As a market segment, the ultra-wealthy are a small but mighty group––an estimated 220,000 families around the world who together own $31 trillion in assets, or nearly double the U.S. gross domestic product.
For travel agents ready to take on the challenge, this is a market with exceptional prospects.
“The ultra-wealthy have doubled their wealth in the past 10 years, and it’s not going to stop,” said M. Quentin Desurmont, president and founder of Traveller Made, a France-based network of 270 travel agencies worldwide that cater to ultra-high-net-worth clients.
Regardless of world events, the ultra-wealthy will continue to consolidate their growth, both in wealth per capita and in number of ultra-wealthy families, Desurmont told a roomful of journalists at Traveller Made’s Essence of Luxury Travel conference in Deauville, France, last month. “So we have an amazing market with a high level of need,” said Desurmont, who is CEO of the Paris-based travel agency Peplum.
In the United States, the market of ultra-wealthy travelers is “very strong, very solid,” he said, noting that 2016 saw “the biggest and most solid growth since the recovery from the economic crisis.”
Overall, U.S.-based Traveller Made agencies saw their business increase by nearly 12% in 2016.
The ultra-rich are different
But indeed, as the saying goes, the ultra-rich are not like you and me––or for that matter like most of your clients. For instance, according to Desurmont:
- Almost all (95%) of the ultra-wealthy don’t go on cruises. They rent private yachts instead.
- Many prefer unbranded independent hotels. Independent hotels make up 48% of Traveller Made agencies’ hotel bookings––and this trend is growing. “You find amazing beautiful three-bedroom lodges in Africa, South America, Australia, New Zealand, and very often these small-capacity lodges are the ultimate luxury, and they’re extremely expensive.”
- “Ultra-wealthy people want their travel designers to surprise them. They can book themselves into a chain; they don’t want to have the same experience everywhere they go in the world. [They’re saying:] ‘Surprise me. Send me somewhere new, somewhere I don’t know.’ ”
- Privately-owned luxury villas, chalets and apartments costing anywhere from $15,000 to $400,000 per week are increasingly popular, although a “fragmented” and unreliable supply tends to constrain bookings.
- The ultra-rich start out by consulting travel agents for their complex travel needs. In 2016, 45% of Traveller Made agencies’ bookings were for “elaborated itineraries,” and another 11% for small group events for families.
- Once they receive “amazing service” from their travel agents, the ultra-wealthy start asking them to handle simpler travel needs, such as domestic trips, weekend getaways, resort holidays, as well as corporate travel. “When you do quality, you end up doing everything,” Desurmont said.
- A small percentage of Traveller Made clients are traveling for sports and medical travel (4% and 1% respectively). But this product, including a new generation of spas that offers “near medical treatment,” represents significant untapped potential for agents, with its high margins and travelers who require a lot of logistical support.
- Four out of 10 of Traveller Made agencies’ clients work in business or finance or are company owners; another 22.5% are in fashion, show business or sports. The law and medical professions also represent sizable segments, as do “meta-wealthy” families. Most agencies who handle celebrity clients specialize in that market segment.
Desurmont also reported on destination trends, based on the regions and countries that Traveller Made agencies plan to recommend to their ultra-wealthy clients in 2017. As a region, Europe is a perennial favorite. Also:
- More than one in five Traveller Made agencies plans to recommend Asia to clients, citing its “safety, outstanding high-end services, beautiful and reasonably priced hospitality, authentic people, excellent and healthy food, nature and discovery.”
- Within Asia, Japan is expected to do especially well, Desurmont said. “There is a strong desire [among agencies] to promote Japan. It’s an outstanding country. It’s expensive, with big margins, and people are happy when they come back from Japan.”
Other nations Traveller Made agents plan to recommend, in descending order, are: Italy, the Maldives, France, New Zealand, Australia, Indonesia, Mauritius, Chile, Argentina, the United States, Ireland, Canada and Croatia