What to Know About Luxury Travel in 2021 and Beyond

David Kolner, senior vice president of strategy for Virtuoso, has been busy crunching numbers. And while that behavior might not sound all that surprising for a luxury travel network executive who is frequently tasked with predicting the future, Kolner’s research has revealed an interesting observation about the not-too-distant past for a great many travel advisors: Their experience during the pandemic has probably been quite different from that of their affluent clients.

Kolner pointed to economic research data released earlier this year by the World Travel & Tourism Council, indicating the global tourism industry lost nearly $4.5 trillion and more than 62 million jobs in 2020 — a worldwide impact that was 18 times worse than the financial crisis in 2008.

But Kolner was also quick to mention a recently released world wealth report conducted by the Knight Frank real estate and research firm, finding that the number of ultra-high-net-worth individuals — folks with assets of at least $30 million — has grown by 2.4% globally during the pandemic and increased by 4% in the U.S.

“There’s this real difference between a lot of people working in the travel industry, who are financially and mentally trying to keep regenerating themselves amongst so many calamities and crises in our category, and their affluent clients, who are dying to travel,” Kolner said. “And they are wealthier than ever, which is a major difference from the 2008-2009 financial crisis.”

Kolner said a big driver of travel spend among high-net-worth individuals is confidence in their finances and savings. The economic data he is seeing points not only to a strong return for the luxury travel market, but also a relatively quick one, in part because many affluent individuals have more money today than when the pandemic started last year.

“It’s a great opportunity for travel advisors,” Kolner said, adding that Virtuoso is actively working to help advisors better understand how their pandemic experience has likely been very different from that of their clients. “Don’t be afraid to charge fees. Raise your prices. Don’t be afraid to offer suites, bungalows, upgrades — all those things. Many advisors are surprised clients are saying yes to huge expenditures and amazing products. But now is the time to offer those, particularly to affluent travelers.”

Luxury Leisure Travel Is Booming

Raschinna Findlay, an advisor with Protravel International in Beverly Hills, Calif., works regularly with a number of celebrity and film industry clients. She said she has been up late a lot in recent weeks.

“It’s been booming here for the last month or so,” Findlay said. “Once the reality of the vaccine started to kick in, more and more people just started calling.”

Many advisors are surprised clients are saying yes to huge expenditures and amazing products. But now is the time to offer those, particularly to affluent travelers.

Findlay said she has been busy booking trips not only for later this year, but also in the very near term — including one client she scheduled on an Arctic Circle cruise this month, and another planning a trip to Greece in June.

“It’s just been great,” she said of the dramatic uptick in bookings. “It’s like getting back to normal, and I’m so grateful.”

David Hu, president of Classic Vacations, said the luxury wholesaler has enjoyed an unprecedented surge in sales this spring.

“March was the highest booking month in the history of Classic,” Hu said. “And this is with 40% of our destinations still closed, and it just continued to accelerate and grow in April.”

Destinations such as Hawaii, Mexico and the Caribbean have been attracting the most interest, according to Hu, who said Classic has seen a substantial increase in bookings for the balance of this year, as well as in 2022.

“The challenge is being able to answer all the phone calls,” Hu said. “Nobody was expecting this quick of a rebound in terms of demand. Everybody knew demand was going to come back, but nobody expected the vaccination rates would be so quick, and that all of a sudden that would trigger this snowball effect.”

Stefanie Schmudde, vice president of product development and operations for Abercrombie & Kent (A&K), said some of the luxury tour operator’s most expensive products have been extraordinarily popular.

“All of our Private Jet Journeys are sold out,” Schmudde said of A&K’s 24-day, $155,000 Around-the-World small group tours for 2021.

Schmudde noted her company’s 2021 figures are not yet back to where they were in 2019, but new bookings for later this year and into 2022 have picked up dramatically over the past couple of months.

“I really do attribute that to the increase in vaccinations in the U.S. and around the world,” she said, noting A&K’s Africa safari products have been very popular, as well as private yacht expeditions in the Galapagos. “For Americans whose savings were not affected by the pandemic, the strong stock market is encouraging guests to reimagine their postponed holidays, and we are seeing a lot of people really gravitate toward the iconic bucket-list trips.”

Trends Are Shifting for Luxury Hoteliers

Ben Trodd, senior vice president of sales and hotel marketing for Four Seasons Hotels & Resorts, is not quite ready to declare the global luxury hotel industry entirely out of the woods, but he does not have any trouble saying his company is recovering.

“As the pandemic really hit its low point, we had about 70% of our hotels closed,” Trodd said. “As of today, we’ve actually got 86% of our hotels open globally, and it’s great to see that change.”

Bookings for many of the Four Seasons’ resort properties — particularly those in more remote locations — have been extremely strong, according to Trodd, who said that sector of the hotelier’s business is “in many cases actually pacing ahead of the same period in 2019, which was one of the very best years for the hospitality industry.”

Trodd also pointed out that the more than 750 private homes and villas in the Four Seasons’ portfolio continue to be extremely popular today and for the coming months. Meanwhile, Four Seasons’ products in the Maldives, Dubai, Hawaii and Punta Mita and Los Cabos, Mexico, “are just seeing great demand from the U.S. market.”

The hotelier’s city properties, however, have been much slower to catch up, according to Trodd, who noted that sector of the industry is much more reliant on business and group travel, which have lagged behind the leisure recovery.

“Having said that, we’re actually very bullish on the return of business travel,” Trodd said, noting that market has been strong for the luxury hotelier in destinations such as China and Japan, and is now building in the U.S. “We’re starting to see a lot more demand for business travel.”

Shannon Knapp, president and CEO for The Leading Hotels of the World, agreed that affluent travelers still seem to be seeking out more remote, less crowed locations where they can find space, fresh air and privacy. Demand for beach, countryside, lakeside and mountain destinations spiked during the pandemic, according to Knapp.

“Bookings in beach destinations are nearly double what they were in 2019,” she said. “One of our resort properties in the Maldives is up almost 500%.”

Like Trodd, Knapp also said Leading Hotels of the World properties in city destinations have been slower to bounce back during the crisis, but she remains confident about her company’s options for an urban getaway.

“We are already seeing progress in bookings and interest for cities that are starting to reopen,” she said. “One positive indicator is that daily search traffic on our website for New York has tripled since the start of 2021.”

Demand Soars for Premium Air

Protravel advisor Findlay said she has been busy booking her luxury clients on private jets this spring, and she is sure that element of her business is here to stay.

“Once you have boarded a private jet, and you know what it’s like, it’s hard to go back,” Findlay said with a laugh, noting some of her clients tried the high-end products for the first time during the pandemic for safety reasons. “The private jet is definitely going to be a wave of the future for the people who can afford it.”

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Kimberlee Evans, owner of An Extraordinary Traveler, a Nexion Travel Group affiliate in Colleyville, Texas, has not sold any private jet trips for her luxury clients, but she said her front-of-the-plane bookings jumped during the pandemic.

“I’m seeing a lot more clients who want to fly business class,” Evans said, adding that she has a group of five adults flying front cabin to Africa this summer for a luxury safari. “People seem to want more of that private experience from start to finish these days.”

Avi Mannis, senior vice president of marketing for Hawaiian Airlines, said the carrier saw its premium cabin perform well throughout the pandemic, and that trend has continued during the early recovery. Mannis also noted Hawaiian Airlines’ summer bookings are on pace now with what the airline saw in 2019, but its front-of-plane demand is even better.

“We might actually exceed 2019 overall revenue performance in the premium cabin,” Mannis said.

The private jet is definitely going to be a wave of the future for the people who can afford it.

Although Air Tahiti Nui only restarted flights between Los Angeles and Papeete, Tahiti, in early May — following a nearly three-month tourism shutdown in French Polynesia — Nicholas Panza, the airline’s vice president for the Americas, said the carrier is already seeing very strong demand for its business-class product.

Air Tahiti Nui is not currently offering as many flights as it did in 2019, so its front-cabin sales do not yet measure up to that high point. But Panza was quick to note the airline’s premium product, which is commissionable to travel advisors, has benefitted from destination closures elsewhere around the globe.

“We are getting visitors who were originally planning to go someplace else, and Tahiti is on their bucket list,” he said. “It’s an aspirational, wonderfully rewarding destination, so they said, ‘We can’t go to point A or point C, so let’s go to Tahiti.’”

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Responsible Travel: A Luxury Requirement?

In April, Virtuoso released the results of a survey in which 82% of the consumer respondents said the pandemic has made them want to travel more responsibly in the future, and 70% of participants said traveling sustainably enhances a vacation experience.

Virtuoso’s Kolner also mentioned a recent MMGY leisure traveler survey in which 83% of the respondents said they are open to changing aspects of their future travel behavior to reduce their impact on the environment.

“There has been a focus on sustainability for at least the last 10 years,” Kolner said. “But I think the pandemic might be that tipping point, where the interest in sustainable travel really takes off. I think travelers are just wanting to be more responsible coming out of the pandemic, [and] we think this will be not even a trend, but a permanent addition to the way this entire category of affluent travelers will continue to travel in the future.”

Leading Hotels of the World’s Knapp said her company’s guests have been seeking out authentic and enriching experiences during their vacations for years, and increased focus during the pandemic on tourism’s impact — not only on a destination’s environment but also its people and communities — has fueled a commitment to more responsible travel.

RELATED: Community Voices: Why Sustainable Tourism Should Be Top of Mind as We Head into Recovery

“Luxury travelers want to support the small businesses and communities that make a location unique,” Knapp said. “They want to leave a destination better than they find it, and they want to feel like they are being enriched while enriching the destination.”

Not all luxury travelers are, however, focusing on how they might enhance their vacation destination, according to Nexion advisor Evans.

“Honestly, I don’t have people calling me saying, ‘Where can we go where we can make a difference? Where can we go that we can give back?’” Evans said. “Right now, everybody is so anxious to get out and be able to travel again, and for me and my clientele, people just want a vacation.”