Many of us around the developed world have watched as luxury travel appears to have become, in many ways, the domain of the young over the last twenty years.
Luxury, in the past, was associated with wealth, experience, something older people did or bought or experienced. The Ritz Carltons, the Bentleys, the Rothschild vintages and the Longines’, all of these symbolic brands, the very best money can buy, were firmly in the domain of successful parents and grandparents, and luxury was a synonym for opulence.
After that came the all-important concept of the travelers wanting an experience, but we’ve moved even beyond that now, and it is necessary for all selling “luxury” to evolve faster than ever before, not only because luxury is desired by millennials and post-millennials (generation Z), but also because the very foundations of what is perceived as luxury have completely shifted, and the speed of change is exponential.
How has luxury changed?
Except for, perhaps, ultra high-net worth luxury travelers seeking the best of everything, there’s a clear desire among high spenders to mix traditional luxury delivery with artisanal, craft, DIY, and singularly local experiences that deliver a strong sense of place and uncontrived engagement with residents. High-net worth travelers who don’t necessarily always want to travel exclusively in a luxury bubble, and aspirational upscale travelers splurging for special occasions, are hungry for encounters and activities via which they can feel more personally fulfilled.
Greg Oates of Skift summarizes this shift perfectly, “Many of the trends today in the luxury market are pointing toward one overarching theme: personalized fulfillment. At a macro level, demand is growing for the accumulation of travel memories drawn from transformative moments that resonate deeply with the individual traveler’s ideal of personal fulfillment, and his or her best aspirational version of themselves.”
Aren’t experiences the new luxury?
Time, space, wealth, happiness or even experiences then, are not the ultimate luxury. They’re too vague and overused. Greg nails it in his insightful article when he says, “Fulfillment, though, speaks to our innermost motivations, and our awareness and alignment of our inner and exterior contexts. It speaks to who we are, or more accurately, who we want to be.
He continues, “As an analogy, the luxury needle is moving from Maslow’s second hierarchical need, “Esteem,” where consumer luxury has traditionally lived, to the top spot: “Self-determination,” based on realizing one’s full potential. Also, the commoditization of experiential luxury travel, and the fatigue that engenders when everything is an experience these days, is driving more nuanced discussion around what luxury travelers really want, as individuals.”
Why the change and what is key?
Skift research, prepared for the International Luxury Travel Market this year, showed that the number one growing priority for luxury travelers is: “Experiences that show me a new perspective of the world.” In the same report, the top three luxury travel trends for 2017, from the perspective of shifting luxury consumer expectations, are: meaningfulness, simplicity, and transformation.
In light of world events, such as the rise of terrorism and neo-nationalism, there’s a growing demand among luxury travelers for more meaningful experiences, simple user experience, and opportunities for personal growth.
Furthermore, the evolution of technology and design and people’s access to knowledge and the new way in which we build our personal brands are all key components of our need for personal fulfillment.
Delivering on helping people realize their potential is easier said than done but it seems clear that personalization is key.
Conclusions on the meaning of modern luxury travel
Following are some relevant highlights and conclusions from a seminar we attended in August 2017 on luxury travel hosted by Skift and travel consulting firm L.E.K:
1. The meaning and delivery of modern luxury travel is personal
The classic definition of “opulence” will not resonate with many modern luxury travelers
Top definitions from focus groups: Comfortable, Beautiful, Memorable, Peaceful, Exclusive, Personalized
2. Greater options are powering personalized luxury
Travelers demand choice to “tune” the experience to their own personal version of luxury
Luxury perceived as escapist, enviable and experience-oriented (with service a given)
3. Modern luxury travel is now #1 channel for discretionary spending
The market for luxury has never been broader or more relevant
4. The younger the consumer, the more they favour indulgence through travel
44% boomers vs 64% millennials
5. Luxury travel is increasingly accessible since it’s not necessarily the most expensive option anymore
A broader set if industry suppliers can participate in luxury spend
6. New luxury alternatives offer comfort without opulence
Lifestyle brands, private rentals vs Five-star hotels
Rising star chefs, undiscovered gems vs Michelin starred restaurants
Authentic, local experiences i.e. Airbnb Trips vs Resort-sponsored excursions
International premium economy vs First class cabin
Uber Select vs Chauffeur service
7. Social and prestige aspects of travel are most important to millennials
Suppliers need to consider how their experiences translate in a social media environment
8. Travelers willing to drive up their spend on accommodation more than any other travel element
i.e. accommodation location and quality vs better plane seat. Good news for hotels
9. Online reviews and travel blogs 8% more influential than 5 years ago
Friends, family and professional recommendations are 7% less influential
10. The signaling power of brands has not diminished
Having a strong and clear brand message remains essential for both incumbent and new players
Younger consumers are more brand conscious than boomers when it come to luxury spending
11. Modern luxury must offer convenience without compromising exclusivity
Effortless + seamless without seeming commonplace
Precious, rare and emotionally meaningful
12. Millennials are increasingly the drivers behind luxury travel demand
But the trends are being adopted broadly by all consumers
Millennials spend more per trip despite having less discretionary income than Gen X