|Ken Yokoyama, Hyatt Kyoto|
We recently hosted a roundtable of international hoteliers and luxury travel advisors in conjunction with Signature Travel Network at the network’s annual meeting in Las Vegas in November.
In attendance were Karim Bizid, general manager, Oberoi Dubai, which opened in 2013; Federico Echaiz, managing director of Belmond Maroma Resort & Spa on Mexico’s Riviera Maya; Franck Farneti, general manager, Cap d’Antibes Beach Resort, a member of Relais & Châteaux; Michael Kewley, managing director, The Fairlawns Boutique Hotel & Spa in Johannesburg, South Africa; Thomas Fischer, general manager of the Corinthia Hotel Budapest; Stefan Kuehr, general manager of the Radisson Royal Hotel, Moscow; Tarek Mourad, general manager, Raffles Istanbul, which opened mid-2014; Greg Stanaway, CEO and part owner, Pacific Resort Hotel Group (PRHG), a small hotel group in the Cook Islands whose 27-room Aitutaki property is a member of Signature Travel Network; and Ken Yokoyama, general manager Hyatt Regency Kyoto.
Luxury travel advisors who participated were John Burgess, manager of the leisure division and senior travel specialist for Preferred Travel of Naples in Florida; Marquetta Chambers, luxury travel advisor with Hill Barrett Travel, based outside Seattle and one of Travel Agent magazine’s 30Under30 travel advisors; Deborah Deming, an independent travel consultant with Frosch/Classic Cruise and Travel in Woodland Hills, CA; and Hilton Smith, master leisure travel planner of TravelStore, Los Angeles.
The panel was moderated by Ruthanne Terrero, VP/editorial director of Luxury Travel Advisor.
Ruthanne Terrero: What are luxury customers like, coming out of the Great Recession? How are they spending? Are their demands different?
Marquetta Chambers, Hill Barrett Travel: The top suites and villas are definitely getting booked. Hotels with a great view of the river, or the Eiffel Tower or anything like that, are going quickly. If it’s going to impact their overall experience of a destination they will book it. In terms of the recession, I’m finding our overall booking costs are up 15 percent to 25 percent in terms of overall volume. So our profits have gone up and are right back on track to where they need to be since the recession.
Greg Stanaway, Pacific Resort Hotel Group: People were still traveling during the recession, but they’ve come out of it with a lot more discerning focus. The moneyed traveler really respects how they earned their money, and they want to make sure that they’re getting the best value for it. There’s a much more discerning approach to the way that they’re looking at opportunities.
Franck Farneti, Cap d’Antibes Beach Resort: Customers these days are trying to negotiate. You can just envision them typing on their iPad or iPhone while they’re in bed trying to find a better rate on Booking.com, in order to come back to us or the travel agent to negotiate. It adds a bit of stress, which wasn’t the case 10 years or 15 years ago.
Tarek Mourad, Raffles Istanbul: The marketplace has changed dramatically. The offering for the luxury traveler is more diverse and attractive, which drives hoteliers to provide a true quality, unique experience that the guest is willing to pay for.
John Burgess, Preferred Travel of Naples: To Greg’s point, the high-end client is spending again. But they’re also sophisticated travelers, who are used to amenities and special privileges being included. They’re looking for who is going to give them the most for their money. Most of them are spending at the level that they always were. If they’re convinced that the amenities they’re getting are worth it, the price is not a problem at all.
Free Wi-Fi is a huge thing. I’m also finding more and more requests for wireless printers in hotels.
|The group of luxury hoteliers and travel advisors gathered in Las Vegas during the annual Signature Travel Network conference.|
Karim Bizid, Oberoi Dubai: Dubai has its own charm when it comes to luxury. Dubai somehow managed to maintain its clientele and disposition during the recession. It wasn’t easy, but it was a niche market, which they played on. However, consumer behavior has changed. What used to be luxury has become standard now. In the Middle East, it’s normal to see a big fruit basket, to get complimentary laundry and your TV channels and newspapers from back home. That is not luxury anymore. However, the luxury traveler is looking for the personal touch, which equipment can’t provide. They like to feel safe and to be served efficiently. They don’t like to ask twice for the same thing, and they like to get what they paid for without asking for it. If they are satisfied, they will keep coming back, and keep on spending. If they are not satisfied, they will find another place.
Deborah Deming, Frosch/Classic Cruise and Travel: We see Millennials and those from Generation X looking for instant gratification, which we hadn’t seen before. But that’s also driven by the way we now run our lives, meaning, if I don’t have my iPhone with me at all times, I get nervous about what opportunities I might be missing.
|Thomas Fischer, Corinthia Hotel Budapest.|
Clients no longer want you to say, “Hey, let me get back to my contact at the hotel and see what I can do for you.” They want to know now. And if they’re not getting it now, they’re online searching for it in the middle of the night, because they have access to so much information. That’s a challenge, not only in the luxury market, but in the moderate market as well.
Their expectations of the value add-ons have become standard; they’re not as special. So whether we’re competing with American Express Platinum or any of the other programs, they now they feel they can get a free breakfast or shipboard credit from anyone.
They don’t want to be told an upgrade “might” be available at time of check-in. They expect those upgrades to be part of the booking experience.
So now it’s about trying to provide them with services that exceed their expectations.
Federico Echaiz, Belmond Maroma: The key word here is “shopping.” They are shopping around to see who can give them the best deal. That’s the case at least in Mexico, where we have seen an unbelievable increase in competition. Now they can actually go from one hotel to the other, they also check the Internet. So they are spending, but they’re looking at what they’re going to spend it on.
Stefan Kuehr, Radisson Royal Hotel, Moscow: I support what Deborah mentioned earlier [about] the demands of Generation X, which are different from those of the Baby Boomers. It’s all about connectivity today, about having a Smart TV and other bring-your-own-device solutions so that the guest is fully connected to your in-room facilities. We still have to offer, of course, the best service, and we have to offer luxury offerings, but we need to develop and innovate.
|Marquetta Chambers, Hill Barrett; Tarek Mourad, Raffles Istanbul; Ruthanne Terrero, Luxury Travel Advisor and Greg Stanaway, Pacific Resort, Cook Islands.|
We have to communicate through very different channels with the young generation. We’ll always have the classic concierge, but now we also need to have an e-concierge and an app. In the future we’ll be able to drive additional revenue to various restaurants [using technology]. If I see my Italian restaurant is full, but that I have space in my Chinese restaurant, I can put a 10 percent discount for it on the app. I can drive people to different outlets this way. This is what we are currently looking into.
Of course, we will be always hoteliers, so customer service is very important. I have three employees for each client, and this will not change. But we might be able to move certain things to mobile applications. We’re looking into that, because we still have to achieve a certain bottom line. Technology will help us to do that.
Ruthanne Terrero: Let’s talk about how access to information has changed the luxury traveler.
Michael Kewley, Fairlawns, Johannesburg: In the boutique market, especially in South Africa at the moment, people have the buying power. The exchange rate gives you a lot of bang for your money in that sense. But in the boutique market, people are looking for that bespoke experience. Pay TV and breakfast have been complimentary since the day we opened, 17 years ago. It was expected of us. Luxury travelers in our marketplace have one all-inclusive price. They don’t want to stand at a desk querying about little extra charges for the laundry and minibar. They want value and for a one-stop price. They’re looking for the experience from us as well.
|Deborah Deming, Frosch/Classic Cruise and Travel.|
Ken Yokoyama, Hyatt Regency Kyoto: Travelers are looking for that personalized, customized experience. We try to communicate as much as we can, starting with the booking stage. Our concierge offers several private tours, and communicates them to the guests ahead of time. Our guests used to ask what time a temple opened, now they can find that out themselves online, so they’re asking us if we can arrange for them to speak to a monk or to experience Zen meditation. Luxury travelers are looking for something personalized and very intimate.
Thomas Fischer, Corinthia Hotel Budapest: At the end of the day, it’s all about differentiation. There are two types of travelers going in two different directions. One really wants you to spend time with them. They want a tailor-made and personalized stay and the general manager’s attention. And then there’s exactly the opposite, that don’t want any of that. They just want their smartphone, to come in and go out, without any customer service touch points.
The booking window is getting shorter and shorter, even for the big suites. When I was working in Russia, we’d keep one of our biggest suites vacant, because we could be assured that a walk-in would snap it up that day at a huge price.
Ruthanne Terrero: It must drive you crazy, as far as revenue management goes.
Thomas Fischer, Corinthia Hotel Budapest: Forecasting, I think, for all of us, is a challenge.
Ruthanne Terrero: Millennial travelers between the ages of 18 and 35, in the U.S., are actually a larger age group than the Baby Boomers. Do they have different needs from older travelers? Is their concept of luxury different?
Marquetta Chambers, Hill Barrett Travel: I’m one of them. Luxury to a Millennial can be very different from the traditional traveler. I think Millennials in general would love to see a drop in the level of formality, which varies a lot per destination in terms of cultures and customs.
|Karim Bizid, The Oberoi Dubai and Federico Echaiz, Belmond Maroma.|
In Seattle, we don’t dress up. If we’re wearing high heels and a nice coat, it’s a very special occasion. I don’t want to feel that if I’m going through the lobby in a hotel, I’ve got to put on a whole new evening outfit. If I’ve been out hiking all day, I don’t want to feel awkward crossing over the marble floor in the foyer. It’s just a little bit uncomfortable in some situations.
The Cook Islands, I know, are very casual, rustic, barefoot luxury, so it’s perfect for a lot of travelers. But it’s harder in the city hotels, where you might have a lot of business meetings going on, where suits or jackets or blazers, in some of those venues, would be more required and standard. So I do try to advise guests who are traveling to be on the lookout that they do dress more formally here.
Local experiences at a hotel make a big difference. If you’ve got two hotels next to each other with similar price points, the experience is what’s going to drive their overall decision to choose one over the other.
[People] don’t want to go to a hotel in Japan, for example, and have it just be contemporary in style. [It’s important] that it has Japanese-style artwork, something that places you in the destination, and that it’s not just your standard all-white, too minimalistic style. You can’t go too minimalistic in hopes of pleasing everybody.
Greg Stanaway, Pacific Resort Hotel Group: We’re definitely noticing a marked increase in Millennial travelers as romantic couples, or two girls or guys or a group of three, who are traveling to experience the destination. We’ve talked about how important technology is. But what’s key for the Millennials from our perspective is they want to get out and about and experience. They want to use the gymnasium.
|Michael Kewley, Fairlawns, Johannesburg.|
The other distinct thing they’re looking at from an experiential point of view is the food. They have great palates. They have great choices in their home towns. When they go to a different destination, they want to try to find the cutting edge of that destination’s cuisine.
Hilton Smith, TravelStore: I think as far as hotels go, the basics are still very important — a comfortable bed, a good closet, a room that’s not noisy. Those are still very, very important, as well as the connectivity in the room. Beyond that, yes, food and wine is a big thing with them. Also, activities such as zip-lining in Costa Rica or taking a local tour are popular. But they don’t usually want to be managed every single moment of the day as older people do, so you have to leave time. If you load them up on an FIT with too many activities, they say, “This is too much.” Usually I pick one or two things, or if I pick more, I’ll tell them, “This is just a selection. You can pick and choose.”
Franck Farneti, Cap d’Antibes Beach Resort: Millennials are, to me, open-minded people. Older clients go to the same restaurant because they came here 10, 20, 30 years ago, and they have to go back to this place. The Millennial client is listening to us and accepting our recommendations. They will follow our advice. On top of that, of course, they are our future. We see that more and more, when they are 30 years old, they come back with their babies, which is great for us.
Tarek Mourad, Raffles Istanbul: I totally agree with Franck. It’s great to have them, because we find them very easy to communicate with, they’re very open. When you think about it, we have butlers serving that age group. At first glance, you wouldn’t think that would work, but actually it works perfectly. Butlers communicate on a personal basis with them, and they are very open and they listen well. They are easier, believe it or not, to satisfy.
John Burgess, Preferred Travel of Naples: Millennials are not a big part of my demographic. They are the children or grandchildren of my main clients. What I’ve noticed is they do a lot of their own research. They’re all online. I think they come to us because we were recommended by their family and because they want validation. They’re not well traveled. They can read all this stuff online and try to sift through it all. But at the end of the day they want someone to say, “You’ve made the right decision. I think you’ve made a choice that’s fitting for what you’re telling me you want to do.” That’s important for them.
|Stefan Kuehr, Radisson Royal Hotel, Moscow.|
The other thing that I think is interesting is that they think luxury should be around $400 a night, maybe because their parents have paid for everything. But when they hear that it’s going to be $900 a night, they sort of freak. It’s a generational thing. But you have to explain to them about the differences in currency, the differences in everything around the world.
Karim Bizid, Oberoi Dubai: I believe [Millennials] are the most difficult to deal with, but they are going to be your clientele in the future. [We have learned to] prepare ourselves to change the helicopter tour, the private jet or the yacht booking three times a day for the same person. [We know to] be patient, to smile and to get it done.
Tarek Mourad, Raffles Istanbul: I think it depends on the background, the culture.
Deborah Deming, Frosch/Classic Cruise and Travel: The majority of Millennials we’re seeing have an interesting perspective on how they’ll spend their money. They want an accommodation, like you said, that’s affordable. But then they’ll go and spend a thousand dollars a night for table service at the best club. They feel, “Oh, the hotel’s just where I want to shower and sleep and leave my things.” So that becomes a less important aspect of their experience. That said, that’s not the Millennial who’s been traveling the world with their parents in first class since they were two years old.
I was 30 years old the first time I flew in first class. You’ve got parents who have teenagers who won’t put them in coach. If their kids aren’t up there with them in first class, they don’t want to travel. So you have these kids who come in with extremely high expectations of what service should be, and they’re the ones who are changing everything, because they’ve got that sense of entitlement. That’s so difficult to combat because that’s how they’ve been trained. Then you’ll have the ones who spend thousands of dollars on food and entertainment, but will ask you, “Hey, what’s a good Airbnb?”
Federico Echaiz, Belmond Maroma: Most of our Millennials are coming as honeymooners. I like your comment that they are open minded. They are looking for an authentic experience. They like to try new food and to engage with the staff. They can be in a very rustic environment, but they want to be connected. They are also very concerned about how “green” the hotel is.
Stefan Kuehr, Radisson Royal Hotel, Moscow: The Russian Millennial doesn’t want to drive a Bentley. He will buy a Bentley when he stays in the hotel. For the Russian and the Middle Eastern clients, this generation is very different from European travelers. They have a very different approach toward money spending. This is the big challenge we have. Personalization is everything, and the intelligence we have on their values helps us to cater to their demands.
We just have to make sure we have very well-trained people. We have to hire attitude and we have to make sure that we don’t just train them on the hard factors. It’s all about soft skills. It’s all about how a person approaches another. How you network with somebody. How you communicate.
Michael Kewley, Fairlawns, Johannesburg: People are looking for luxury, but on the other hand not wanting to walk across the marble floors in their sneakers and cargo pants as they’re off to a safari. So that is a tricky balance for us in the sense of being a high-end bespoke boutique hotel. It’s also a very romantic destination. So, couples coming to us are correctly dressed, but they are definitely looking for adventure and technology.
Ken Yokoyama, Hyatt Regency Kyoto: This [Millennial] group is very precise. They are specific about what they require and to what degree. Of course, they vary by culture and by country.
Thomas Fischer, Corinthia Hotel Budapest: Budapest is very much a party town for the young crowd. They come in groups of three or four. We have residences [and] serviced apartments besides the hotel, which are extremely well liked by these guys, because they feel like [they are] in their own apartment.
Apart from that, you actually almost don’t see them, because they’re out all night. They sleep most of the day. The next evening, the same story continues. For us, river cruisers are big business and the average age of that client is 60 plus. So we need to carefully manage that sort of conflict of generations because their requirements, that you described very nicely, are so different. For us it’s an interesting journey every day to deal with both of them.