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Despite a subdued economy and weaker Australian Dollar, which has lost more than 10 percent of its value against the U.S. currency since April, a new survey shows Australians are spending big on luxury travel.
And travel advisors are reaping the rewards.
The Australian Luxury Traveller 2019 survey, conducted by corporate and luxury agency Goldman Group in partnership with AccorHotels, found that 45 percent of well-heeled respondents plan to spend at least $30,000 on travel this year and 19 percent will spend over $50,000.
The survey is based on responses from 316 affluent, mature Australian travelers who take up to four international vacations each year.
Goldman Group Joint Managing Director Anthony Goldman is not short of examples of big-spending clients. Recent bookings included a multi-generational family cruise costing $350,000. Another family spent $280,000 on an African safari experience including helicopter touring, while a client racked up a $250,000 bill for a special birthday party at a luxury lodge for 100 friends.
But Goldman stressed that luxury travel is no longer “about chandeliers and polished silver – it’s about personal, special experiences.”
This view was shared by Anna Burgdorf, general manager, product and marketing of Flight Centre Group’s luxury arm, Travel Associates.
“What is becoming more apparent is also the desire for travelers to have new experiences which enrich their lives and provide purpose to the holiday, whether that purpose is for cultural immersion, greater cultural understanding or education for younger generations,” she said. “Coming home with new insights, better cultural understanding and precious memories which will live on is certainly something important to our clients and can lead to some really fabulous, complicated itineraries which are clearly going to deliver amazing experiences.”
Specialist agency The Tailor, which has been active in the luxury travel market since its establishment in 1998, is also among those benefiting from the spending spree.
Chief executive Kirsty Siekmann noted that clients are tending to spend more. With itineraries, even for local holidays, starting at $1,000 per person per day, The Tailor prides itself on “the inclusion of customized touring experiences,” Siekmann said.
But the agency works hard to command the high prices, according to Siekmann: “Our clients have high budgets and even higher expectations, which is totally understandable within the realm that we work.”
She explained that luxury travel is extremely high touch, with the booking process involving “hours upon hours of work,” sometimes undertaken a year ahead of the trip.
“It is a fully collaborative process, usually starting with an initial phone call between the partner agent, their client and ourselves, to gain an understanding of what the clients want, what they have enjoyed before, the pace at which they like to travel,” she said. “Then we create a fully customized proposal, outlining what we recommend and why. From there, the itinerary is refined until the client is fully happy to proceed with booking.”
Budget Travel Takes More Effort
Ironically, the cost of trips is sometimes inversely proportional to the effort involved for agents, said Karen Majsay at Sydney-based Low & James Travel Associates.
“In fact, it usually works in reverse, as a lower-budget trip can often involve more work and more research to get it right as we still want to provide the most premium experience to that client for their budget, and this may mean more shopping around, especially more research on hotels,” she noted.
Majsay explained that higher-value trips are often made up of major components like business class flights, a cruise, or a major tour, “and these are much easier to book and work on than tailor-made trips where we are booking every hotel for a month in Europe individually.”
Big Spenders Want Value
Big budgets don’t mean carefree spending, according to the survey, which found price was still the number-one factor influencing travel decisions. Seventy-six percent look for discounts and special offers when seeking accommodation, with four out of five respondents saying the benefits of booking through travel agents, such as room upgrades, complimentary breakfast and late checkout, were important. Nearly half (49 percent) attempt to stick to a budget when traveling.
“Just because people have large budgets does not mean they are frivolous with their money – in most cases, it is the opposite of that. Our clients are prepared to spend large amounts of money on their holidays with us, but they are well traveled, well educated people and definitely demand value for money on what we offer,” said The Tailor’s Siekmann.
Goldman agreed that everyone wants value, no matter how much money they have to spend. “Our clients don’t mind spending hundreds, if not thousands, on a hotel room and tens of thousands on a cruise. If the experiences don’t live up to the promise, we hear about it.”
Low & James clients also want to know that they are getting value for money, said Majsay. “They don’t want to waste money for the sake of just staying in the most expensive suite, for example, if their experience will be the same or better in a lower-cost option.”
Luxury Requires Skilled Advisors
Jayson Westbury, chief Executive of the Australian Federation of Travel Agents, told Skift that luxury travel, “like all segments of the travel industry, is an area which is done best via a specialist travel consultant. Often consumers looking for luxury experiences are time poor and the obvious place to outsource search and book is with a qualified travel agent.”
The luxury travel market promises good returns for specialist agents able to invest in staff training and to commit to high service levels. The agents contacted by Skift all stressed the importance of “the close partnership between luxury travelers and their travel advisors,” as highlighted in the report.
As Low & James’ Majsay summed it up: “If a client feels that they trust us and that we can offer knowledge and insight and great guidance on their trip, that is the value they are happy to pay for.”