Luxury consumers value meaningful experiences over amenities when traveling. // © 2014 Thinkstock/Soft_Light
While upscale consumers are tightening spending in a number of areas as the recovery from the recession limps along, the good news for travel agents is that they are not skimping on experiential luxuries such as travel.
That’s because travel delivers a big return on investment in terms of happiness and personal satisfaction, according to Pam Danziger, president of Unity Marketing, a consulting firm focused on the buying behavior and motivation of luxury consumers.
“Affluent consumers have become very strategic,” Danziger said. “They are weighing the scales of what something costs versus what it is really worth to them and then saying ‘yes’ or ‘no.’ They’re also now a values-driven consumer, and they’re going to align themselves with brands and service providers that are most aligned with their own personal values.”
Although travel has escaped the belt-tightening experienced in other product and service categories as part of what Danziger describes as “a mood toward austerity,” that doesn’t mean the sky’s the limit on travel spending for affluent consumers.
“Upscale travelers are looking to save money,” Danziger said. “They are very willing to pay for something special but they are not willing to just spend hand over fist. What they want is value.”
In a recent Unity Marketing survey of 1,400 wealthy consumers, including 800 affluent travelers, 85 percent said they are willing to pay a premium price for the highest quality amenities and experiences when they travel. However, 71 percent said it was important that they find the lowest price when evaluating multiple travel options.
Price sensitivity among luxury travelers is showing up in a phenomena Danziger calls “trading off.”
“Affluent travelers are willing to save money in one place in order to spend it in another,” Danziger said. “For example, they will travel coach instead of first class but then spend more on the hotel or on experiences in the destination. That’s economizing that makes sense to them. Of course, each traveler is coming at it differently, but to assume that they all want to go first class all the way is a very common misconception. One size doesn’t fit all. That is the number-one thing travel agents need to understand about this market.”
When affluent consumers travel for pleasure, they put special experiences that create memories and visiting new places first. And they don’t want to keep it to themselves. In the Unity Marketing survey, 86 percent of traveler respondents said that an important part of travel is having interesting stories to share with others when they return.
Danziger recommends that agents act on that information in a way that benefits both the client and the travel agent.
“Offer a complimentary memory book to your clients by partnering with a provider like Snapfish or Shutterfly,” she said. “Everybody has a phone and takes pictures. You can do this fairly inexpensively. It’s easy for clients to upload their images, and you will have your name on it. You are providing a living memory that your clients can share and it’s a testimony to your service.”