After just two days at Virtuoso’s annual TravelMart in Las Vegas, it hit me: the recession is over. No, I wasn’t basing this on what economists had already alluded to; I was basing it on what luxury travel advisors were reporting—the surge in business over the past few months. There’s pent-up demand for travel, and clients are finally committing to spending money.
What else did I hear at The Bellagio? Luxury cruise bookings are increasing, along with prices for 2010. Looks like the fire sale is ending for many of the luxury suppliers out there.
These are signs that the economy is improving, but I’m not implying that we’ll be returning to the glory days any time soon. It’ll be flat, but that’s better than the recent freefall. We’ll take it!
Andrew Sacks, president of AgencySacks, noted that consumers would continue to look for deals. His group recently released a report called The Affluence Collaborative, which surveyed U.S. households with an income of $250,000 a year or more. The mindset of this group, he said, is that 63 percent of them are optimistic about their future, while 70 percent don’t even consider themselves wealthy anymore. Moreover, a whopping 75 percent of them have lost a quarter of their net worth during the downturn. Worsening the blow is the fact that 92 percent were self-made and passionately close to their money.
While Virtuoso was an amazing place to feel the pulse of the luxury travel environment, I also got a glimpse of what’s going on out there during a roundtable discussion we recently hosted, which included an exclusive group of executives from New York-based European tourism offices, as well as luxury travel advisors and tour operators. The advisors said their ultra-affluent customers were still so keen on getting deals that they were not embarrassed to ask for more and more of them. One travel advisor cited a very wealthy client interested in booking a stay at a luxury hotel. To seal the deal, the hotel threw in a number of freebies, meals, transfers, upgrades—you name it. Excited, the advisor presented the alluring offer to her client. Guess what? The client rejected it and instead went on to request that the hotel just give them the money that all of the value-adds were worth. You can’t make this stuff up!
Let’s look at the bright side: Although the free-falling economy had hit rock-bottom, things are getting better. (Okay, maybe your affluent clients are still difficult; after all, you can’t have it all.) But, face it—it’s time to prepare for the post-recession era.