Category Archives: Blog

2018 Outlook for Luxury Travel Industry Buoyed by Stronger Economy

Top travel management firms express broad optimism in Strategic Vision’s 2018 Pulse of the Industry Survey, despite headwinds from terrorism and other challenges.

A strong economy and a desire to experience the world will lead to further growth in the U.S. luxury travel sector in 2018, according to a new survey of top travel management firms. The Pulse of the Industry Survey, conducted in December 2017 by Strategic Vision, reflects even more confidence about the industry than it did last year, despite industry challenges such as terrorism, hurricanes, and Zika virus.

“High-end travelers are feeling bullish about the economy, which should lead to another banner year for luxury tourism in 2018,” says Peter J. Bates, President and Founder of Strategic Vision, a global marketing communications firm servicing the luxury travel and lifestyle industries. “They’re determined to see the world and seem to be shaking off concerns about political upheaval and natural disasters.”

In this year’s survey, 37% of advisors said their clients feel cautious about international travel, down from 47% last year. Eight percent said clients are delaying decisions about international trips, vs. 18% last year. That said, seven percent of advisors said clients had canceled international travel plans this year, up from only 4% in the 2017 survey.

In addition, 87% of respondents forecast an increase in revenues this year. The growth is driven mostly by an expected rise in leisure travel (where 84% predict an increase), as well as meetings and incentives (61%) and corporate travel (57%). In addition, 66% see their cruise business rising in 2018.

To keep up with the growth, 68% of respondents anticipate increasing their head count of travel advisors, with only 3% expecting a decrease and 29% seeing no change. As in 2017, the challenge of attracting and training new talent was cited by many respondents as one of the principal issues their businesses face.

Most of the travel management firms surveyed cited positive economic conditions as driving their optimism. The combination of a rising stock market, low unemployment, and the prospect of lower taxes is prompting consumers to spend more on luxury travel. “Travel volumes have increased due to the strong U.S. economy and the sense of couples and families wanting to be together, says Randy Yaroch, Owner and Managing Director for The Travel Society.

While consumers do express some caution about troubling events such as terrorism, natural disasters, and health crises, their financial stability seems to be outweighing any concerns. “Clients still want to travel and have come to the realization that events can and may happen anywhere in the world—including their hometowns,” says Stacy Weigant, Director of the Diamond Luxury Division for Forest Travel Miami. “Most are not letting this stop them.”

Survey participants said that their clients are circumspect about some specific destinations, including Mexico, with its reports of drug-related violence and tainted liquor; the Caribbean, where hurricanes have caused damage on some islands; and Paris, London, Turkey and other European destinations buffeted by terrorism and political unrest. That said, most survey participants felt that such concerns may lead travelers to change plans, but not cancel them. “They influence where folks travel,” says Scott Milne, President of Milne Travel American Express, “but seem to have almost no influence on whether folks travel.” Gail Grimmett, President of Travel Leaders Luxury Brands, concurs: “People are being more thoughtful about destinations, rather than just not traveling.”

Asked about the specific challenges faced by the industry, respondents said that terrorism and crime were having the greatest impact, with one-third characterizing the impact as high (defined as a greater than 30% effect on their business). Of lesser but still substantial significance were hurricanes and other natural disasters (17%), followed by economic concerns (15%). Ten percent said Zika virus, which still affects much of the Caribbean and Central and South America, is having a strong effect, a slight uptick from last year. While Zika is especially troubling for travelers planning to start a family, the concern has a knock-on effect on multigenerational trips as well.

Respondents expected such apprehensiveness to lead to decreases for the Caribbean (73%) and Mexico (42%). That’s a much weaker showing than in last year’s survey—when only 33% of respondents foresaw a decrease in Caribbean and Mexico business combined—perhaps reflecting the stream of bad news from both regions. “The Caribbean is down due to the hurricanes, but will be back once hotels reopen and things settle back to normal,” says Judy Stein, Co-President of Ovation Vacations.

On the positive side, respondents predicted strong increases in interest to North America (81%), Australia (75%), Southeast Asia (65%), and Europe (65%). Travelers are being choosy about where they go on in Europe, said respondents. “Clients are traveling to Italy, Spain, Portugal, Scandinavia, and Iceland because they are perceived as safe,” says Martin Rapp, Senior Vice President Leisure Travel at Altour. “Paris is coming back after the terrorist attack last year.”

The 2018 survey asked about the effect of changing technology and other disruptions to the industry. Half reported that clients occasionally ask them to research Airbnb, onefinestay, and other alternative accommodations for their trips. Even more, 63%, say they believe clients have booked those types of lodging on their own.

Asked what technological challenges their clients express the most concern about, cybersecurity was the number one issue (60%), followed by charges for using cell phone data when abroad (45%), availability of Wi-Fi on flights (43%) and cost of Wi-Fi at hotels (41%). A third said that their clients are interested in “digital detox,” or taking a break from their devices.

Technology also came up when participants were asked to identify the key issues they face in running their business today. Many mentioned the difficulties of keeping up with rapid changes in technology, especially GDS platforms. Several spoke of having to make sense of the glut of information (and misinformation) on the Internet. Jack Ezon, President of Ovation Vacations, sees this as an opportunity for travel advisors to provide value to clients, by “navigating the noise from sensationalized mainstream and social media—and putting things into perspective.” Another effect of technology is that clients expect rapid responses 24/7. “The expectation is that we answer immediately and have confirmations instantly,” says Mary Ann Ramsey, President of Betty Maclean Travel, Inc. “Clients email all day long about every little detail.”

The complexities of the travel management industry are exacerbated by what many respondents consider the difficulty of attracting new talent to their firms and keeping them well trained. “Continuing to find the best talented young people to enter this industry and show them it will be a rewarding career” is a key issue that Linda Raymer, President of the Vacation Travel Division at Travelink, says her business faces, echoing the sentiments of many other respondents.

About the Pulse of the Industry Survey:

The Pulse of the Industry Survey was sent in November 2017 to CEOs, presidents, and other senior leaders of the leading luxury travel management firms and meetings & incentive buyers in the U.S.  These firms, members of Strategic Vision’s research panel, arrange travel for luxury leisure clients, corporate executives, and high-end meetings and incentive groups. The survey garnered a response rate of 67%.

If you wish to learn more, click here to access the full deck containing the findings:  Pulse of the Industry Survey Results

Take Responsibility – The Importance of Sustainable Tourism

Raise your hand if you knew that 2017 was the International Year of Sustainable Tourism.

Good for you! Now, how many of you did something about it?

It’s understandable if your sustainability efforts took a backseat to this year’s more urgent problems: natural disasters, terrorist threats, disease outbreaks. But sustainability remains one of the greatest long-term challenges faced by the tourism industry. In fact, it underlies all three of the issues I named above, each of which can be tied directly to climate change, globalism, tourism’s impact on communities, and other pieces of the sustainability puzzle.

This holiday season, as I reflect on the past 12 months and look at the year ahead, I’ve been thinking about sustainability a lot, and whether the travel industry is doing enough to address it. The answer: probably not—at least not yet. But we are all talking about it. And that might be biggest accomplishment of the UN’s International Year campaign.

“There’s hardly a CEO left on the planet who is unaware of this thing we call sustainable tourism,” says Costas Christ, the longtime National Geographic journalist who is also Virtuoso’s global sustainability strategist. “Now, how they react and invest is another story. But the level of awareness has been immense this year—and awareness is the first step.”

Christ has spent decades pushing travel leaders to focus on long-term sustainability. From his point of view, the industry is growing too big and too fast to survive—unless we do something about it. “What do the people in this business think that we’re selling? What is our product? Distilled to its essence, it’s nature and culture,” he told me. “But both of these things are being massively degraded. Wildlife is being poached, natural habitats are being destroyed, local communities have been disrupted by tourism. What are we doing to protect our product? Think of it this way: If we were selling something that was kept in a warehouse, and somebody with a sledgehammer was smashing everything in that warehouse, we wouldn’t just sit there.”

It’s a daunting issue, but organizations from the World Travel & Tourism Council to Skift have provided useful frameworks to help the industry grapple with it. Virtuoso is also helping to lead the way forward; they have received sustainable tourism leadership awards and held their inaugural Sustainability Summit earlier this year. Christ himself has defined three “pillars” to guide our efforts. One is environmentally friendly practices, such as recycling and reducing carbon footprint. Another is protecting our natural and cultural heritage, whether it’s an ecosystem, a historic monument or a local artistic tradition. The third is supporting the economic and social well-being of local people—making them partners in what we’re trying to protect.

Here are a few examples of companies and organizations that are doing something in these areas. I think they’re worth sharing in the hope that they’ll inspire further action. Further examples were cited by Gail Grimmett, president of Travel Leaders Elite, in a recent column for Insider Travel Report. I agree with both Gail and Costas that we can’t afford to do nothing.

Environmentally Friendly Practices: Six Senses has long woven sustainability into all of its resort operations. At Zil Pasyon, their new property in the Seychelles, that means restoring the natural habitat by planting only native species; using solar energy; treating wastewater to use in irrigation; and refining its own drinking water to reduce the use of plastic bottles (which are difficult to recycle in the Seychelles). The Brando Resort in French Polynesia has gone a step further, pioneering the use of seawater air-conditioning, which pumps very cold water from the depths of the Pacific—the pumps powered by renewable coconut oil—to cool the villas and other buildings. The resort is also close to being carbon neutral.

Protecting Natural and Cultural Heritage: With more than 1 million acres under its management, Singita considers itself as muchas conservation company as a safari operator. Its programs to combat wildlife poaching, reintroduce threatened species, and support research projects are as remarkable as its luxury lodges. Uxua Casa, a small hotel in Trancoso, Brazil, supports Bahian culture by sponsoring a school that teaches capoeira, the traditional martial art/dance technique. It successfully lobbied Unesco to grant it special protected status.

Supporting Well-Being of Local People: The city of Venice is coming up with innovative ways to combat the effects of “overtourism” and ensure that more locals reap the benefits. Its new “#Detourism” campaign encourages visitors to explore beyond the usual sights and have more authentic experiences in lesser-known neighborhoods. In Cambodia, About Asia donates 100% of all profits to local educational efforts, including a teacher training program, that have supported more than 50,000 children.

As always, I welcome your thoughts on the important issue of sustainability. What is your company doing, and how can we, as an industry, work harder?

Let’s keep the conversation going!


What To Do When Disaster Strikes!

Hurricanes, earthquakes, and terrorist attacks. Over the past month, the travel industry has had to react swiftly to get the word about the effects of such natural and man-made disasters.

The challenge for hotels, resorts and cities is to ensure they have a strategy in place to clearly communicate with customers, travel agents and tourists who book or visit them. These places need to frequently convey what damage has occurred and when they expect to be back online or cleared for travel.

Some might say that a resort seems a frivolous consideration compared to the devastation experienced to homes and businesses from these disasters or attacks. But travel and tourism are virtually the lifeblood of many in the affected regions, so effectively communicating one’s status may mean everything to the staff and the local community. Here are some recommendations on how hotels, resorts and destinations can prepare for such circumstances.

Have a crisis communication plan:

If a disaster does hit, everyone at the location should know their roles, from ensuring the safety of those in the local area, to assessing damage, to communicating internally and to the outside world, including those who are booked for future stays and travel agents. Extend that disaster plan to your external public relations or communications firm so they know exactly how you will react to any disaster and can be on the same page with you.

Have multiple ways to communicate:

Given that natural disasters and terrorism can cause wide-spread damage, you need multiple ways to communicate with a global audience. Post the latest information about your location in a visible part of your website and update it frequently. Also, be sure to have access to mobile phones, multiple laptops and tablets all with access to social media. Indeed, in the recent storms, social media—including Facebook, Twitter, WhatsApp, SnapChat, etc.—was the only way to communicate with the outside world.

Have a good communications or marketing firm:

Hotels, resorts, or cities that have such firms can rely on them to get the word out to consumers and travel agents about the status of their clients, so it is important to develop a clear plan that can be implemented by your agency when disaster hits.

Have an effective social media program:

If customers and travel agents know you regularly use social media to communicate, that’s where they will turn when a disaster hits for information from you. Social media can be your lifeline to the outside world.

Communicate often and honestly:

Once a crisis hits, be candid about the damage that has occurred, safety and the status of infrastructure or facilities. There’s no sense in painting a rosy picture if it doesn’t exist. You should try to provide photos after the event has safely passed. Then provide updated photos as repairs are made. If you need to close the location for a significant period, let tourists or guests who have booked and their travel agents know. You may want to consider shutting down distribution channels altogether.

Have a clear policy on cancellations and re-bookings:

If your destination is severely damaged and can’t accept visitors or guests, make sure you have a policy on refunds, re-bookings, commissions, etc. It’s probably a good idea to trigger that policy even if your location has not been marred, since you don’t want guests who are dissatisfied because there is little to do or see in the surrounding area.

If you work to develop an overall policy as outlined above, you can better meet the challenge when a major storm or other disaster hits. The key is to communicate effectively, honestly and often about what’s going on during such an event. In the end, honest communication will provide a bond of trust with travelers.

As we remember the recent devastation, please consider contributing to one of the following relief efforts:

As always, I welcome your feedback on what’s changing in the luxury market today. I look forward to getting your comments. Let’s keep the conversation going!

The Rise of the Chinese Luxury Traveler

What’s the impact of the Chinese luxury traveler on the overall luxury travel market? “The Chinese Luxury Traveler 2017” survey by ILTM and Hurun Report Inc., shows how these travelers could have a dramatic effect on the overall luxury travel market worldwide in terms of demand and pricing.

What’s the Size of the Market?

In 2016, according to a report issued by Ctrip and the China Tourism Research Institute, Chinese tourists made 122 million overseas trips, up 4.3 percent compared with the previous two years. An increasingly larger portion of those travelers are in the luxury category (according to the new ILTM survey), with the number of yuan billionaires hitting 1.34 million last year, up 14.1 percent from the previous year.

How Much Do They Spend?

The ITLM survey found that Chinese luxury travelers had an average wealth of nearly 22 million yuan ($3.24 million) and their travel expenditures reached nearly 380,000 yuan ($55,985). Their purchasing power also has grown significantly over the past two years, climbing from 14 million yuan ($2.06 million) per capita in 2015 to 22 million yuan ($3.24) this year, a 57 percent increase.

Where Do They Travel?

According to the ITLM, Chinese luxury travelers are enthusiastic about overseas travel with the amount of time spent overseas for tourism purposes rising 5 percent to 70 percent of those surveyed. While the economic slowdown in China in 2016 led to some luxury travelers spending more time at work, this did little to reduce their appetite for travel.

Destinations visited abroad over the past year by these travelers are, in order: Europe (45 percent); South and Southeast Asia (44 percent); Americas (31 percent); Oceania and Pacific Islands (26 percent); Japan and South Korea (24 percent); Polar Regions (23 percent); Hong Kong, Macau, and Taiwan (21 percent); Africa (15 percent); and the Middle East (10 percent).

Where Do They Stay?

Of those Chinese luxury travelers surveyed by ITLM, 32 percent had accommodations budgets topping 5,000 yuan ($736) per night with an average budget of 3,800 yuan ($560) per night. Millennial Chinese luxury travelers’ hotel budgets actually rose 7 percent compared to last year, from 3,113 yuan ($458) to 3,325 yuan ($490) per night.

Luxury hotel brands are still the first choice for Chinese high-end travelers, but high-end boutique brands are increasingly more popular. Top luxury brand choices, for both major and boutique luxury brands, were, in order: Ritz-Carlton, Banyan Tree, Four Seasons, Mandarin Oriental, Fairmont, Peninsula, Aman, Langting, Park Hyatt, and St. Regis. Preferred accommodation types were holiday hotels (81 percent), business hotels (18 percent), B&Bs (9 percent), and apartments (6 percent).

When Do They Go?

Like high-end travelers in other parts of the world, time of year has a major effect on where Chinese luxury travelers plan future trips. Indeed, 59 percent of those surveyed said they avoid traveling during national holidays. In summer and fall, Millennial Chinese luxury travelers, in particular, focus on travel to exotic islands, with Phuket (27 percent), Maldives (18 percent), Fiji (16 percent), and Sanya (16 percent) being the top choices.

During the colder winter and spring, these travelers venture out to warmer destinations like Australia (16 percent) and Phuket (16 percent), but there also is a large enthusiasm for skiing, with high-end Chinese travelers going to Japan (32 percent), Canada (9 percent), and Switzerland (7 percent).

Why Do They Come Here?

The research company YouGov’s survey, “Affluent Perspective 2017: Chinese Luxury Shoppers in America,” found the majority of China’s affluent consumers (56 percent) plan to visit America within the next two years. Indeed, China is crucially important for the U.S. travel industry. The U.S. National Travel and Tourism Office says Chinese travelers spend the most of any foreign visitors—an estimated $34.8 billion generated by 2.6 million visitors through the first 10 months of 2016. This translates to an average spend of approximately $13,400 per traveler.

Among the Chinese affluent preparing a trip to the U.S. in the next couple of years, many of them want to go shopping for high-end luxury goods. Data shows that 51 percent of this group say they travel internationally to buy luxury goods and services, with the U.S. ranking fourth among countries they visit most for shopping. Those who do so are young, cultured, educated, successful, extremely happy, and comfortable anywhere in the world. They also prefer well-known brands that are recognized around the world.

How Do They Book?

Travel agencies dedicated to the luxury market have grown at a rapid rate over the past two years, offering customized travel products. And 72 percent of younger Chinese luxury travelers made use of them in 2017, up 7.5 percent compared with the previous year.

Top outbound Chinese travel agency brands used by Chinese luxury travelers were 8 Continents, CITS Amex, CITS, Ctrip, CTS, CYTS, Diadem, D-Lux, HH Travel, Magic Travel, My Tour, and Zanadu. So, like their luxury traveler counterparts here in the U.S., Chinese luxury travelers seem to like the service provided by travel advisors to fulfill their travel needs.

As always I welcome your feedback on what’s changing in the luxury market today. I look forward to getting your comments. Let’s keep the conversation going!

The Allure of the Celebrity Chef

For a number of years now, top hotels and cruise lines have been forming partnerships with celebrity chefs to boost their culinary offerings. They’ve developed these alliances as a way to turn their hospitality products into true destinations for food lovers, as well as to drive revenues and increase rates.

In a straw poll of hospitality providers, we’ve found that the celebrity chef is alive and well, as hotels and cruise lines continue to partner with them. The reason is they still see value in such partnerships, both to their hospitality products and their customers.

Value of the Celebrity Chef

Tom Kaplan, senior managing partner of Wolfgang Puck Fine Dining Group, which has restaurants at a number of top hotels around the world, including at MGM Resorts in Las Vegas, Walt Disney World and Dorchester Group properties, says that after 28 years of partnering with hotels, he’s found it does improve the guest experience to have a celebrity chef or even a well-known local chef heading up a restaurant.

“The added value is sometimes quantifiable and sometimes not quantifiable, but it definitely enhances the property and it brings in people from the local community,” Kaplan says. “But it doesn’t necessarily have to be a celebrity chef…just someone known to the community.”

Luc Delafosse, managing director for the new Waldorf Astoria Beverly Hills, who is launching his hotel in June with celebrity chef Jean-Georges Vongerichten, says that in a market like Beverly Hills, there is incredible value in promoting a “new” culinary experience offered by a celebrity chef. “A [celebrity chef’s] proven track record gives confidence and guarantees a certain level of service at the same time,” he says.

Julia Record, director of communications for Dorchester Collection, which has 10 luxury hotels in England, Italy, Switzerland and the U.S., says Dorchester is renowned for partnering with celebrity chefs, including Alain Ducasse and Wolfgang Puck.

“Our strategy is to work with like-minded, trusted brands that share our brand values. Our research shows that by offering an extraordinary dining offering, it adds a memorable experience. Celebrity chefs are part of our Dorchester Collection narrative,” Record says.

A Successful Partnership

From the chef’s perspective, the most important things to consider before making a final decision on collaborating with a hotel or resort is trust and compatibility, according to celebrity chef Andrew Fairlie, whose marquee restaurant has been located at Gleneagles Hotel in Scotland since 2001.

Fairlie says he looked at whether Gleneagles’ ambitions were the same as his, whether the support promised was realistic, and whether the hotel’s guests were the people he needed in his restaurant in order to make his business a success. “When I sat down and considered all of the above, Fairlie says, “I felt very comfortable in signing a partnership deal.”

According to Kaplan, there are two parts to successful partnership between a hotel and a celebrity chef: The first is delivering a great culinary experience and making sure that the restaurant brand translates seamlessly into the hotel space. The second is having the restaurant understand the hotel guest’s needs.

“When they walk into the lobby and they see a Wolfgang Puck restaurant, it has to be about their experience and their satisfaction,” Kaplan says. “We need to have synergistic goals and standards between the [hotel and the celebrity chef restaurant].”

Differentiating the Experience

Delafosse says having Jean-Georges at the Waldorf Astoria Beverly Hills will offer guests a new and different culinary experience. There are no other Jean-Georges restaurants in Los Angeles area or even California so the chef will immediately help differentiate the hotel with his unique cuisine.

For Record, a celebrity chef also is key to differentiating the hotel experience at Dorchester’s hotels. “One of our key differentiators is the individuality of our hotels,” she says. “Our hotels have been and remain the cornerstone of their local communities reflecting the local destination and culture.”

Fairlie says he knew Gleneagles needed a unique selling point from other golfing resorts in Europe to differentiate itself, and an intimate fine dining experience became the solution. “Gleneagles expected me to deliver a one Michelin star restaurant and I was confident I could deliver them a two-star restaurant.”

Creating a Destination

Delafosse says Jean-Georges is a strong partner for the Waldorf Astoria Beverly Hills, overseeing the entire food and beverage aspect of the hotel and he will play a critical part in the future success of the hotel, creating “the” place to be in Beverly Hills for guests and outside customers alike.

Greg Nacco, a veteran travel advisor who also has a specialty in food and wine through his Food & Wine Trails, says having a “destination” restaurant is an important part of any overall culinary and marketing strategy. While he focuses on winemakers, he says celebrity chefs are similar. “We visit world-renowned wineries and restaurants in the most desirable wine and travel destinations,” he says. “It would be similar for restaurants and chefs.”

Fairlie says he insisted from the very beginning that he wanted to be 100 percent independent from the hotel so he did all his own PR and marketing to turn his dining venue to a destination restaurant known as one of the best in Scotland.

“At the beginning, it was only through favorable reviews and making a concerted effort at increasing my own profile that we gained recognition further afield,” Fairlie says. “It’s only now that we both feed off each other to our mutual advantage.”

Driving Revenues

Record says the destination culinary experiences in their hotels leads to greater desirability and enhanced room revenues. “As well as seducing our guests in house, it helps us attract new guests through the food and beverage experience initially who are then curious to experience the wider environment of the hotel,” she says.

Nacco agrees that celebrity chefs drive room and tour revenue. He charges more than what the consumer could normally buy his wine and food tours for, because his programs have a very highly perceived value with added tours, paired meals and tastings from top winemakers and chefs.

Strategy for the Future

Fairlie says more and more hotel companies are using celebrity chefs as a unique selling point in their properties. “I think it’s becoming very difficult to market rooms, spas, services with a difference,” he says. “So selling [culinary] personalities and great food matched with faultless service is becoming more and more sought after.”

Record says the key is to work closely with Dorchester’s celebrity chefs to continue to evolve the gastronomic experience. “We are fortunate that by starting with the same brand values we are able to move forward together to offer an unsurpassed culinary offering,” she says.

Kaplan believes the relationship between hotels and celebrity chefs will continue to evolve. “Some hotel brands have started to do their own restaurants, but they just don’t get the traction that a name brand chef will get.” Kaplan believes hotels will continue to partner with celebrity chefs, but there will also be an increase in local or regional chefs due to the limited number of celebrity chefs.

Based on these comments, it would appear that celebrity chefs continue to add value to high-end hotels. And it appears the trend in partnering with such chefs will continue for the foreseeable future.

As always I welcome your feedback on what’s changing in the luxury market today. I look forward to getting your comments. Let’s keep the conversation going!

The Luxury Travel Industry’s Outlook on 2017: Optimistic But a Bit Nervous

Strategic Vision’s 2017 Pulse of the Industry Survey reveals that top travel management firms expect to see growth. But security, political stability, and Zika remain pockets of concern.

The U.S. luxury travel industry is predicting a strong year for 2017, citing the resilience of the post-election economy and increased consumer confidence as main factors. But it does expect some areas of softness and concern, particularly around international travel. These are the conclusions of the Pulse of the Industry Survey conducted this February by Strategic Vision, a global marketing communications firm servicing the luxury travel and lifestyle industries.

Survey respondents, which include senior executives of the nation’s leading luxury travel management firms, bridging the leisure, corporate and meetings & incentives sectors, are largely optimistic about their clients’ 2017 travel sentiments.

“The high end of the industry is feeling very upbeat about travel in 2017,” says Strategic Vision President & Founder Peter J. Bates. “They foresee higher revenue and, in a sign of confidence, plan to hire more advisors. As expected, there is some hesitation in clients’ minds, but on the whole, the top of the market is still enthusiastic about traveling – a lot – this year.”

Nearly three in five of the surveyed firms (58%) say their clients are optimistic about domestic travel, while 44% report that their booking habits haven’t changed. Only 2% report “cautious” feelings among their clientele.

When it comes to international travel, however, the outlook is less rosy. Nearly half of the firms characterize their clients’ sentiments as “cautious,” compared to 31% who call it “optimistic,” and the same percentage, 31%, who say that booking habits haven’t changed.

Why the mixed feelings? The consensus among these travel executives is that a strong economy is spurring trips, yet clients still have some reservations about safety and security while abroad, largely around terrorism. “The stock market is up and seniors are enjoying their lives,” says Anne Scully, President of McCabe World Travel.

But pockets of concern surround specific destinations, due in particular to terrorism, the Zika virus, and the overall geopolitical climate. Some firms point to Paris, Mexico, Turkey and the Middle East as destinations where security and safety issues are causing reticence. There is less discomfort around North America, Italy, Scandinavia, and Portugal. Several respondents cited the effect of the Trump presidency on the American image abroad as a concern, with Rudi Steele, President of Rudi Steele Travel, Inc., saying, “clients are worried that they are no longer liked overseas.” But for many clients, the impulse to travel outweighs any concerns. As Tim Krenzien, President and Owner of Paul Klein Travel, puts it, “Experienced travelers understand the risks and do not want to forgo travel and life experiences.”

Asked specifically about the impact of the Zika virus, most agencies see it as a minor consequence. Two-fifths quantify the impact as less than 10%, while one-fifth say it is between 10% and 30%. A third say the virus has had no impact at all. When asked which destinations are most affected by Zika, respondents cite the Caribbean, Mexico, Central America, and, less frequently, Florida.

Regarding specific sectors of their business, firms report several areas of strength. Majorities foresee an increase in interest in North America (89%), the Far East (57%), Australia (73%), Southeast Asia (60%), and cruises (56%).

“The increasing interest in farther-flung destinations such as Asia and Australia suggests that luxury travelers are ready to splurge on longer and more ambitious journeys,” says Bates. “At the same time, consumers are giving cruises a second look, a testament to the perceived value and convenience of that type of vacation.”

As for destinations where they expect less interest, the surveyed agencies most frequently cite the Caribbean/Mexico (33%), Central America (20%), Latin America (18%), and Europe (18%). The “fear factor” is given as the principal reason that clients are less interested in the Caribbean/Mexico, Latin America, and Europe.

Despite these areas of caution, the respondents express general optimism about their firms’ performance in 2017. Four out of five (80%) predict an increase in their own company’s revenues in 2017, compared to 13% who predict no change, and 7% who foresee a decrease.

In terms of hiring plans, 70% expect to bring on more travel advisors in 2017, with 23% expecting headcounts to stay the same, and only 7% expecting them to decrease. A substantial number of respondents say that finding qualified travel consultants to hire is a challenge. “We can’t get enough great agents,” says Michael Holtz, Founder and CEO of SmartFlyer. Scott Milne, President of Milne Travel, lists “finding new talent, attracting young people, and fear of artificial intelligence’s impact” as key issues.

Delving deeper, four out of five of the surveyed firms report that they expect leisure travel business to increase in 2017, with about 18% forecasting no change in that sector. About half predict growth in corporate travel (51%) and meetings & incentives (49%).

Another recurrent theme is the increasingly complexity of running a travel business in the Information Age. Steve Orens, President of Plaza Travel, mentions the difficulty of “staying ahead of all the information available on travel,” while Bobby Zur, Founder and Owner of Travel Artistry LLC, describes the challenge as “how to navigate the world of OTA’s and Airbnb, and harness and distill information, instead of feeling threatened by it.”

In sum, it seems that in the luxury travel industry, business is good—but always presents new challenges.

About the Pulse of the Industry Survey:
The Pulse of the Industry Survey was sent in late February to CEOs, presidents, and other senior leaders of the leading luxury travel management firms and meetings & incentive buyers in the U.S. These firms, members of Strategic Vision’s research panel, arrange travel for luxury leisure clients, corporate executives, and high-end meetings and incentive groups. The survey garnered a response rate of 52%.

If you wish to learn more, click here to access the full deck containing the findings:  Pulse of the Industry Survey Results

Highly Affluent Travelers – An Update

What do highly affluent travelers really want in terms of vacation travel? Research firm YouGov asked that question in a recent poll of such travelers (defined as those with household incomes over $350,000), and the results are key to understanding the new mindset for luxury travel.

Here are a few key findings on this valuable survey that I thought were highly relevant to the travel market, focusing on what these highest-end travelers value in a hotel or resort experience and how they use travel advisors.

Who are Highly Affluent Travelers?

YouGov’s survey can create a number of consumer breakouts, but for today we are talking about highly affluent travelers split into two groups: The first group called Extraordinary Travelers, who have taken a private jet vacation (hence the term “extraordinary”) have an average household income of $968,000 and average liquid assets of $16.5 million (stocks, bonds and cash).

In comparison, we also look at those highly affluent travelers who are either not aware of or have not taken a private jet vacation before, have an average household income of $750,000 and average liquid assets of $4.7 million.

Extraordinary Travelers are going beyond experiential travel to focus on transformational travel, a significant move that could have implications for how travel suppliers develop products in the future.

How Can the Hotel Help with the Search for Transformational Experiences?

When staying at a hotel, highly affluent travelers have definitive views (scores in excess of 80%) on service, space and more. They say service at hotels should be natural and not forced. They prefer hotels with a feeling of casual elegance, and they expect to be treated like a VIP during their stay.

As for specific room features and desired hotel amenities, the expectations of both Extraordinary and Upper Affluent travelers are no different from other travelers. The top five for both categories of travelers are:

  • Free Wi-Fi
  • USB chargers and outlets near bed tables
  • Complimentary coffee/tea in room
  • Complimentary water
  • Restaurant onsite

However, Extraordinary Travelers add in a demand for technology in the room and activities on property.

  • Programmed activities at the hotel
  • Celebrity chef at the restaurant
  • Beauty salon on premises
  • Ability to push content from my personal tablet/phone to the TV in the room
  • A hotel-provided tablet in the room that connects with service, the front desk, etc.
  • Mini-bar with premium drinks and snacks

Hotel designers and management companies need to ensure each of these factors are taken into consideration when designing new hotels, and establishing the service offering of brands targeting this high net worth traveler.

What Hotel Services Do They Desire?

Hotel services desired by highly affluent travelers are very similar for both categories, but with higher percentile scores recorded for Extraordinary Travelers. The top five desired hotel services are:

  • Concierge who can provide recommendations about the local area
  • Shuttle services
  • A concierge who can provide access to hard to get into restaurants or events
  • 24-hour room service
  • Private transportation from the airport

​Extraordinary Travelers also demand personal services, such as:

  • Personal butler, concierge, or packing/unpacking services
  • Personal fitness trainer and medical services

​This clearly emphasizes the importance of personalized services, and to never under estimate the value provided by staff interacting directly with guests to fulfill their individual needs.

What Attributes Do They Seek in a Hotel or Hotel Brand?

YouGov also asked highly affluent travelers about what attributes they look for in a hotel or hotel chain. The top five responses were:

  • Offers impeccable service
  • Have beautiful hotels
  • Offers an unforgettable experience
  • Exceptionally comfortable rooms
  • Captures the local culture of a destination

Extraordinary Travelers are nearly 5-times as likely to say “staff that recognizes me and my preferences” as being extremely important in selecting a hotel.

It has never been more important for hoteliers to integrate the destination into both the sales process; for example promoting local events and festivals, as well as the guest experience itself including incorporating local artisans and culinary experiences into client itineraries.

How Do Highly Affluent Travelers Work with Travel Advisors?

Where the two categories of highly affluent travelers seem to diverge most is in their inclination to book travel through a travel advisor. For instance, 55% of Extraordinary Travelers say they worked with a traditional travel advisor over the past year, compared with only 17% of other highly affluent travelers.

Those who did work with a travel advisor did so for the following reasons in order of importance, namely booking flights, lodging, cruises and car rentals.

Even more to the point, high-end travelers who booked through a travel advisor were asked how much influence that advisor had on their decisions. The most influenced categories of travel, and their respective scores for segment being:

  • Flights (79% Extraordinary, 53% highly affluent)
  • Lodging (95% Extraordinary, 60% highly affluent)
  • Cruises (94% Extraordinary, 49% highly affluent)
  • Car rentals (62% Extraordinary, 74% highly affluent)

Clearly, there is a great marketing opportunity for travel advisors to reach additional highly affluent travelers who are not using travel advisors. In addition, travel advisors need to ensure that at all times they are communicating their value proposition, especially to the Upper Affluent Regular Travelers segment.

What Does It All Add Up To?

Extraordinary travelers are interested in being rewarded for their loyalty – less about the points they can earn and more about the respect they receive. Travel professionals who can build relationships are also ones who reduce friction in the traveling process, and cultivate loyalty. These travelers place greater emphasis around maximizing the time they have on vacation. They want special experiences programmed into the trip, they want to bring the comforts of home (like their Netflix subscription), and they want a smooth transition. High touch? Yes. High reward? Absolutely.

These are only some of the survey results from this just released survey of highly affluent travelers. I hope to have more from the survey in a future newsletter, but in the meantime, as always, I welcome your reaction to this survey as well as your thoughts on what’s changing in travel today.

Let’s keep the conversation going!

Our New Client Can Help Grow Your Brand

Peter J. Bates, CTC

January 13th, 2017

Dear Colleague

Happy New Year!

We have been passionate about travel, hospitality and publishing since we created Strategic Vision eighteen years ago. We share this passion with our amazing clients who day in and day out create experiences and make lasting memories – whether our clients are welcoming guests to their island, creating dreams through their content or making these dreams a reality in their amazing hotels throughout the world. We are proud of our work in growing luxury brands in a constantly evolving marketplace.

Recently, we have been retained by SK+G, a firm that shares our passion for hospitality and tourism. We have a common mission, “To make our clients’ brands the most coveted among their customers, guests and clients.” SK+G has established a formidable reputation for creative advertising and automated marketing intelligence. They have launched more integrated resorts than any other agency in the world and have a particular expertise in luxury and lifestyle marketing. We are really impressed with their work and believe you will be as well.

Here is one of the most recent campaigns SK+G has launched:

Caroline Bay is being developed in Bermuda. SK+G helped define a new era of luxury residential and resort development in Bermuda with its work for this resort. From positioning, naming, and brand identity to advertising, media strategy and web design, SK+G crafted a distinctive and compelling brand story for Caroline Bay, signaling a revitalization and renaissance of hospitality in Bermuda.

Take a look at this:

One area of differentiation that really excites us is the power of the Automated Marketing system SK+G has developed. It is all about targeting the right person, at the right time, with the right message – in real time. Allow me to introduce Neuton:

Take a look at this: Neuton Data-Driven Marketing

If you have not met SK+G, we are excited to introduce you – we know you will be impressed. They are always just a click away. Take a look at their website, which features their work for international brands including Baha Mar, Galaxy Macau, The Grand Del Mar, Wolfgang Puck and much more:

If you would like to set up a time to discuss SK+G, please let me know.

Best wishes for a great year ahead from all of us at Strategic Vision!

Peter J. Bates
Strategic Vision

Click Here to Reply

  Strategic Vision
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What’s Trending in the Luxury Travel Market

As 2016 draws to a close, I find myself reflecting on changes we have seen in the luxury travel sector this year, and more importantly what new developments we might anticipate in 2017.  With that in mind I wanted to look at a few developing trends that I believe we all need to take into consideration as we consider the short-term future of the luxury travel market.

I’ve selected six trends from two market research firms on the future of travel, including “2016 Future of Luxury Travel Report” by Resonance, and “The Future of Travel” by Qubit. Here’s a summary of those trends, as well as my thoughts on each of them.

Travel as Transformational

elephantsResonance’s survey finds luxury travelers are seeking transformational experiences that allow them to learn new things and shift the way they view the world. This is an augmentation of the experiential travel trend that has been the focus of luxury travel for the past few years. High-end travel suppliers are actively developing programs that include special events, speakers and educational courses that deliver unique knowledge and insight for travelers. I believe this trend will only grow, although a word of caution, it will be ever more challenging for travel suppliers to find new experiences that truly resonate with their customers.

Art Becomes the New Cuisine

art-galleryCulinary and dining experiences have long been a major focus for luxury travelers, but Resonance predicts that art will become the “new cuisine”. The group’s research finds that a significant percentage of luxury travelers are developing a taste for art in their travel plans, and not just in museums or galleries, but also at festivals and in the places they stay. Indeed, I’ve seen a surge of new hotels featuring curated art programs where the property itself becomes the art gallery.

Wellness Evolves to Wellbeing

yogaOne of the next luxury travel trends being observed is the elevation of the current focus on wellness at spas, resorts, cruise ships and destinations; to a more all-encompassing focus on “wellbeing.” Spa vacations are evolving into immersive programs involving health, relaxation, mindfulness and spiritual healing. An increasing number of resorts are delivering experiences designed to transform guests’ total “wellbeing”, providing a sense of comfort and happiness.  I see this trend growing even more as people look for havens from the pressures of the modern world and seek more opportunities for personal growth.

From Multigenerational Travel to “Togethering”

familyThe growth in multigenerational travel has been the biggest trend in tourism for several years. It is changing the accommodation configuration of resorts and second homes as the wealthy demand increasingly larger facilities in order to share quality time with their extended families and friends, what Resonance calls “togethering”.

Destination clubs, traditional luxury hotels and resorts will all have to respond to remain attractive options for this clientele.

More Demanding Digital Travelers

girl-on-phoneHigh-end customers are using a wide variety of devices in all stages of the travel planning process, including smartphones and tablets across different channels to plan, book and share their vacation experiences. According to Qubit, travel suppliers and advisors must recognize how to connect with these travelers on a personal level and enhance their experiences with the brand on these devices. That means travel brands must adapt to deliver a first-class customer experience in a digital environment, where there are fewer human interactions. This is going to be a challenge for high-end luxury brands and luxury travel advisors.

For the Travel Advisor this means staying in touch and monitoring the client throughout the trip and using the technology now available to do this.

Disruption From Sharing Economy

hotel-front-deskDisruptive new products such as Airbnb, onefinestay, and Uber have created a new sharing economy that has profound long-term implications for the luxury travel market. In the case of Airbnb and onefinestay, they are leveraging the “togethering” trend noted above with multi-generational travel at the high-end with access, competitive pricing and tailored accommodation for this market. According to Qubit, these companies are applying technology and enhanced customer data to develop deeper interactions with the guests, and established luxury travel vendors will need to focus on the customer experience and mirror these same technologies and initiatives in order to compete more effectively.  I believe if they do, they can beat the threat posed by the shared economy.

I hope this snapshot of travel trends sparks some thoughts and ideas for future discussion. As always I welcome your feedback on what’s changing in travel today. Let’s keep the conversation going!

Using Social Media to Find New Prospects

One of the biggest challenges we all face is finding good prospects for premium customers. Indeed, travel companies—including airlines, cruise lines, hotels, travel agencies and tour operators—are constantly seeking new ways to obtain prospects and win more business from existing customers.

Many travel companies are turning to social media to find these prospects as well as communicate with their existing clients and business network on a daily basis. Such social media outlets as LinkedIn, Facebook and Twitter, among others, represent huge opportunities for travel companies seeking new customers, as well as ways to better address the needs of their existing travelers.

What LinkedIn’s New Survey Says

man-with-suitcaseEarlier this year, LinkedIn completed a survey of business and leisure travel that provides travel companies with ways to better understand modern travelers and how to get more of their dollars.

LinkedIn’s survey of more than 14,000 travelers covered 24 major international markets. Both their business and leisure traveler audiences represent a huge market for travel and hospitality companies.  One in four LinkedIn business travelers have taken eight or more trips for business in the past six months. In addition, 38 percent of LinkedIn members have taken three or more trips for leisure in the past six months.

LinkedIn’s research confirmed not just that LinkedIn members travel far more than the average traveler, but that they are far more likely to pay for a premium travel experience, whether for business or leisure. The survey found that one out of every five of all business trips has been taken in first or business class. A quarter of LinkedIn leisure travelers also fly in premium economy, business or first as well.

Customize Your Social Media Message

woman-flight-searchHow can travel and hospitality companies get a greater share of the budgets of these travelers? According to LinkedIn, the key lies in identifying the drivers for different types of travel bookings and then supplying the content that travelers seek throughout their different journeys.

For example, travelers planning leisure trips are highly receptive to getting deals, offers and inspiration from city guide-like sources. When making a business booking, however, they seek practical advice on how to upgrade, as well as expert or insider reviews on how to travel better.

Such subtly different information reflects how travelers’ priorities change on different occasions. For example, LinkedIn’s survey found that price dominates decision-making for leisure travelers both when it comes to the airline they fly (74 percent chose price as one of their top three priorities when choosing an airline) and where they stay (70 percent choose price as one of their top three priorities when selecting a hotel). Leisure travelers are 1.5 times more likely to be influenced by price in their choice of airline and 1.4 times more likely to have price influence their choice of hotel, than their business travel counterparts.

For business travelers, however, the LinkedIn survey found the availability of direct flights (50 percent) and hotel location (68 percent) were the most important factors in travel booking decisions.

Know Your Client’s Decision Triggers

man-on-beach-with-laptopKnowing your client’s mindset and delivering useful and meaningful content is key to generating a response and potential new booking. Sharing your own travel and destination experiences (e.g. native advertising) and people you have met (e.g. guides, concierge) are powerful tools to bring the trip to life for your followers and like-minded prospects.  Conversely, some clients and prospects don’t need the ‘bells and whistles’ and look to travel advisors to share basic price and availability information that will help confirm a sale.

The recent growth of combining business and leisure travel to form ‘bleisure trips’, provides a significant opportunity for proactive travel advisors to apply lessons learnt in social media messaging to each discreet segment.  As the complexity of the booking itself increases with ‘bleisure trips’ (e.g. additional travelers, decision making, payment, activities), so the need to fully understand the decision making factors grows, and what social media messaging will trigger a response.

Building Loyal Travel Communities

first-class-airplaneThe LinkedIn survey found there are also benefits to travel companies when they seek to build loyal travel communities. Roughly 66 percent of LinkedIn leisure travelers and 72 percent of business travelers are already members of travel loyalty programs, but that doesn’t mean they can’t be convinced to build new relationships with different airline and hotel brands. LinkedIn’s research shows that better perks, including upgrades, improved lounge access, extra points, transferrable points and preferential booking, could all persuade travelers to sign up for a new loyalty program.

As of the second quarter of 2016, LinkedIn has been reported to have 450 million registered members, which indicates a major growth of 36 million members from the end of last year. Clearly, LinkedIn represents a significant marketplace and opportunity for travel and hospitality companies to prospect for new business.