One out of four affluent travelers used the services of a live travel agent in the past 12 months. And that number is expected to grow to about 3 out of 10 over the coming years. That’s the scoop from Peter Yesawich, vice chairman of MMGY Global, who presented findings from the MMGY 2014 Portrait of Affluent Travelers at Luxury Travel Exchange International in Las Vegas this week.
“The encouraging news for your is that the economy is pretty robust and it’s growing. And as a consumers’ income goes up, so does the probability of their having a stockbroker, multiple laptops and a travel agent,” he told the audience of travel advisors.
Presenting a snapshot inside these affluent travelers’ minds, Yesawich noted the catch phrase coined during the “Great Recession” called “the new frugal,” which characterizes how affluent people are changing their purchasing behaviors.
The phrase doesn’t indicate that the affluent are looking for the cheapest deals, rather it’s more in line with, “If I like The Four Seasons, I'm going to stay at The Four Seasons, I just don't want to overpay when I stay at the Four Seasons,” he explained. “There's nothing that irritates people more than discovering they paid more than somebody else. You don't want to be hanging around the captain's welcome party on a cruise ship when the conversation goes to, ‘How much you pay for your cruise?’"
Yesawich also put an end to the concept that just people are affluent means that they don’t mind spending a lot of money, when they actually became affluent by not wasting money.
Multi-generational travel will continue to grow, he added. In fact, 28 percent of those surveyed are grandparents and more than 40 percent of them took at least one vacation with their grandchildren, sometimes with parents invited along as well.
“We discovered in our work is that one of the primary motivations for affluent grandparents is to provide a vacation experience with kids and their grandkids that they feel they otherwise would not be able to afford. They're the ones funding the cost of the trip,” said Yesawich.
Therein lies opportunity for luxury travel advisors as the number of affluent grandparents will continue to grow steadily as America continues to age and as wealth continues to get passed along to the next generation.
“This is going nowhere but up,” said Yesawich. “As parents pass on, you’ll inherit what it is they've acquired in their lives. The wealth transformation that will occur in this country over the next 15 to 20 years is unprecedented.”
Growing alongside this trend is celebration travel to commemorate life events, which can range from a wedding to a child’s First Communion, to recovering from a serious illness to a divorce. MMGY Global asked survey participants to rank a list of such options and determined that milestone anniversaries and milestone birthdays came out on top.
“What's a milestone? Anything that is divisible by five, so that’s a 20th anniversary or a 50th birthday,” said Yesawich.
His takeaway for the audience?
“If you can extract from your clients their birth date and their anniversary date, I'll guarantee that's money in the bank. Think of the power of telling them that you noticed their 20th anniversary is coming up and you have some wonderful cruises to suggest to celebrate.”
In his presentation, Yesawich also alerted advisors that Asia as a destination will be very popular four to five years from now.
The reasoning, he explained, is that affluent consumers are seeking undiscovered destinations.
“They've been to Europe multiple times; they've been to all the popular islands in the Caribbean. Maybe they have limited interest in going to South America, for several reasons, and to Central America. Asia is clearly the future. So I encourage you to think about that.”
MMGY Global’s Affluent study measured respondent’s interest in 30 different individual destinations. For the 24th year in a row, the neighbor islands of Hawaii ranked number one in popularity. San Francisco; Washington, DC and New York City also ranked high in interest, as did the Big Easy.
“There’s a kind of a funkiness about New Orleans that a lot of people who are affluent like. It particularly has to do with their palettes,” he said with a laugh. Culinary and wine opportunities are very key for this crowd, he said, noting that Napa and Sonoma also ranked high.