Top Luxury Travel Advisors Expect a Boom Year in 2019
Increased wealth, interest in new experiences, and inspiration from social media outweigh concerns about economic headwinds and world events in Strategic Vision’s 2019 Pulse of the Industry Survey
A survey of the top luxury travel management firms in the United States reveals surging optimism about the state of the industry heading into 2019. In its annual Pulse of the Industry Survey, global marketing communications firm Strategic Vision reports that 44% of companies surveyed say their clients are optimistic about international travel, with 54% optimistic about domestic travel. That’s a big leap from last year’s numbers of 19% for international travel and 29% for domestic travel. Only 16% of advisors said their clients were feeling cautious about international travel in this year’s survey.
For most of the surveyed firms—which plan and book leisure, business, meetings, and incentive travel for some of the world’s largest companies and wealthiest individuals—this confidence translates into a robust business forecast for 2019. Nearly nine out of 10 firms (88%) predict an increase in revenues this year, a sunny prognosis that comes on the heels of a successful 2018. Eighty-eight percent of respondents said that last year’s revenues topped those of 2017.
“The luxury travel industry is poised for yet another banner year in 2019,” says Peter Bates, President and Founder of Strategic Vision, which services the luxury travel and lifestyle industries. “Travel and tourism is already the world’s largest industry—contributing $8.3 trillion to the global economy—and it continues to grow. The combination of social media, affordable flights, greater wealth, and globalization have created a new Age of Exploration. Of course, I should add, as a cautionary note, that in today’s political and economic climate, conditions can change quickly and unpredictably.”
The prime reason for the rosy outlook? The continued strength of the economy and its effect on travelers’ pocketbooks. More than half of those surveyed said that clients’ financial standing is having a positive impact on their booking habits—despite recent stock market jitters and other signs of economic headwinds. That high consumer confidence is paired with a determination to experience the world and what might be termed an “inoculation” against bad news. “Our clients are always going to travel,” says Lia Bakin, Co-Founder of In The Know Experiences. “Politics, weather, terrorism... it’s all a part of everyday life now. People want to live life and enjoy themselves.”
Several destinations that faced tourism challenges in 2018 are poised for a comeback this year. While the Caribbean withstood a substantial drop in arrivals last year as it recovered from multiple hurricanes, 68% of respondents said that clients have planned or are planning a trip; 22% said clients are waiting for specific islands or resorts to recover. Concerns about Zika appear to have subsided, with only 2% saying the virus has kept clients from Caribbean vacations. In last year’s survey, 10% said Zika had a strong impact on bookings.
In line with the predictions of many industry observers, the survey confirms the growing importance of “experiential” travel—the desire to take trips that have a meaningful impact on oneself or the rest of the world. Nearly 4 out of 5 respondents (78%) reported higher interest in experiential travel, with 72% seeing growth in once-in-a-lifetime or “bucket list” trips, 64% in adventure travel, and 54% in trips that feature interactions with local people. Other travel trends on the upswing: multigenerational travel, with 76% of respondents saying interest has increased; wellness-focused trips (56%); food-focused trips (44%); and private home rentals and other alternative accommodations (44%).
Cruising will also have a big year in 2019, according to survey respondents, with 81% predicting an increase in cruise business this year. Last year, only 66% of advisors forecast an increase, but 72% ended up reporting higher 2018 cruise revenue in this year’s survey. Helping drive the boom: river cruises, with 60% of respondents reporting an increased interest, and expedition cruises (58%). Asked about the reasons that first-time cruisers get onboard, 58% said the most impactful is that it’s easier to visit more than one destination; rounding out the list are unique itineraries (50%); the size of the ship and number of passengers onboard (38%); the convenience factor and only having to unpack once (34%); and the belief that cruising is a good option for groups or multi-generational families (34%).
Respondents to this year’s survey were far less likely to say that issues such as terrorism, crime, or natural disasters were dampening travel plans. Last year, one third of advisors said concerns about terrorism and crime had impacted their business by at least 30%; this year, only 2% of advisors said those issues had a strong impact. This year, 54% of advisors said that concerns about a future natural disaster had zero impact on their clients’ plans; 50% said the same about the political climate in the U.S.; 44% about concerns about recovery from past storms; 34% about terrorism and crime; and 34% about the political climate abroad.
When asked about specific destinations impacted by current events, Paris was the most frequently cited. (The survey was fielded in December, when the “yellow vest” protests were occurring throughout France.) The Caribbean, Turkey, Mexico, and the Middle East were other common answers. Interestingly, some destinations that endured rough times in 2018—Cape Town with its droughts, Northern California with forest fires, Hawaii with volcanic eruptions—were not mentioned by advisors at all. “People now are immune to the unrest and recover quicker from startling news,” said Julia Pirrung, President of Jetset World Travel. “The world is also much more connected than before, so redirecting travelers is much easier than it used to be.”
By contrast, advisors named a number of destinations on the rise. Always-popular Italy was the top answer, particularly off-the-beaten-path regions like Puglia and the north. “Italy remains untouchable,” says Kimberly Wilson Wetty, Co-Owner & Co-President of Valerie Wilson Travel. “Whether a first trip or your 20th, everyone always wants Italy. There is comfort in the consistency of what Italy offers from the great food and wine, to amazing hotels and sightseeing, as well as the romance of the Italian people and culture.” Also trending? Japan, which is preparing for the 2020 Olympics; Africa, particularly Namibia, Botswana, and gorilla-trekking regions like Rwanda; Egypt, where security improvements have released pent-up demand; Ireland, seen as safe and welcoming; and Southeast Asia, for its perceived good value and the influence of Singapore-set Crazy Rich Asians. Iceland was frequently cited as well, helped by strong word of mouth. “Runaway success shows with Iceland as a backdrop such as Game of Thrones created a buzz and an awareness among travelers everywhere. Social media hummed with increased awareness and interest in Iceland and its culture,” says Bell de Souza, Vice President & COO of Mansour Travel Company.
Indeed, social media has become a powerful force in driving travelers’ decisions on where to go next. More than three quarters of those surveyed (76%) said clients have booked a trip to a destination or hotel that they discovered on social media; for 62%, the booking resulted from a post made by the travel management firm itself, or one of its advisors. Nearly two thirds (64%) said social media has brought their firm new clients. It’s no surprise, then, that 80% said their company has ramped up its marketing efforts on social media in the past year.
Asked about their favorite social platforms for business use, 48% named Instagram, with 24% citing Facebook, 18% LinkedIn, and 2% Twitter. Only 4% say they’re not using social media for business at all.
The power of social media has also been cited as a reason some destinations are receiving more visitors than they can handle. Indeed, “overtourism” was the top sustainability issue in the survey, cited by 72% of respondents as having the most influence on their clients’ travel decisions. A similar concern, the impact of tourism on local cultures and communities, received 22% of responses. Other issues included the impact of tourism on the natural environment or wildlife (16%), the carbon footprint of airlines (8%), high energy consumption at hotels (8%), and the carbon footprint of cruise lines (6%). Sixteen percent of respondents said that sustainability issues had no impact or didn’t apply.
Aside from social media, technology has changed how travel advisors do business in a number of ways. Nearly all (94%) said that clients expect them to respond immediately to questions and requests, and 86% say advisors need to search more sources for rates and/or information than in the past. Needing to explain misinformation that clients discovered online was an impact for 84%, and the same percentage said they face competition from suppliers and other partners that market directly to their clients. Nearly three quarters (72%) have had clients ask them to match rates that they discovered online.
Despite those challenges, the biggest issue that respondents say they face in running their business is, arguably, a sign of success: the difficulty in attracting and retaining new travel advisors. Seventy-four percent said they expect to increase their headcount in 2019, but 50% said that a shortage of qualified talent was their greatest hiring challenge. Liz Sutton, President of Alabama World Travel, spoke of the difficulty of “finding good people, getting them onboarded, and ensuring they become profitable to the agency quickly enough. There’s not enough time to do it all!”
About the Pulse of the Industry Survey:
The Pulse of the Industry Survey was sent in December 2018 to CEOs, presidents, and other senior executives 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 from 50 industry influencers.
If you wish to learn more, click here to access the full deck containing the findings: Pulse of the Industry Survey Results