Co-Founder of The Abbi Agency, a digital engagement firm providing outreach strategies to travel destinations, tech companies and B2B brands.
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During nearly every panel discussion at every travel industry conference, someone says that the industry needs to stay very, very nimble. This time, the cliché is true.
The need for agility among marketers in the luxury-travel sector has never been as compelling as it will be during the next 18 months. And I believe those who play this right will reap an unparalleled opportunity to establish long-lived relationships with well-heeled consumers.
The luxury-travel sector was set to explode before the Covid-19 pandemic scrambled things. Allied Market Research estimates that the luxury market will grow at an 11% compounded annual clip over the next five years, and it predicts the segment will be the fastest-growing part of the travel business.
As the pandemic began to wane this spring, 37% of high-income millennials surveyed by TripAdvisor and Accenture said they expect to spend more than $5,000 on a vacation trip this year, and only 40% of them said that cost is a concern.
Two distinct categories of luxury travelers — which we’ll dive deeper into below — are driving growth in domestic markets this year, and savvy marketers are tailoring their messaging for each of them.
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On one hand, high-income travelers of all ages continue to be largely locked out of international travel this year because of Covid-19 restrictions. Looking for other options, they’re headed to domestic resort destinations.
That creates an opportunity for resorts and destinations to build relationships that will last beyond the re-opening of international travel. High-income travelers may come to Lake Tahoe this year because they can’t go to the Auvergne resorts of France. But where will they choose to go next summer, when either Lake Tahoe or Chamonix are options?
Travel marketers who are thinking carefully about how they establish and maintain long-lived relationships need to focus on carefully curated content that speaks directly to well-defined micro-audiences. Individualized experiences always have been highly important to traditional luxury travelers, and that extends to their desire for personalized marketing communications.
The second category of travelers driving this year’s luxury boom is composed of multi-generational groups looking to reconnect after the separations of the pandemic year.
Higher-income baby boomers are organizing family gatherings to make up for the year spent apart. They want only the best for their families, luxury that caters not only to adults but to children as well.
Nimble — there’s that word again — marketers are creating and communicating family-oriented experiences that deliver luxury for children, their parents and their grandparents. The resorts that capture multi-generational business this year are creating relationships that potentially could last decades as families establish traditions and return again and again.
All this plays out against a backdrop in which middle-income and upper-middle-income consumers increasingly mix a few luxury experiences into their vacation planning.
Unlike traditional high-end consumers, these part-time luxury travelers economize on some segments of their trips to splurge on others. They shop hard for airline tickets, buying seats in the back of the plane on a flight in the middle of the night, then make reservations to experience luxury hotel amenities. Or maybe they’ll spend three nights in a mid-market room and seek out superlative regional cuisine.
In the past, part-time luxury travel often was associated with special occasions such as important wedding anniversaries. It wasn’t uncommon for middle-income travelers to save for years for a single luxury travel experience.
But travel consumers now have a lot of cash after a year in which spending was constrained, and they are looking to upgrade their travel experiences. American Express finds that 61% of travel consumers expect to spend more than usual this year.
They’re likely to spend that cash on better dining, more retail purchases at destinations and upgraded accommodations at resort properties.
For marketers, these part-time luxury travelers often are an easier audience than traditional wealthy travelers.
Rose Dykins, an analyst with the travel technology company Amadeus, says that part-time luxury travelers generally bring less of a luxury mindset than traditional high-end travelers. They desire excellence in their travel experience, but they may have fewer specific expectations.
Part-time luxury travelers likely will be more open to suggestions from destination and hotel staff members. This provides an opportunity for luxury destinations to exceed expectations and create longstanding relationships with emerging high-value travelers.
At the same time, however, the opportunity to make suggestions creates substantial pressure to perform, especially if a special occasion inspired the part-time luxury travel. And the pressure increases substantially if the destination staff doesn’t know the travelers well, a likely possibility with first-time or very occasional visitors.
High-income consumers — and those who occasionally spend like high-income consumers — long have been coveted by destination marketers and others in the travel industry. Well-curated, sharply focused and individualized marketing initiatives in this year of transition will play a major role in creating new relationships and building loyalty from this most desirable of all demographics.
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Author: Abbi Whitaker, Forbes Councils Member
