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What is luxury? It’s a question that, in 2019, sounds passé, and certainly one pondered by Skift before.
That’s why at the International Luxury Travel Market (ITLM) at Cannes this week — the industry’s largest trade show for luxury travel — it started to feel like a new question was needed: What isn’t luxury?
Indeed, words like “luxury,” “lifestyle,” and “sustainability” flow around Cannes as freely as complimentary flutes of Veuve Clicquot. But as the likes of ILTM get larger — and these words and concepts infiltrate more sectors and price points of the travel industry — it can start to feel like the aggressive overuse of these terms is a red flag of sorts. If a company is saying these things (shouting them, even) should consumers be sure it’s actually doing them?
Luxury Means Different Things to Different Folks
The truth is, beyond loyalty hounds or travel geeks, most consumers do not have an intimate awareness of how a luxury brand fits into a larger hotel group’s portfolio. (Even though conversations at gatherings like ILTM often seem to assume they do.) But consumers do know luxury when they see or experience it — the challenge for travel companies is that the definition is going to vary massively among markets and individuals.
As Francois Delahaye, chief operating officer of the Dorchester Collection told Skift, while the likes of the Dorchester, Aman Resorts, and the Four Seasons tend to not place the word luxury as a prominent part of their luxury brand identities, brands like Marriott, IHG, and Hilton increasingly do. The latter approach may play well in China, he noted, where consumers want luxury to be broadcast more explicitly. But elsewhere in the world, a more subtle sell is appreciated. Translation? True luxury doesn’t yell, it whispers.
Then there’s what constitutes a “luxury destination.” Tourism boards and destination marketers seemed slightly less numerous at ILTM than hotel companies, but the ones that were there were naturally trying to position themselves as a place for a discerning traveler.
Visit California, for example, told Skift its most important emerging market is the Middle East, which it is building a marketing strategy around with the help of airline partnerships. Going after this market raises an interesting challenge: California’s distinct brand of “laidback luxury” — heavy on wellness and devoid of silver service dining and very often proper footwear — is quite different from the more ostentatious approach to luxury that the Middle Eastern traveler is accustomed to. Whether the Middle Eastern traveler sees a trip to California as a distinct kind of luxury, or just a great place to take a family and experience American culture, is hard to prove.
Similarly, Visit Rwanda, a visible sponsor of the conference, told Skift that it’s “low volume, high value” approach to tourism is what sets it apart from other African destinations offering sought after wildlife experiences, like gorilla trekking. Whether that constitutes luxury or just sane destination management practices in a crucial habitat is also up for debate.
Gen Z Is Coming For Your Sustainability Reports
As is the case with virtually any modern travel conference, sustainability was also a key topic of conversation in Cannes— often said in the same breath as the word luxury.
It’s true that many players in the travel industry, including those at Cannes, seem to be making a good faith effort to move towards sustainability. But it’s also true that, down the line, the scale of the changes necessary is likely to get larger, and will necessarily affect company’s bottom lines. The theme of ILTM this year, #consciousluxury, seemed to suggest the industry can still have it all.
This raises a question: Can you delight the whims of an ultra high net worth traveler while also being truly sustainable? If your definition of sustainability goes beyond nixing plastic straws and offering a vegan restaurant, the answer is probably not.
And maybe that’s okay — at least for now. What happens, though, when Gen Z fully matures into its purchasing power? As Dr. Kjell A. Nordström, the thought-provoking keynote speaker at the opening forum outlined, the “four spirits” of carbon dioxide, capitalist efficiency, denser urbanization, and digitization are out of the proverbial bottle. Everything that happens in the travel industry, and indeed the world, Nordström argued, will be shaped by those four factors moving forward. And remember, Gen Z-ers know nothing different than a world where they worry about the future inhabitability of the earth they were born on. (See: climate strikes led by students, flight-shaming, and the subtle anger embedded in the OK Boomer meme.) That’s bound the shape the kind of consumer they become.
So what does that mean for the demands of the forthcoming Gen Z luxury consumer? Probably that the modern-day optics of sustainability in the travel industry — things like reusing towels, plant-based menu items, straws — won’t be enough. They will have more existential questions: What’s your land use policy for new developments? Can you explain your labour supply chain practices? Are you carbon neutral without buying offsets? Answering these harder questions honestly will become harder to do while maintaining the current definition of luxury.
Travel companies are officially on notice, and some see the shift as already happening. Tom Rowntree, vice president of global luxury brands for IHG told Skift that he’s already noticed the way that Gen-Z is influencing the travel decisions of their parents — even before they have a steady paycheck to spend. If this woke generation continues to wake up their parents, the shift might happen sooner rather than later.
To be sure, there is plenty of innovative design, concepts, and experiences to be seen at ILTM, and some travel industry folk are no doubt are making meaningful strides to improve the industry they are a part of. But it can sometimes feel like the over-reliance on jargon or loose concepts to define the agenda distracts the industry from the sheer scale of the challenge that awaits.
There is likely to be a day when ultra luxury and sustainability won’t sit together so comfortably together at the same conference. It’s better the industry thinks of that future now.