Should luxury companies introduce lower-priced offerings, or do they risk diluting their brand and/or cannibalizing business from the main brand? We look at how several high-end travel companies are approaching the challenge.
It’s quite commonplace for major hotel chains to diversify their product offerings to include a “millennial” brand or two. Hilton, Marriott and IHG have all successfully managed to develop lower-priced hotels without cannibalizing their luxury brands.
But hotels have the advantage of brand segmentation experience dating back three decades. On the other hand, there’s little precedent for luxury tour operators and cruise lines looking to “downscale” their offerings without the potential for hurting the higher-end business.
For upscale brands, there’s a fine line between luxury and luxury for less. The debate is at what point you diminish the reputation of the brand in the quest to attract new audiences with smaller pocketbooks.
According to Rebecca Robins, global director for international brand consultancy Interbrand, “The strongest brands stay true to their DNA, while continuing to evolve and innovate to remain relevant. Developing new offerings for people who are demanding different things of travel experiences is part of that journey. How a business approaches the branding of new products and services is crucial, in protecting the equity of the master brand, while positioning the new offer in a way that’s both relevant and credible.”
Several cruise companies are attempting to navigate these tricky waters in the effort to attract next-gen travelers. This winter, Lindblad Expeditions is partnering with wellness company Exhale for new cruises on the Sea of Cortez in Mexico. Base Camp Baja voyages will take place aboard the 30-cabin National Geographic Sea Bird, a floating base camp for adventurous, wellness-minded travelers who are allowed to design each day as they wish. The sailings will combine the rigors of standard Lindblad expeditions with plenty of wellness options, like yoga, meditation, happy hour massages and healthy food options.
Lindblad is distinguishing Base Camp Baja voyages from its usual fare by price and timeframe. According to spokesperson Patty Disken-Cahill, the shorter itineraries (three and four days) are specifically geared to younger travelers, and priced accordingly ($1,990 per person based on double occupancy). The program is a pilot for a possible new series of shorter, less expensive adventures, which, according to Jacinta McEvoy, vice president of global sales, “has the end goal of attracting younger clientele for standard Lindblad expeditions in the future.”
2018 is the inaugural year for U by Uniworld, a river cruise concept designed to appeal to travelers between the ages of 21 and 45. Two ships are being redesigned from the outside in, according to CEO Ellen Bettridge, starting with a hull that is painted black. Bettridge says the U by Uniworld product, which will ply European waterways, will feature “more active excursions, more time in port, later starting times for morning programs and lower prices.”
Millennial-style features will include options for communal dining and a silent disco, where everyone can dance to the beat of their own drummer (via earbuds). Bettridge notes that the U approach takes many of its cues from sister company Contiki, a tour operator which has focused on travelers 18 to 35 for more than 50 years. Both are owned by The Travel Corporation, a privately-held leisure company.
Robins likes the approach. “Uniworld has taken a smart approach in U by Uniworld, creating a name that is very simple, direct and that speaks directly to the audience they want to attract,” she says. “The link with Uniworld is clear, while the endorsed approach ‘by Uniworld’ gives a degree of flex with, and sense of being ‘a part’ from, the masterbrand.”
Meantime, on land, Butterfield & Robinson’s Bistro line was introduced in 2012, offering lower-priced alternatives on some of the company’s signature routes. But according to CEO Norman Howe, B & R has pivoted a bit with Bistro. Although still an option in several European destinations, Bistro is now being used more frequently in places whose infrastructure doesn’t support the usual B & R luxury standard. In both Morocco and Cambodia, for example, the company literature promotes “stylish 4-star properties that offer a casual and comfortable stay. Often without a 24-hour concierge or room service, they tend to be smaller family-run hotels.”
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Photo credit: U by Uniworld is developing a river cruise concept appealing to younger cruisers. Pictured is Regensburg, Germany, a stop for river sailings. U by Uniworld