Luxury travel is a great business for travel agents. There are four
primary reasons why I encourage every agency (traditional or
home-based) to explore the luxury market.
1. When done correctly, luxury travel is more profitable than
almost any other segment of the industry.
The luxury buyer is demanding and will take a lot of your time,
however he or she is willing to pay for excellent service. That
will more than compensate you for the time required.
A friend of mine sells real estate in a resort area just outside
Yosemite Park in the foothills of the Sierra Nevada Mountains.
The area she works in offers a mix of vacation houses as well as
permanent housing with the vast majority of homes priced between
$80,000 and about $600,000.
In California, realtors traditionally earn 6 percent commission.
That means the value of the average sale in this area to the
realtor is between $4,800 and $36,000. Like most markets, the
majority of the homes are priced toward the lower end of the range.
She makes a lot more sales with commissions that are under $12,000
than over $12,000 (the commission for a $200,000 home).
However she has repeatedly told me, “There is far less work in
handling a $300,000 sale generally than a $100,000 sale.” She cites
the following reasons:
A. The buyers are smarter. They understand the process of buying
a home and what’s involved. They ask more intelligent questions and
as a result, end up taking much less of her time.
B. They are more likely to have sufficient money and good credit
to buy what they want. Another time-saving factor for the realtor:
the wealthier shopper is well prepared. They are pre-approved for
loans and have a very good idea of the features that are most
important to them in finding a new home. That saves time because
they only want to look at homes that meet their criteria.
C. They have reasonable expectations of what their money will
buy. They don’t waste my friend’s time looking at homes they cannot
afford. One of her recent prospects described what they wanted in a
home and told her what they could afford. Unfortunately the two
were way out of sync. As she put it, “they want a $250,000 home for
less than $100,000. After showing them a few homes, I realized they
must get their expectations in line with what they can afford or
come up with a lot more money.”
If you sell travel, this should all sound very familiar.
An excerpt from Bruce B. Tepper’s new book, “Mastering the Art
of Selling & Marketing Luxury Travel,” available by calling
480-443-0098 or on the Web at www.joselyntepper.com.