Affluents Are Traveling More, But They’re Not Using Agents
by Robin Amster /About half of affluent consumers in the U.S. are actively planning a vacation at any given time, according to the latest luxury travel trend report from Unity Marketing.
That’s the good news.
However Unity Marketing also found that a large majority of luxury travelers, 75%, did not use a travel agent for their last vacation, according to the report, Affluent Consumers & Their Travel Plans 2013.
On the plus side for agents, the luxury travelers most likely to use a travel agent were those at the top end of the income scale – including ultra-affluents, with annual incomes starting at $250,000, and high net worth consumers, with investible assets of $1 million or more.
The luxury travel trend findings are based on Unity Marketing’s survey of 1,300 affluents – those in the top 20% of U.S. households by income – with annual incomes of at least $100,000.
Communicating value
The study’s findings on the use of travel agent sends a strong message to the agent community, said Pam Danziger, president of Unity Marketing.
“People of my generation have used agents,” Danziger said. “You didn’t then have access to a computer and couldn’t, for instance, see things like the location of your seats on a plane.
“But the younger generation has no clue,” she added.
What should travel agents do? “It’s a matter of communicating your value in a concrete way – explaining what a travel professional does and what benefits they offer. That’s what it comes down to, the benefits.”
Spending is up
According to the report, 45% of affluent travelers planned to spend more on their travels in 2013 than in 2012.
That finding reflects a trend that transcends travel, said Danziger. “The baby boomers are getting older and as they mature, their spending shifts.
“They’ve already bought things for their house and wardrobe. They’re spending now on experiences; that’s the stuff that’s more meaningful.”
For those targeting the affluent, baby boomers – the largest demographic group in real numbers – are still “the core market,” Danziger added.
Trading off
Although affluents are spending more on travel, they’re watching their expenditures closely. They’re also making trade-offs in their spending priorities, the study found.
Luxury consumers will choose the most cost-effective way to travel, either by car or coach class on flights. However, once they get to their destinations, they are less likely to scrimp on accommodations, preferring to stay in four- to five-star hotels or resorts, according to the study.
Influencers
When it comes to the travel decisions of affluents, online reviews and discount offers were extremely influential, according to the study.
Online reviews had an index value of 120, while discount offers’ index value was 123. The index value is based on 100 as the average.
In contrast, travel agent advice, advertisements, the ability to book travel and hotel together, and exclusive services were less influential.
Still in recession
Danziger characterized the current economic recovery as “weak,” adding that “70% to 80% of affluents don’t think the recession has ended.”
“So they’ve learned new ways of shopping and buying and evaluating purchases; they know how to get deals and find values,” she said. “They are very smart shoppers.”
Danziger is often surprised at luxury marketers’ reaction to how practical affluent consumers are in their spending habits.
“Marketers see money, money, money and rich folks,” she said. “It’s just not that way. These consumers get affluent by being careful and hard working and focused on being successful.”