Changes in spending patterns for ultra-high-net-worth travelers might signal a slowdown in luxury revenge travel. However, despite a cautious approach, there's still a considerable appetite for unique experiences, as a younger set go in search of sailing adventures.
It’s not exactly budget travel, but at least one tour operator is seeing a pullback in what high-net-worth households are looking to spend.
They’re less likely to shell out $1 million for a luxury, tailored week spent island hopping in the Mediterranean. And they’re favoring the less chartered waters of Indonesia or Costa Rica at the average rate of $250,000 for a week onboard a private yacht for 12 people.
That’s according to Edita Sgovio, vice president of Yachts and Villas for Kensington Tours, which has access to a 3,000 global charter fleet and is part of the Navigatr Group.
In 2022, she said, million-dollar super-yacht bookings made up 40% of Kensington’s private yacht tours business. In 2023, that dipped to 20%.
“We’ve still had a few bigger bookings, but not as many as last year,” said Sgovio, who suggested the revenge luxury travel trend is slowing. “We see more caution tied to the U.S. Economy. Our ultra-high-net-worth clients are holding their cash. This is always a big purchase, even for them.”
Kensington shared other trends it’s seeing:
- More than half of chartered yacht bookings, at 55%, were new first-time yacht charter clients.
- North Americans and Canadians in the 60+ age group make up most private tour bookings with Kensington.
- The company is also seeing younger customers, with an estimated 15% of bookings now coming from travelers in their 40s.
- Clients include celebrities, investment bankers, hedge fund owners, and a marked increase in young tech billionaires, according to Sgovio, who said they want a “protected, private seven-star experience at sea where they get to control everything.”
Private Charters Booking Pattern Shift
While super-yacht bookings might be down, the company claimed it is still seeing record-breaking sales in 2023 across all other luxury itineraries.
In the first quarter, sales were 90% higher than the same period in 2019 and double what they were in January 2022.
The Mediterranean, the South of France, Italy, and Greece were some of the most booked destinations for 2022. This year, Kensington Tours also sees trends toward Croatia, Indonesia, and Costa Rica.
High-net-worth individuals are familiar with the Mediterranean and the Caribbean, according to Sgovio. She put the shift down to these clients wanting to “venture out and try the next exciting thing and explore different destinations.”
“Costa Rica has never really known to be a yachting destination, but it is one to watch,” said Sgovio.
The destination made up 10% of villa bookings for Kensington Tours in 2023. An average group trip of up to 12 to Costa Rica on a super-yacht for one week with its own certified submersible have been booked at $700,000. A regular yacht without a submersible starts at $100,000.
While flight connectivity across Costa Rica might not be well-suited to Kensington’s premium clientele, itinerary packages can include private flight charters as an optional extra. “Travel around Costa Rica takes forever too. Including a private jet to fly around in or a helicopter is always much easier. So we add that to their package,” Sgovio said.
Unique wildlife experiences are drawing well-established travelers to the destination, suggested Sgovio.
Guests get to swim with a pod of thousands and thousands of dolphins, for example, which Sgovio said requires a degree of logistical preparation. The dolphin pods are pre-scouted via helicopter in the morning, with the location then sent to the yacht. Once there, clients jump into the water with their seabobs, a jet-propelled device that allows them to swim underwater and keep up with the dolphins.
Real Estate for Super-Yachts
Brokering these super-yachts for their clients has become a niche offering for Kensington.
“Owners are known to do world trips, stationing their yacht in various destinations when they fly home for a few months. This has created the opportunity,” said Sgovio, as her team tracks different super-yachts worldwide. This strategy works well for seasonality, too, she added.
A yacht owner would station their yacht in Indonesia, for example, allowing Kensington’s Yachts and Villas team to charter it for their clients, depending on the length of stay required and the availability of the yacht.
“We work directly with the yacht owners. So there’s no middleman. And everybody has a representative, the client side and the owner side. Everybody enters into this legal contract that protects both parties in any event.”
Owners can refuse a client, too, said Sgovio. “It’s still a personal asset for people. Thankfully we have a great clientele, and it’s never been an issue with us, but they are very strict with who they let on board, especially recently with Russian sanctions.”
While the company deals with direct clients, travel advisors account for 65% Kensington Tours bookings per year. For example, a luxury travel advisor based in New York or Texas who has never booked a yacht might not know what to do with a client’s request for this type of experience, explained Sgovio.
“They come to us, and we help them put this package together and work alongside them to curate a perfect itinerary for them.”
Correction: This story has been updated to show Kensington Tours is part of the Navigatr Group, which includes the Travel Edge Group.
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Photo credit: Lionshare Super Yacht. Source: Kensington Tours Supplied