More Luxury Travelers Turn To Agents

Luxury travel continues to be a highly desired and growing form of discretionary spend.

A new luxury travel survey, released at an Accor Group breakfast at Virtuoso Travel Week in Las Vegas last week, is good news for the health of the market as well as the essential role of travel advisors for luxury travelers.

“The Outlook for Luxury Travelers,” a study by market research firm YouGov, found a booming ultra-wealthy class, with the number of individuals with assets of $50 million or more increasing by 51% from 2010 to 2015.

YouGov is forecasting $277 billion in affluent spending overall this year across the nine discretionary categories that it monitors—Leisure Travel, Fine Dining, Home Décor/Furnishings/Electronics, Fashion Accessories, Fashion Apparel/Fashion, Women’s Handbags, Fine Jewelry and Watches. The firm is forecasting an 11% decrease across six of those categories, but Leisure Travel and Fine Dining are predicted to increase 9%.

Indeed, discretionary spending on leisure travel alone by the affluent buyers in 2016 is forecast to be $119 billion, up 10%.

The survey also found growing use of travel advisors by what it calls “powerful consumers.” Of the total affluent consumers surveyed, 43% said they had worked with a travel agent in the past year, a percentage that rises to 64% for what YouGov calls “super premium travelers,” the very high-end of the market.

Travel advisors are also extremely influential in the decision to book lodging (66% total affluent, 69% super premium travelers), flights (56% total affluent, 77% super premium travelers), cruises (56% total affluent, 64% super premium travelers) and car rentals (71% total affluent, 72% super premium travelers). Those affluent travelers who book hotels through a travel advisor also have a much higher average daily rate, at $414 versus $269.

Cara David, managing director for YouGov, said the survey found that travel is a luxury for many that takes priority over other discretionary purchase. “The experiences affluent travelers have define who they are and this sentiment is particularly strong among Millennials,” she said.

The survey also found growing use of travel advisors by what it calls “powerful consumers.” Of the total affluent consumers surveyed, 43% said they had worked with a travel agent in the past year, a percentage that rises to 64% for what YouGov calls “super premium travelers,” the very high-end of the market.

For example, 85% of Millennials said they will take a luxury vacation before buying any other luxury product, compared with 67% of Gen Xers, 64% of Boomers and 63% of Matures.

On the other hand, the affluent also are exhibiting more caution in their buying due to their experience with the 2008 recession. According to the survey, 72% say they are more resourceful, independent from persuasion and financially responsible. Eighty-one percent agree with the statement “I am willing to pay full price if it means getting the best in service,” and 91% agree with the statement “If you do the research, you can get the best deal.”

According to YouGov, that illustrates a luxury market of two mindsets. One focuses on work, where affluent buyers see products that are high quality, artistically made and wrapped with excellent service. They walk away saying “I know I spent too much, but it was worth it.” Conversely, these affluent buyers also want a deal. They seek victory from their vendors, and they enjoy getting the deal as much as they enjoy the product itself.

YouGov also asked what role travel plays in the lives of the affluent across generational groups. “While each trip may have a different purpose, in general we see differences in the role travel plays by generation,” said David. “Millennials through Boomers look to travel to provide an escape where they can relax and unwind. Matures, on the other hand, are more likely to forego the relation to meet new people and experience new culture.”

Indeed, 68% of Millennials said they use travel to relax, compared with 73% of Gen Xers and 71% of Boomers and just 47% of Matures. Seventy-six percent of Matures said they travel to experience new cultures, compared with 58% of Millennials, 58% of Gen Xers and 59% of Boomers. Millennials (55%), Gen Xers (62%) and Boomers (54%) also use travel to escape, compared with just 32% of Matures. Finally, Matures (61%) say they travel to meet new people, compared with 29% of Millennials, 24% of Gen Xers and 39% of Boomers.