“Today's high-income traveler is annoyingly young.” That’s Henry Harteveldt, founder of Atmosphere Research Group, who presented an overview of the market at a “Thought Leadership” breakfast during Virtuoso Travel Week in Las Vegas. The breakfast was sponsored by Sofitel.
“In the United States, more than half of the people earning $250,000 a year are under the age of 40,” said Harteveldt, who uses that annual $250,000 in household income threshold as his benchmark for “high income.” Overall, high-income households comprise 1.5 percent of the U.S. market, and they will spend $31.5 billion this year, he said.
This under-40 high-income consumer grew up traveling. “It’s part of their DNA,” said Harteveldt. “Travel isn't something they like to do. It is something they love to do.”
The good news is they have the income to indulge their passion, so they will be calling you regularly for advice, he told the audience of travel advisors.
What’s vital to understand is that this large and growing audience is also a changing audience. It’s incredibly well educated and commercially focused. At the same time, members of this group realize they are fortunate to have grown up the way they did, and so they’re incredibly social minded.
“It's a world where we have to adjust, not just to how we form relationships with them, but in terms of what we recommend and why we recommend what we do for these folks,” said Harteveldt.
And of course, they are very high-tech and mobile. One in five have abandoned their desktop and laptop computers and are a “mobile-only” audience.
“They’re using tablets and smartphones and they are the early adopters of the Apple Watch,” said Harteveldt. “You have to understand, if you want to talk to them or communicate with them, it's going to be in different ways. And this mobile world they live in means that they will always be accessible to you, and they will expect you to be accessible to them.”
“This is a group that understands and appreciates what you do.” - Henry Harteveldt, founder of Atmosphere Research Group
When they travel, “authenticity is critical,” said Harteveldt, who said his company has been looking at this trend for more than seven years. “Even though they want to stay in comfort and eat well, they want to know where the locals go and where they shop. Where do the real people go?”
That might mean a first trip to Paris may include the Eiffel Tower but will need to go way beyond it. “If you don't tell them about that great little boutique in le Marais, or that hot little restaurant in the 14th arrondissement, then their trip to Paris will not be a success. They want to see how to do things in a very different way than their parents or grandparents did. They want to bike ride and go on walking tours. They want to understand architecture and history through a different lens.”
How They Relate to Brands
How do they look at brands? “Anyone who tells you that Millennials are not willing to be brand loyal is wrong,” cautioned Harteveldt. “They're not brand loyal because they haven't found brands that it makes sense to form relationships with.”
“They look at brands beyond the logo, beyond the location, beyond the rate. They look at these brands for what they stand for and what their corporate social responsibility is,” said Harteveldt.
Moreover, high-income Millennials tend to be hotel geeks. “The hotel experience, the design, the service and dining are all critically important to them. They will grill you about who designed the hotel? When was it renovated? What kind of mattresses are there? What kind of Internet service is there? What's the speed of the Wi-Fi? You will pull your hair out. But all this is important to them because they have grown up looking at these details. They understand that little details can make a big difference.”
Likely to Use an Advisor
Another plus about this group is that they’re willing to pay for service, comfort and efficiency.
“It's very important for you to understand that they're not paying for things that scream ‘snobbery’, but they will pay for things that say, ‘This will help you have a better journey. You will sleep better. You will feel better. Your wants will be looked after. Your needs will be cared for.’"
Being among the first of their friends to discover the hot new place is also vital to this group. “It's all about being the first to be able to brag, ‘We were the first to go here. We were the first to do this.’”
As a result, the good news for travel advisors, he said, is that they’ll need your expertise and perspective beyond what they're reading online or getting from magazines.
“They’re also open to suggestion,” said Harteveldt, noting that more than a quarter of this group starts thinking about taking a vacation without a destination in mind, as opposed to 18 percent of all travelers. And while of course they’re likely to research the destinations they’re interested in, they’ll want the guidance of a travel advisor to ensure they’re making the right decision.
What You Should Do
Takeaways for travel advisors?
“Stay on top of all the destination information you can, as well as the market trends, the hotels and everything that's going on out there. Make sure you're storing information on where they have traveled before. What did they like? What didn't they like? What are their hobbies and interests, so that you can recommend places to them based on that.”
Ask this younger, high-income earner where their friends are going. “They’ll gladly tell you all this,” he said.
And while this group is as likely as any other traveler to book a simple trip online, say to San Francisco or Las Vegas, they are 2.3 times more likely to work with an offline, commercial travel agency than the typical U.S. online traveler.
“More than 26 percent will want to work with a travel advisor,” said Harteveldt.
“This is a group that understands and appreciates what you do. They will pay for your advice, your counsel, and your expertise. They want to have a relationship with you because you can help them enjoy what matters to them. This isn't just a transaction.”