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What is the definition of luxury travel in 2017? It depends.
The future of luxury travel revolves around the fluidity of the digitally-connected consumer mindset, who is comfortable fluctuating between a wide spectrum of accommodations and experiences depending on the context.
“It’s become nearly impossible to profile the luxury client today, because travelers are seeking deeper experiences, inspiration, personalization, and self-discovery,” says Virtuoso CEO Matthew Upchurch. “But they’re achieving it by traveling in a variety of ways, including business, leisure, romantic getaways, family or multi-generational, and personal enrichment.
“These motivations aren’t mutually exclusive, and consumers don’t want to be pigeonholed as a particular type of traveler,” he continues. “They self-identify based on how they view themselves. Their perceptions of themselves and their expectations from their travels vary based on who’s with them and where they’re going.”
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The luxury consumer psychographic is so much more bifurcated today than even a few years ago, partially because of the rise of experiential one-upmanship on social media. In effect, luxury travelers want to upload everything stored in their personal devices into their physical IRL (in real life) travel experiences.
Today, our networks, to a large degree, define our lifestyle value systems and priorities. As the high-end Monster audio electronics company promotes: “You are who your friends are.” Or, as Peter Vidani, founding creative director of the micro-blogging Tumblr platform, posits: “We are what we share.”
Luxury travelers have the resources to accomplish living out their social media dreams. However, according to Upchurch, with so many opportunities available at the click of a mouse, high net-worth travelers are relying more on travel brands and travel advisors to guide the individual consumer journey from conceptualization to conversion.
That personalized stewardship, he says, provides a continual feedback loop between the advisor and client over the long-term, which develops the kind of trusted relationship that Virtuoso has always tried to promote.
On the brand side, based on the growing sophistication of data-driven consumer profiling, travel companies are developing a more customer-centric engagement strategy to drive higher loyalty and lifetime customer value. That’s shifting the industry’s focus from targeting demographic segments, based on traditional connotations of luxury, to psychographic profiles based on personal lifestyle.
“I’m frequently asked about the definition of luxury, mainly because luxury has become one of the most overused words today,” says Upchurch. “My feeling is that luxury is having someone — an actual person — know you well enough that they can anticipate your needs and know what it is you truly value, and then respond by fulfilling that request. It’s simple in concept, but increasingly more difficult to deliver against.”
Skift spoke with Upchurch to try and find a few commonalities in today’s shifting luxury travel landscape. The following has been edited for length and clarity.
Skift: How is the definition of luxury travel evolving?
Matthew Upchurch: Today’s luxury consumer travels in a much more personalized way, taking on various travel personas depending on the trip. Knowing how to ask the right questions to get at the core of what the traveler hopes to experience and achieve is the key. At Virtuoso, we know that’s the role of the travel advisor. People don’t go to advisors for information anymore; they go for clarity and curation. They need someone to distill the abundance of information available to them. What stresses people today isn’t the lack of information; it’s not knowing if they are asking the right questions.
From the Virtuoso standpoint, loyalty is created on two fronts. One is emotional, where the advisor delivers security, relaxation, ease, fun, inspiration. The second is structural, where the more the advisor knows about the client, the more there becomes a mutual investment. And while this is in the context of the travel advisor-client relationship, it also absolutely applies to the hotel-guest relationship, particularly when dealing with luxury consumers.
That’s one of the truest values the travel advisor brings to any supplier, but hotels in particular. The advisor oftentimes has multiple cycles to gather data on their client, which they in turn share with the hotel. It translates into a better guest experience, which fosters brand preference.
I always say automate the predictable, so that you can humanize the exceptional. Normally it’s in the context of technology and its role in enhancing the traveler’s experience. In this case, though, if you define luxury as getting precisely what it is you want, when you want it, it takes a human being to fulfill this promise because so much in the end depends on the quality of human connection.
Skift: How are brands competing to evolve their digital communications to engage the luxury traveler before, during, and after the travel experience?
Upchurch: The biggest issue with digital communications and strategy is that the compensation models are about conversion — driving business directly to the brand. Digital platforms, particularly with the larger brands, are not deemed a success unless they’re focused on converting customers.
Brands need to readjust. The important next step comes in including partners like travel advisors in the communication. If the end goal is to convert the do-it-yourself consumer and divert them from other online channels, then band together with your partners who share a common purpose and increase the likelihood of its effect. Travel advisors, who have a proven track record of driving more business at higher yields, need to be part of the digital conversation.
Without question, relationships and connections make a difference in the traveler’s experience. What has actually happened in our industry is this bifurcation between optimized commodity-economy companies and optimized experiential-economy companies. Within any product or service group, there are do-it-yourselfers, collaborators and delegators, and we have held steadfast in the belief that even as technology becomes more ubiquitous and more powerful, that very expansion of technology actually creates a craving for authentic, genuine, trustworthy human connections.
At the same time, though, it’s also about knowing how to communicate with the customer. Agencies and advisors are using artificial intelligence, chat, and even something as simple as text messaging as a means of making themselves fully available to the client. Advisors will set up a three-way Skype session between themselves, the client and the person on the ground in the destination to develop the relationship further and make the trip more tangible to the client. Whether its email or knowing they can reach the advisor 24/7 via cell phone, the success comes from communicating with that client in the exact way they want to be reached. That’s just another example of personalization.
Skift: Wellness is now mainstream in every luxury travel experience. How is that evolving?
Upchurch: Wellness as a travel niche is expected to hit $680 billion this year. It is expanding 50 percent faster than the overall tourism industry, and we’re seeing hotels respond by implementing services and programs that appeal to this traveler.
Today, wellness travel encompasses physical, mental, and social well-being, as well as spiritual health. There’s no doubt that this trend will only continue to flourish. Last year we launched Virtuoso Wellness, a program and corresponding community made up of advisors who specialize in this niche, and the travel partners who have wellness as their core offering. At Virtuoso Week, our annual event held in Las Vegas, we added a half-day, interactive Wellness Zone, and the response was amazing. More than 650 advisors browsed health and wellness products from 18 preferred partners, while participating in demonstrations that included custom blending aromatherapy body butters. A traditional Mexican healer performed a ritual energy-cleansing, and we had a paddle-boarding yoga instruction and a Turkish Hammam demonstration with a customary soap foam washing.
Our Wellness Community was designed as a hyper-specialization around a passion point that allows our advisors to be at the forefront of wellness trends and the latest offerings for their clients. In just one year, we now have 38 partners across 19 countries that are part of the Wellness Community, with strict criteria for participation. Just having a spa doesn’t make it a wellness property, as spas have become ubiquitous. They have to offer structured wellness experiences with multi-day wellness packages offered throughout the year.
Skift: How are brands adapting their customer experience for multi-generational travelers so parents can still have a luxury experience when traveling with kids?
Upchurch: According to our advisors, multi-generational travel has been the number one trend for five of the past six years, and several years ago it began eclipsing travel with immediate family. Much of what’s driving it can be attributed to the baby boomer generation and retirees. This group has saved wisely and they now find themselves with both means and free time. And while travel has always been a retirement goal, we’re seeing that traveling with their family is of key importance.
From a product side, you’re seeing more suite and villa product being developed and more connecting rooms, all to accommodate families. You’re seeing more family programs, and not just kids clubs, at resorts. It’s the responsibility on the part of the property to include the local culture, to employ residents who are willing to have conversations with guests, effectively becoming a portal to the destination. At Virtuoso, we have partnerships with companies that provide local experiences, not just simply concierge services, to make the destination come alive.
Skift: How is the luxury travel industry encouraging greater diversity and inclusivity?
Upchurch: Tourism has always fostered greater appreciation and understanding of others’ beliefs and cultures, but in this current negative news cycle, travel serves as means of connecting people as opposed to separating them.
In many cases, it’s luxury travelers who have taken the lead in helping troubled destinations. They are already global citizens, both educated in and doing business all over the world. It was the luxury sector that actually helped Mexican tourism rebound from sensational media coverage of its troubles a few years ago, which was something that was quite personal to me, having been born in Mexico and knowing firsthand what an amazing country it is. Consumers, who quite frankly had a healthy skepticism about what they heard, played an incredible role in Mexico’s turnaround.
While they represent a smaller percentage of total arrivals, luxury traveler spend has a greater economic impact. They are also opinion leaders in their communities and social circles. The luxury traveler is the one who delves deeper into culture, goes beyond the typical tourist traps, and is dedicated to having their travel be a force for good through the sustainability of the environment and preservation of cultural heritage. Luxury travelers are early adopters and if you want to see which destinations will return or become hot, look to where they’re heading. They set the trend.
Skift: What’s your take on the transformative travel trend, and what are the factors driving the buzz, both for adults and children?
Upchurch: The transformative power of travel is palpable and never has it been more important and needed, especially as it relates to children. September 11 was an inflection point. People who intellectually knew the power and greater importance of travel started to plan their travels differently. And it changed the advisor-client relationship because the advisor was no longer reactionary; their role became to assist families by planning with purpose.
And while 9/11 may have been a tipping point, the world is — and will continue — going through turmoil. The U.S. is feeling polarized due to our political climate, as is the E.U. due to the United Kingdom withdrawing via Brexit, and many other countries are still feeling the effects of terrorism. In a way, we are depending on future generations to further evolve and fix these issues, and turning them into global citizens by exposing them to different people, cultures, religious beliefs and ways of life — all of which comes from travel — is a crucial element to achieving this goal.
At Virtuoso, we’ve registered the term “Journey to Global Citizenship,” which is this notion of educating children through travel. Exposing them to other people, cultures, languages, cuisine, and showing them what exists beyond their own neighborhood. With travel comes tolerance, an understanding and appreciation for the different. Oftentimes travel will enhance what they’re studying in school, or sometimes it’s a way for grandparents to bring the entire family closer together and further instill family values. In either case, the end effect is that children become more aware of their place in the world while developing a better understanding of others, all of which will ultimately give them an advantage throughout life.
This is an excerpt from a Skift Trends Report, produced in partnership with International Luxury Travel Market (ILTM). The report explores the many disruptions in luxury travel where tired narratives about what upscale travelers want no longer suffice. The very definition of “luxury” is nebulous today, meaning different things to a widening arc of customers with myriad psychographic profiles, age brackets, and personal lifestyles, emerging from a continually expanding range of source markets.