Women to Watch in 2013." She is a member of Jim Blasingame: The Small Business Advocate’s Brain Trust and a contributing columnist to The Robin Report.
Pam's latest book is Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury(Paramount Market Publishing, 2011). Her other books include Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006; Let Them Eat Cake: Marketing Luxury to the Masses-as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).