Luxury Market Remains Well-Off

Wealthy still traveling, but some patterns have changed

By: Karen Goodwin

Traditionally considered “bulletproof” in tough times, the luxury travel market sustained some dents this year due to the economy, the war in Iraq and SARS.

In addition, the belief that the wealthy will keep spending in any economic environment has spawned a boom in luxury suppliers, resorts, spas and destinations, all seeking to draw affluent travelers’ attention.

So while the luxury travel market remains relatively strong this year, the combined factors have created an increasingly fierce competition for carriage-trade clients.

“Business was a struggle earlier this year,” said Diane Moore, Crystal Cruises’ senior vice president of passenger sales.

SARS ultimately prompted the cruise line to pull its ships out of Asia, and the war hurt its bookings in Europe. Still, since mid-April, Crystal’s call volume has risen 50 percent, and the line is seeing a resurgence in bookings for Europe, particularly the Mediterranean, she said.

Abercrombie & Kent’s affluent clients are staying closer to home but are “looking for exceptional travel experiences,” said spokeswoman Pamela Lassers.

Many are seeking wilderness locations that combine physical activity with natural beauty and luxurious accommodations, she said.

In Europe, Italy, Spain and Eastern Europe are strong travel destinations, though France took a big hit.

South America is strong, particularly Peru, “due in large part to clients looking for an alternative to China,” Lassers said. Bookings to Alaska and Antarctica have also been good this year, she said.

Active-vacation specialist Butterfield & Robinson reports that Italy, Prague, Spain and Vienna are selling well, while tours to Patagonia are sold out, as are all trips during Christmas.

Luxury operators say clients now book international travel four to six weeks in advance versus the more traditional six to nine months.

Private trips, which can be arranged at the last minute and may be customized, are also selling well agents can easily book private trips with one call, they note.

“With busy professionals, vacation time comes up when it comes up and they have to go,” Gray said. “They turn to us to plan everything from A to B.”

If they’re retired, “they postponed travel to see what would happen in the world,” Crystal Cruises’ Moore said. “Now they have more confidence.”

Another recent change: Affluent clients are shopping around for the best value. “That’s another sign of the times,” Moore said.

Still, high-end clients are “sophisticated, well-informed and well-traveled consumers who view international travel as their birthright,” said Ignacio Maza, executive vice president of supplier relations for Virtuoso, a luxury agency consortium.

“Although overall volume to certain destinations abroad may not be as strong as in years past, it is still substantial, and leads the numbers produced by other travel organizations in the U.S.,” he said.

Virtuoso agents are dealing with this year’s challenges by streamlining operations, concentrating on top clients, marketing aggressively, staying apprised of new developments and supporting Virtuoso-preferred suppliers, Maza said.

“Upscale clients want expertise at the point of sale, value for money spent, custom-tailored experiences, exceptional service before, during and after the trip and the ‘inside track’ for every destination,” he said. “In summary, they want a ‘super-agent’ to handle their travel. The expectation has never been higher.”