The luxury travel market is well past the worry of the recession and is increasing at a much faster rate than any year since 2007—that's according to Luxury Travel Advisor's 2018 Advisor Survey, which was announced at its ULTRA Summit.
To open the conference, Ruthanne Terrero, vice president of content and editorial director for Luxury Travel Advisor, discussed the Advisor Survey results, which were used as a guideline for presentations, dialogues and events. Luxury Travel Advisor asked all attending advisors a handful of "state-of-your-business" questions to get a pulse on the industry. The short answer is that business is booming. Here's what we learned.
Spending is back to pre-2007 levels and so is the mentality. People are booking more and more suite-level accommodations everywhere and they are surprised when their first choices are not available. The recession is firmly in the rear-view mirror among many clients. Even when they first began booking luxury accommodations following 2008, some might have been "embarrassed" to discuss their travel; now, however, bragging on social media and to family and friends is almost commonplace; it's creating competition among consumers, which is good news for advisors, who can help them book the most exclusive trips.
As for the advisors in attendance, 39 percent replied that their business grew by 10 percent over 2017. Even more impressive, 19 percent said that their business has increased by 25 or more percent. Looking forward, 35 percent of advisors expect their business to grow by more than 25 percent in the next five years.
"Business is pouring in the door both from past customers, referred individuals and new to (any) agency customers," says one advisor. "And, there are fewer and fewer inquiries from people who are resistant to paying consulting fees."
"We have had the busiest year since opening in 2012 and increased our booking fees," says another advisor. "Sales are way up year over year. We have closed over 90 percent of our quotes into bookings and our luxury business is better than ever, accounting for approximately 70 percent of sales."
The fact that both these advisors were able to either increase their booking fees or see less resistance among clients is important. Among the biggest issues that advisors are currently facing, a lack of time was a common response.
"'Time-challenged' is always our status," one advisor tells us. "Bookings are all extremely complicated, often with five or more suppliers involved. We operate much like financial planners who offer a portfolio of services—and thus our hourly fees."
Your time as an advisor is extremely valuable. Make sure none of it is going to waste by first vetting your clients to make sure they're a proper fit for you but also by charging them fees to be sure they're not wasting your time and are truly valuing your expertise.
Additional challenges that advisors are facing include too much—or, interestingly enough, too little product. The former is an issue in that clients are often overwhelmed by the number of options, while the latter causes issues for travelers looking to explore secondary or off-the-beaten-path destinations. The availability of top accommodations, increasing demand and (again, interesting), attracting new clients are also top concerns.
To end with a few positives: Average trip spend saw a tie between $10,000 to $25,000 and $25,000 to $50,000 as the most common prices, with each receiving 39 percent of the vote. Just over half (52 percent) of advisors reported that spending in 2018 is up 10 to 20 percent over 2017. And while 68 percent of advisors said the average age of their clients in 51-75 years old, 29 reported that the average age is 31 to 50, meaning they're attracting a younger clientele who they can continue to manage for several decades more.