Luxury travel is growing to meet an increasing demand across age groups and household incomes, claims one company, as more people than ever are seeking and spending more on it.
L.E.K. Consulting said “across-the-board pampering is no longer everyone's ideal, and ‘luxury’ now has different definitions for different people.”
While fewer than 10 percent of survey respondents consider themselves luxury travelers, nearly 85 percent say they indulge in travel luxuries at least once in a while, according to the L.E.K. 2017 Luxury Travel Study.
“Today's ‘luxury traveler’ is just as likely to be a Millennial in search of an eco-vacation who is willing to sleep in a bunk bed – but spend significant dollars on, say, a supplemental adventure trek – as it is to be a wealthy globetrotter seeking comprehensive amenities and services,” the company said.
Modern luxury travel is the leading category for discretionary spending – across all luxury categories tested, L.E.K. said, and “travel is now the top outlet for indulgence.”
Nearly half (49 percent) of U.S. travelers indicate that they are likely to splurge on travel, ahead of categories like dining out (43 percent) or food and wine at home (36 percent). Traditional luxury categories like apparel and accessories (30 percent) and jewelry (20 percent) fall even further behind travel.
Millennials leading the way in the new luxury travel experience
L.E.K. believes that Millennial travelers (aged 18-34) are “leading the way in the luxury travel transformation.”
More than three in five (61 percent) Millennials surveyed say that they either choose full or selective luxury travel, compared with 48 percent of Gen Xers and 35 percent of Baby Boomers. These trendsetting Millennials are more likely than older travelers to look for experiences and adventure, to indulge in luxuries on occasion, and to add luxury elements to an otherwise non-luxury trip.
“By getting to know each segment of the bigger, more diverse luxury travel market, and tailoring offerings for each segment, the industry will be better able to change with the times and capture the new luxury travel opportunity," said L.E.K. Consulting's managing director Dan McKone.
To capture the opportunity, the L.E.K. study added, travel suppliers should offer a choice of luxuries to their customers and potential clients.
"Providers must develop ways for more mainstream clientele to toggle into luxury elements," said L.E.K. Consulting's managing director Alan Lewis. "There's a 'Goldilocks' or 'just right' level of luxury for each individual. In practice, that might mean 'Uber when you need it' in place of a town car for the day. It also means embracing the age of the upgrade, overlaying better/best options on top of modest bases.”
And then there are those unique experiences that make someone feel like they are being pampered, Lewis said. “The more experiential the element – for example, dining or activities – the more appealing it's likely to be."
Travel brands and personal brands are driving luxury bookings
Rely on a brand that says “I will indulge you” to drive both luxury client inquiries, and higher sales closing rates when you offer luxury, L.E.K. said.
“Brands still matter,” the company said in a press statement. “But the priorities of what a luxury brand needs to communicate is evolving a bit – perhaps focused less on opulence and more on convenience. Today luxury increasingly means removing frictions – and exclusive experiences. “
Help your Millennial clients “identify and capture prestige moments.”
“Members of the ‘selfie generation’ want to log their exceptional experiences in the moment, and share them with their social networks to enhance their personal brands. Successful travel brands will help them do it.”
The L.E.K. 2017 Luxury Travel Study reached 1,972 U.S. travelers aged 17 and older, and was conducted online.