Luxury Travel Trends for 2012
Friday, December 9th, 2011
I just spent a couple days at the Luxury Travel Expo in Las Vegas. This is an annual meet-up between high-performing travel agents and many of the companies catering to the upscale travel market.
In general, luxury travelers like you are still out and about as much as ever. After a dip in 2010, many of the agencies and tour companies are seeing big increases in business. There’s a bit more price resistance, sure, but those who travel well are still going. And they don’t want a routine trip. We may have all given up on our congress being able to accomplish virtually anything, but we’re getting on a plane anyway.
There are some interesting trends emerging, however, and a lot of them came out in a panel discussion with the heads of four upscale tour companies. One of them, Swain Tours, doesn’t cover Latin America, but the other three do to at least some extent: Tauck, Abercrombie & Kent, and Classic Vacations. Here’s what they had to say.
1) People with money see travel as a high priority.
For most high-end travelers, a vacation is going to happen, no matter what kind of cutbacks are going on in their life. “These people lead busy lives and what they care about most is connections,” says Daniel Maher of Tauck Tours. “They want to spend their time with friends and family on special experiences. They want good value, sure, but high quality, a special experience shared with the people they care about. That need for connections and experience is even growing even more quickly in this time when all this turmoil is happening.”
Scott Wiseman from Abercrombie and Kent agreed, saying that customers now don’t just talk about where they went: it’s more about what they experienced, what they did, who they came in contact with. “People are looking for truly special experiences.”
2) Multi-generational travel is big and getting bigger
I heard this a lot at the Adventure Travel Summit this year too. As people with means seek out those special experiences that will generate a lifetime of memories, they often want to share it with their whole extended family. Ian Swain of Swain Tours said, “It’s not uncommon now for us to get a group of 20 or 30 relatives traveling together.” So don’t worry that these tour companies or specialty agents can’t accommodate your request: they’re used to making sure the itinerary works for everyone, from 9-year-olds who need to be entertained to 90-year-olds with mobility issues.
3) Perception is still a problem for Mexico, but it’s getting better.
Greg Bernd of Classic Vacations says their Mexico business has really picked up the last three months as other negative news has captured the attention of the cable news networks. And perhaps people have gotten better at reading a map. (I went to Mexico presentation where they reminded everyone that Cabo San Lucas is 1,000 miles from the border and Cancun is 3,000.) He said, “There’s terrific new infrastructure, true luxury resorts, and service that is better than it has ever been. There’s incredible value in that marketplace.”
4) More destination weddings
Greg from Classic Vacations says last time he was at Grand Velas in the Riviera Maya of Mexico, “There were four weddings a day going on there.” All four panelists said they’re seeing an uptick in this business as people seek a special experience and in some cases—like in Mexico or Central America—it ends up being a better value for the people paying the bill.
5) You can save a bundle by following a crisis.
Scott from Abercrombie & Kent said, “On a slow weekend, CNN loves to cover the worst of what these countries has to offer.” They were having trouble getting people to go to Egypt after discounting 20 or 30%. Since A&K has 400+ employees though, the company wanted to keep guests coming. “When we lowered the price by half, the safety fears evaporated. We crossed the critical axis.” (With eyes and ears on the ground there, they know the real story and how to adapt to changing conditions—another reason to use an experienced operator.)
Nearly anyone who has gone to Mexico from the summer of 2008 onward has found terrific value. There were other opportunities in Honduras (post-coup), Chile (post-earthquake), and the mother of all opportunities in Latin America: Argentina 10 years ago after the financial meltdown. Do your homework and, if you’re worried about safety, go with a tour company that has a long history in that region. They’ll have the contacts to adapt and you’ll probably get a significant discount or lots of extra perks.
6) We’re sick of extra charges
Daniel from Tauck says, “Customers don’t want to be fooled or have other fees piled on top. They really resent it.” He says they can’t control the shady practices from airlines or resorts, but their company tries to quote prices that get all that in the mix from the beginning. They have worked out how to present a flat rate for airfare to Europe with all the fuel surcharges and other gotchas already folded in. “We try to give an all-inclusive price and then surprise to the upside with extras the guest wasn’t expecting, to be proactive and create those special memories.”
Greg from Classic Vacations agreed that airfare costs—and fuel surcharges—are one of the biggest obstacles for many of his customers. Flights to Hawaii, where they are very active, have increased dramatically in price. They’ve had some success offering airfare credits back with the booking of a certain number of nights at high-end hotels.
P.S. – As I listened to this last part about annoying fees that make customers resentful, I was typing on my laptop and pulled up the Wi-Fi screen for the convention center at Mandalay Bay Hotel in Vegas. Here’s a screen shot below. How does $525 a day for Wi-Fi sound, on top of a “resort fee”? That’s what I pay Verizon for almost an entire year of fiber optic cable internet access direct to my home…
