Luxury Travel’s Stunning Rebound

Luxury travel has made a stunning comeback from the downturn it suffered post-recession. Travel agents are reporting strong business from affluent clients seeking memorable experiences in lesser-known destinations.

“We’ve been doing exceptional business,” said John Oberacker, owner of Eden for Your World Travel in Long Beach, Calif. “Our bookings are up about 40% this year over last. Bookings early this year for spring and summer were out of control.

“We’re now booking out into next March through August,” he said. “People are thinking way ahead.”

This year the affluent will spend more on luxury travel than on any other luxury category, according to Milton Pedraza, CEO of the Luxury Institute, a luxury research and consulting firm.

“They’re de-emphasizing luxury goods,” Pedraza said. “[Luxury travel] is the No. 1 area where people don’t want to cut back.”

It’s the experience that counts
Driving what Pedraza called the “robust” luxury travel market is the powerful trend toward experiential travel, where clients seek out unique encounters with a destination’s culture, history and people.

The trend fits neatly with luxury travel as clients often seek those kinds of experiences in far-flung, exotic destinations not on the mass market tourism map.

“We’re selling a lot of France and Italy but we also see a lot more interest in Morocco, Peru, Argentina, even Bolivia,” said Lydia Ganz a luxury travel consultant with Cruise & World Travel, a Virtuoso agency in Fairfield, Conn.

From a low point that lasted from 2005 to 2008, Ganz’ luxury business has rebounded, with bookings up by 5% to 10% this year over last, she said.

Out of the comfort zone
“People don’t just want a vacation, they want an experience,” said Leigh Elizabeth Bryan, president of Orange Park, Fla.-based Avondale Travel, a Valerie Wilson Travel affiliate.

“They’re going outside their comfort zone,” she added. “Clients want to come back and say ‘Oh, you have to do this.’

“We get a lot of inquiries for India. How many people get to ride an elephant?”

“Business is great,” Bryan said, adding that she’s noticed an increase in luxury bookings by the many young professionals she deals with.

“They’ve realized they can afford to do it, want to do it and are thrilled [after a trip] that they did.”

Trends within luxury
The experiential travel trend can extend to an interest in volunteerism.

While Ganz receives inquiries about dedicated volunteerism trips, she noted that clients can satisfy their desire to give back by traveling with companies like Micato Safaris and A&K, “who donate a certain amount of profits back to the community.”

Among other strong trends agents continue to see in the luxury market are multigenerational travel, small ship cruising and river cruising.

Hesitant on high airfares
The only difference Ganz has noticed in her luxury clients this year over last is an objection to high airfares.

“They don’t want to spend on [high] airfares,” she said. “They’ll use [frequent flyer] points or buy economy plus or extra legroom seats.

“They’re also looking for deals, such as stay four nights and pay for three.”

Value tradeoffs
Pamela Danziger, president of the luxury consulting firm Unity Marketing, said she too sees luxury travelers cutting back on “how they get to a destination.”

“There’s a much greater incidence of flying coach at the same time that they’re spending on four- and five-star resorts, Danziger said. “They are picking and choosing.”

The cost versus value proposition is alive and well among the affluent, Danziger said. “Just because people have a lot of money, doesn’t mean they don’t want deals.

“Luxury consumers are smart and know how to find a deal; the idea that they’re not is foolish.”