Affluent Consumers Prefer Experiences To Worldly Goodsby Cheryl Rosen /
Luxury customers are moving to new frontiers like private yachting. Photo: Myrabella
Unity Marketing is just finishing up its quarterly Affluent Consumer Survey—and as she looks at the data, president Pam Danziger sees a definite shift toward wanting to experience travel rather than wanting to accumulate things.
Unity’s latest data shows that a whopping 93% of affluent U.S. consumers (the top 20% of the population) bought “an experiential luxury” in the second quarter. Almost half of all affluents (46%) bought travel between April and June—and that’s twice as many as went to a salon or a spa, almost three times as many as bought jewelry, and almost as many as went to a restaurant (54%).
“We measure demand for luxury goods and services among affluents, and we also measure their spending in categories, such as experiential luxury, personal luxury and home luxury. Overall, luxury travel demand was the highest of all categories,” Danziger said. “And when I look at the travel data relative to categories like luxury goods, it shows a real pivot away from more material goods toward more experiences, as demand is so much stronger in the travel component. That’s definitely the biggest trend.”
Of course it has been a difficult couple of months in the travel industry, with terrorists in Europe and the Middle East. But “it’s not keeping people at home, though it is making them stay closer to home,” Danziger said, noting a “significantly stronger interest in destinations that are close in, like the Caribbean.”
Luxury consumers are an aging population, Danziger said, and every year their spending on material goods becomes less and less. “What they really want is new experiences, going new places and seeing new things. That’s really what they are looking for.”
One example of that is the interest in luxury cruising and especially private yachts, she said. Many luxury customers have done the Mediterranean and the Caribbean and the river cruises’ now they are “moving to new frontiers like private yachting, which is different and private and customizable.”
While most luxury clients feel optimistic about their personal wealth status, they do have some concern about the economy as a whole. One out of every three affluent Americans “is uncomfortable about the direction of the economy as a whole, and that will create a headwind for luxury as we go forward,” Danziger said.
For travel professionals, the take-away is that “while the demand is really, really strong, affluent travelers are looking closely not at the price as much as the value proposition. They want to maximize the return on their spending investment. They’ve been there and done that, so now it’s all about selling significantly greater value by offering something new and exciting. If you can bring that forward that’s a tremendous opportunity.”