Prep Time for the Post-Recession Era

 

Jacques Pepin
Jacques Pepin is opening a restaurant on Oceania’s new ship, Marina, which will launch late next year. I’m pictured here with the great chef at a New York press event, during which the new bistro, to be named “Jacques,” was announced.

After just two days at Virtuoso’s annual TravelMart in Las Vegas, it hit me: The recession is over. I wasn’t basing this on what economists had already alluded to; rather I was inferring it from what luxury travel advisors were reporting—a healthy surge in business over the past few months. There’s pent-up demand for travel, and clients are finally committing to spending money. Anecdotally, Europe is strong and so is luxury cruising. Don’t assume the top suites on your clients’ favorite ships will still be available for 2010 if you don’t book soon, since it looks as if the fire sale is ending for many of the luxury suppliers out there.

While these are excellent signs that the economy is improving, I’m not implying that we’ll be returning to the glory days any time soon. Overall, most of you will likely see a continuing flat line for business through 2010 as consumers deal with the continuing unemployment crisis and cope with the new reality that their retirement funds have decreased substantially in value.

Along those lines, Andrew Sacks, president of AgencySacks, noted in his presentation at Travel-Mart that even though economically the climate might be getting better, wealthy consumers will 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, so they’re hurting. “If the affluent have less, they want to pay less,” said Sacks.

The affluent are also an influential group, he said. While 22 percent reported that they read blogs, another 9 percent are posting on blogs or message boards. This means they want their opinions to be out there for all to see. I suspect this group will become even more engaged in social networking, giving all the more credence to the fact that the consumer is king these days.

I got another sense of the affluent traveler’s pulse during a roundtable discussion our Travel Group recently hosted, which drew together executives from Europe’s tourism offices, as well as luxury travel advisors and tour operators.

During the discussion, the travel advisors said that their affluent clients are unabashedly demanding more and more value-adds from suppliers. One consultant cited the case of 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. The advisor presented the very alluring offer to her client who casually rejected it and suggested 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; things are getting better. Maybe your affluent clients are still difficult, but you can’t have it all.

But, face it—it’s time to prepare for the post- recession era. I love new beginnings.