With the annual International Luxury Travel Market as a starting point, we examine the surprising trends shaping the luxury travel sector today.
The International Luxury Travel Market, the preeminent fair in its field, highlights the trends that are revolutionizing the luxury travel arena.
Since its premiere in 2002, the annual International Luxury Travel Market (ILTM) has brought together the most exclusive exhibitors – the most senior decision-makers of the most important luxury travel trade companies – with the top luxury travel buyers for a four-day global trade event operating like a private members' club.
The creation of a successful trade fair for this small but increasingly lucrative and powerful sector is proof positive that a substantial phenomenon is occurring. And last December's show in Cannes, France, brought to light some surprising conclusions about where the realm of luxury travel is headed.
As the rich get richer – Forbes estimates a total of 793 billionaires worldwide – the market in luxury travel has flourished and is constantly growing. And the emerging trends that are being shaped by this upswing have gone against the grain of what the average person expects the rich to do with a large influx of cash. Instead of retiring to gilded palaces where fountains flow with Cristal and victuals are eaten from platinum plates, luxury travelers have transformed luxury travel into a sphere that revolves around experience and education. They're looking to go beyond the traditionally luxurious hotel experiences, trying to outdo each other in the stakes of cultural-immersion travel.
We spoke with three luxury travel experts to hear their views on the market as it exists today and where they see it going tomorrow.
Defining luxury travel is, in itself, open to a great deal of interpretation. According to Debbie Joslin, ILTM's Exhibition Director, "Today's luxury travelers are not restrained by price, but by time. This trend has become much more apparent over the past five years, and looks set to continue. Cash-rich, time-poor luxury travelers have the pronounced expectation that all their needs and wants should be pre-empted and exceeded."
Voted Best Travel Operator in the 2007 Wallpaper* Design Awards, James Jayasundera, who operates the London-based Ampersand Travel, likes "to believe that 'luxury is in the experience' rather than in how much one spends on a holiday or the thread count of one's sheets. Luxury travel means minimizing stress and discomfort while maximizing enjoyment and the use of one's time and resources. Luxury travelers value their time, money and opportunities, spending freely whichever one is in greatest abundance to them."
"I get so fed up – a lot of people claim they're offering luxury and it's such a pseudo-idea of luxury," exclaims the incredibly well-traveled Sophy Roberts, Departures' Editor-at-Large and an ILTM conference moderator.
Referring to the unstoppable rise in prices for hotel suites and the new perception of luxury tourism as "an extraordinary phenomenon," she notes that "it shows that sometimes people have more money than sense. Sometimes we've got to stand up and call a halt to the endlessly rising prices. It's conspicuous consumption that doesn't question the market." There is, however, another side to luxury travel, as she's well aware. "There's also a mirrored dynamic market of very well-traveled, educated people," and a newer breed that's "starting to discern the difference between real luxury and pseudo-luxury." Real luxury travel, in Roberts's opinion, is "more subtle, more private, much less repetitious."
Pseudo-luxury, as Roberts terms it, is "luxury" with all flash and high prices but no substance. This, however, will not be a long-term phenomenon, she feels. "It's a question of education: the more people travel, the more they see and learn, the less they'll tolerate. It's about getting value for money," she says. "To give an example, look at a brand like Hermès: its bags are the most expensive around, but people still keep buying them because they're built to last."
Joslin agrees with the education suggestion. "Luxury travelers are typically looking for a more authentic, experience-driven holiday than ever before," she says. "The more sophisticated they become, the less they desire some of the typical travel motivators, like sun and sand."
Indeed, the mass tourism market grew by only 4.5% in the first part of 2006, while almost three-quarters of ILTM exhibitors saw double-digit growth over the same period.
"Travel has always been considered one of our great indulgences. It personifies elements of escapism like no other luxury commodity can," Joslin explains. "Luxury travelers are much less influenced by external market factors than mass market travelers, which helps give the sector more resilience."
But luxury, it seems, does come with a financial cut-off point, according to Roberts, who sees price resistance in the established markets of Europe and North America.
Jayasundera, however, disagrees in principle, remarking, "In theory, there should be no cut-off point if you are able to convince the client that you can deliver what you promise."
"Hotels are no longer enough. Four-room suites, Michelin-starred food, and spas are no longer enough. People already experience all of that on business trips," says Roberts, with the suggestion being that when they have to pay to travel, they're not going to pay for something they can usually get for free. People, especially a group that Roberts dubs "thrill-seekers," are looking for something that "stimulates the mind and the body."
The buzz phrase that applies here is "conversational currency" – the search for extraordinary experiences that will make your post-vacation conversation far more exciting than your neighbor's. "In today's society, travelers ... desire to be challenged, to learn and gain understanding about a destination," Joslin explains. "An individual can only garner conversational currency about a destination through unique insight, which can only be experienced first-hand."
Sometimes conversational currency is, however, little more than reverse snobbery, in a sense. "Everybody likes to perceive themselves as adventurous and cutting edge, yet on the other hand, the expression 'no pain, no gain' holds true," Jayasundera says, describing a client's trip through India that involved 8-hour journeys over very bad roads. She was not averse to this adversity, saying, "It's good to suffer a little; it makes it feel all the more worthwhile once I reach my destination."
"ILTM's mid-year market research indicated that travel sellers have seen rapid growth in interest and bookings in sub-Saharan Africa, India and the Indian Ocean, South America, Dubai and the Middle East," Joslin says. The services that exist there are already up to European and US standards, so the enticement lies in their cultural identities. "Who wouldn't want to enjoy a glass of Veuve Clicquot while sleeping in a tented safari camp deep within a remote game reserve? These elements are no longer mutually exclusive."
Traveling as a family has seen a noticeable growth in the last half-decade. The fact that parents are frequently older and more financially secure with smaller, carefully-planned families might be part of the explanation, but Roberts tends to put this down to a post-9/11 desire to not be separated from family, which is becoming more precious as the work/leisure divide grows. She also ties this into the jet/yacht/villa trend, which makes for a more family-friendly travel experience. For her part, Joslin also projects "an increase in multi-generational family holidays" in the coming years.
Roberts, looking forward, says, "Geographically, more places are opening up. Central Asia, parts of Latin America – all are opening up properly, offering more than just their already existing natural beauty." She adds China – "outside of the three big cities" – to that list. She foresees "more extreme thrill-seeking: heliskiing in Kazakhstan, fishing in Siberia," a potential market filled "with hedge-funders looking for a rush."
"I think the biggest growth area is that of experiential travel – this can mean anything from a private jet tour of the world's most remote islands to a community-based trip that contributes to the economy and infrastructure of the host country," according to Joslin. "The key is the creation of memorable experiences – the über-affluent now value unique memories more highly than conventional status symbols," she says, adding that "the polarization between mass market and luxury travel will continue to widen."
Jayasundera, looking a decade down the line, says, "I feel the buzzword for the luxury travel industry is service. With the advent of the internet, the luxury product is available to a much larger market, so true luxury will lie in the higher levels of service provided to make planning a holiday completely stress-free, with every last detail and whim taken care of, along with all the back-up service during and after the holiday."
As Roberts pointed out, other concerns might have a greater effect on shaping the future of travel, with ecological concerns at the head of the list. "Increasing consciousness, specifically at the top end, that we have to be aware of the environmental impact of traveling, will result in consumers' taking a lot more responsibility," she suggests. Realizing the effect one's "carbon footprint" has on the environment will result in a decrease in short breaks (which will have a subsequent effect on the budget airlines that have boomed from catering to this market) and put the focus on taking longer single vacations with less of a carbon footprint.
THREE DREAM/FAVORITE DESTINATIONS
Trancoso, Brazil: Because the beach scene here is so alive and exciting – it's still mostly a Brazilian thing – yet it has a relaxed, flip-flop glamour. It's a small fishing village on the Bahian coast, with some of the best private beach houses to rent in all Latin America. It's what St. Tropez must have been like a very long time ago. Even with St. Trop's Bardot history, Trancoso is even sexier...
The Orkhon Valley, Mongolia: There's a private riding and polo camp here, in the middle of the Mongolian steppe, run by the precious-wool hunter Christopher Giercke (he supplies Hermès with high-grade Mongolian cashmere). You stay in gers, the nomad's round tents, and visit shamans, ride horses, watch polo tournaments, fish, swim, do yoga, eat caviar and drink fermented mare's milk – with the best host in the world. You can take the camp over exclusively for a group for friends.
Antarctica: There is still some to'ing and fro'ing on how to do this destination in style – in real luxury – but to my mind, gold-tapped bathrooms aren't really the point. The boat needs to be warm and safe, with a very experienced captain (conditions are, of course, treacherous). It is what lies outside that counts – one of the most compellingly beautiful, serene, moving, otherworldly experiences imaginable. It simply does something to you that all the private butlers in the world will never, ever touch.
The pristine Himalayan Kingdom of Bhutan, for its old fashioned and charming traditional values and its wonderfully exotic temples, framed by snow-capped mountains.
Ahilya Fort on the banks of the Narmada River in Madhya Pradesh, as it captures the essence of India. Lost in time, it is a rural treasure, with stunning temples, sari-clad women bathing in the river, river crossings on long boats and delicious traditional food.
Sri Lanka, for its fusion of cultures, its extraordinary diversity of landscapes and its delightful and fun-loving people.