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affluent travelers

Current Insights into Today’s Affluent Travelers

December 21, 2016

What does luxury mean to the average affluent traveler? There is not really an “average” affluent traveler in today’s leisure travel marketplace which can be highly personalised and the concept of luxury is remarkably subjective. Luxury is said to be encountered on a case-by-case, almost real-time basis, the definition of luxury can vary from traveler to traveler, whether they’re enjoying a finely appointed hotel room, a lavish spa treatment or an indulgent dining experience.

That means defining what luxury travelers are looking for—so brands can deliver it—is far from simple. What is simple is the understanding that luxury travel is on a big upswing, growing faster than overall travel. So how can industry suppliers make an impact with big travel spenders, earning their loyalty and a share of their trip budget? These trends shed light on what it takes to meet their needs.

Aiming for the “Big Spender” Target

Suppliers need to brace for change. Affluent travelers come from every age group and every corner of the globe. What they share in common, of course, is a large appetite for travel and money to spend. Industry consultancy, Resonance, illustrates this point in their 2016 US Luxury Travel Report. They found that the wealthiest 5% of Americans take about 14 trips per year (with business and leisure trips almost evenly split), compared to just 4.8 by the average U.S. traveler. And they estimate an average expenditure of $3,115 per person per vacation, which adds up to affluent US travelers spending more than $390 billion per year on leisure travel alone.

If the prevailing image of the sophisticated jet-setter is a baby boomer, it’s time to reassess. Forbes’ Luxury Travel Trends Shift As Affluent Millennials Act On Their Aspirations reveals that nearly one quarter of US adults making an annual household income of more than $500,000 are Millennials. What’s more, among Millennials:

  • 78% choose to splurge on experiences over “things”
  • 23% are more interested in going abroad than older generations

Currently Millennials make up 20% of all international tourists. When these statistics are combined with the conventional knowledge about the generation, a picture of tomorrow’s affluent traveler starts to emerge. These travelers—who will come from around the globe—value experiences and want them to be authentic and immersive. Owing to their age and life stage, many can be expected to travel in groups, with friends or extended families. Read It’s a Family Affair: Multigenerational Travel for more.

Millennials are digital natives who will expect brands and other travel partners to have apps, reviews, booking capabilities, etc. Travel Apps: Usage, Awareness, and the Generational Divide gets into details. Yet it’s worth noting that as affluent consumers with money in their pockets, they will have the means to pay for services that keep them from experiencing hassles, even if that means higher prices. In other words, if an app or website doesn’t enable them to do what they want to do, they’ll turn to personal service or opt for competitor’s offering.

For more generational insights, read Do Millennials Make The Most Attractive Customers For Travel Companies? and How Travel Companies Are Gearing Up to Accommodate Generation Z.

Pinning this market down to a particular age range, however, may not be as effective as approaching travelers based on their behaviors and recognizing that their purchasing patterns will change depending on the circumstances of their trip. For instance, leisure travelers, regardless of their age, can be targeted based on the purpose of their trip—are they traveling primarily for business but adding in elements of personal fun or relaxation? Are they in search of a health- and wellness-infused getaway and willing to spend whatever it takes for a customized path toward restoration? Are they first and foremost seeking ease and convenience and want a third-party to take care of the research and booking details so all they have to do is pack-and-go?

Changing Influencers

When it comes to researching and booking trips, consumers at large have the world at their fingertips. But what are the most affluent travelers doing to find inspiration and persuade travel decisions? According to Virtuoso’s Luxe Report, the most influential source of information for the company’s highest end clientele are word of mouth from friends or family, followed by a travel advisor’s advice, travel website reviews and recommendations, travel publications, and social networking sites.

See 3 Ways Travel Suppliers Can Use Travel Reviews (insert URL).

Although, the tides are turning, the MMGY Global 2015 Portrait of American Travelers found that affluent travelers are looking to friends and family less than in the past. 37% considered their advice influential, down from 48% just the year before, while 41% visited a travel review site for information, up 7% from the year before. And more than half of these travelers (53%) said they trusted reviews and ratings by other consumers more than the reviews of traditional standard bearers AAA and Forbes.

Destinations: Off the Traditional Path

It almost goes without saying that travelers with money to spend on extensive (and expensive) vacations are less interested in visiting traditional destinations—because they’ve already “been there, done that” or they can simply afford to get out and experience far-away, more exotic locales.

Travel Leaders Group combined data from its survey of its luxury travel agents and the 2016 Global Peace Index to create comprehensive list of top destinations that might most appeal to affluent American travelers. Topping the list was New Zealand, followed by Iceland and Portugal. Luxury tour operator Ker & Downey, took a different approach on their The Best Places to Travel in 2017. They think Malta, Uruguay, Kenya, Antartica, Scandinavia, Columbia, Philippines, Sri Lanka, Malaysia and Russia are the destinations to explore, based on their experience with affluent travelers.

Read Making a Difference on a Volunteer Vacation for more on trendy vacation destinations.

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