Luxury Travel Advisor conducted its first "Affluent Sentiment Survey" in April to get the pulse of how clients are responding to the new travel landscape; we also delved into how luxury travel advisors are operating following more than two years of a most challenging business environment.
What we heard was all very good news; some travel advisors are turning away business now that the “flood gates have opened” and their affluent clients are willing to spend well beyond past budgets to get what they want. Luxury travel advisors are spending a lot of time educating clients about current pricing conditions (there are no deals, no fire sales as demand is fueling high pricing). Most (60 percent) could use a new assistant or advisor to help them with the influx of business; several said they no longer have time to look for one and are instead putting family to work. Others admitted they are having trouble finding help, while the rest said they are using word of mouth, Craigslist and social networking to find someone to add to their business. Some are looking at local universities for new talent; another told it like it is: “I’m such a control freak, [getting help] is a very hard concept for me to even consider.”
The survey was conducted from April 7 through April 22; of the 288 responses we received, 102 were travel agency owners or managers, 165 were advisor independent contractors and 22 were advisor employees. All of the respondents sell luxury travel; 85 percent of respondents said more than 50 percent of their bookings comprise luxury travel.
Optimism did indeed reign in Luxury Travel Advisor’s "Affluent Sentiment Report;" 63 percent said their sales for 2022 will be on par with 2019’s, i.e., prior to the pandemic. In our next survey we’ll get more specific with this question as several advisors wrote to us saying they expect 2022 to supersede 2019, which was a banner year for luxury travel.
With that knowledge in hand, we weren’t surprised to hear that luxury travel advisors are more optimistic about the industry now than they were at the close of 2021; 93.4 percent fall into this category. (Just 19 are not more optimistic.)
We asked why they are more upbeat: One advisor said their “sales are already double what they were in 2019, and the year’s not half over!” Other responses included:
- “Clients are booking longer, more luxury destinations than ever before.”
- “People want experiences and bucket list fulfillment.”
- “My clients are clamoring to go places, as upscale as possible, with plenty of hand holding and services.”
- “People have hit the point where incidents, such as new variants and war in Eastern Europe will not affect their long-term plans to travel. I think you’re seeing increased risk tolerance combined with increased budgets. Yes!”
- “Business is booming and although it doesn’t look like COVID is going anywhere, it seems as though we are learning to live with it.”
- “I am feeling beyond hopeful, and have recently seen a surge in travel bookings, people have longed for the deep connection with their family and friends that was cut off for two years.”
Others cited that within Europe, many of the testing restrictions have been lifted and that people are engaging in “revenge travel” after being cooped up for more than two years.
“The flood gates have opened!” said one advisor. “It’s as if clients are looking at travel through a new lens with a deeper appreciation.”
Asked whether the invasion of Ukraine has affected clients’ intent to travel, 39 percent said, “yes,” and 61 percent said, “no.” Several noted that trips to Russia have been canceled, as have those to the Baltic region. Eastern Europe in general is seeing some cancellations; one advisor had a multi-gen group cancel its Europe vacation and switch to Hawaii instead.
“No one is canceling spring and summer 2022 trips they have already invested in but no one seems ready to make new commitments,” said one advisor. “I am not losing trips for 2020 but people are definitely saying that they are waiting to see what happens before making Q4 or 2023 or 2024 plans.”
This last statement explains much of what we’re hearing for bookings to Europe in general; there’s huge demand for Europe, but specifically for the beginning of the summer as some travelers are reluctant to plan further ahead than that for the region.
“My luxury clients have been more concerned about being healthy and safe,” said an advisor. “Tahiti and Fiji are on an upswing as are the river cruises here in the United States and the smaller luxury cruises.”
Another dynamic in play are the wild fluctuations in the stock market and the ever-increasing rate of inflation. Eighty-three percent of the advisors surveyed said these two factors are not causing a slowdown in spending from their luxury clients. We have found this to be true with past downturns in that the wealthy tend to not be disturbed by the travails that affect the typical, more day-to-day consumer.
As a matter of fact, luxury travel advisors (68 percent) said their clients are upgrading their travel to new levels, spending more, using private air and staying longer. As one advisor cited above, clients are seeking more enriching experiences with loved ones they either haven’t seen for a long time or with those they’ve spent more quality time with over the past two years. Many are taking their entire families along for vacation and so are traveling in larger groups. “Clients are currently increasing their multi-gen travel to regain their time with family due to the pandemic. They are booking more villas, wanting private transportation with chauffeurs, and booking private yachts,” said an advisor.
“No one is waiting for tomorrow anymore,” said another. “People have lost so much time with loved ones that they are not putting anything off. They want to experience life now.”
“People are going for that bucket list trip that has always been on their mind,” said another advisor. “There is a bit of pressure to travel in the sense that we don’t know when something like this will happen again that keeps us in our homes.”
Private air has become “huge,” as has the demand for private guides. Clients are upgrading to premium for First/Business class and willing to pay more for private experiences, as well as helicopter transfers to save time and arrive in style.
For cruises, many are focusing on the more upscale shore excursions and investing additional dollars in overnight stays for pre- and post-cruise vacations.
Some are going the private route so they can practice social distancing to protect their family’s health from COVID, said several advisors. That often means private villas, which can be hard to come by these days as families ranging from grandparents to grandchildren are willing to spend on lush facilities that allow them to have a secure environment from other guests.
At the end of it all, it has indeed become “the roaring 20s” as some predicted a year ago. “Clients are bringing everybody to their desired destinations,” said an advisor. “They are having so much fun loving on one another and getting where they want to be. Many are adding on chefs, drivers and private entertainment.”
Another reason why clients are spending more? “Everything costs more now,” said an advisor. This brings into play the fact that many clients have expected there to be fire sales from the travel industry, that they are desperate to get customers back. The fact is, demand is strong and no one is giving anything away. “There is a lack of knowledge about the supply/demand situation right now,” said an advisor. “I have to manage expectations from the get-go about prices, inventory, staffing, etc.”
“They are naive about the difficult situation for traveler suppliers around the world,” said another.
Indeed, it’s no secret that rates for everything have gone up. Hotels and tour operators have staff shortages and so are likely paying good employees more (we hope).Airfare has gone up as well, in some cases, astronomically.
That hasn’t slowed too many people down, apparently. “As obnoxious as prices are and as poor as service is, people are still booking and returning,” said one advisor. “Travel has become like a drug that you must take, with no rationale behind taking it.”
Thinking beyond the norm, we asked advisors if their clients have expressed interest in space travel. Just five percent said, “yes,” however, 29 percent expect space travel to be a new revenue stream for them.
What has surprised travel advisors the most about their clients? “My phone is ringing off the hook!” said an advisor. “I’m not planning just one trip for them, they are already planning for the next and they haven’t even left on their first one yet! I have had to tell them to slow down a bit.”
“We are being harassed!” joked another advisor. “Credit cards are being thrown at us before we even book anything!”
The value of the luxury travel advisor has been discovered by consumers and word has spread about the benefits of working with an expert. Seventy-six of those surveyed said that they are getting more business than in the past from consumers who have never used a travel advisor. The best part is that clients all around are not blinking at trip planning fees advisors have put in place. “My luxury long-time clients just let me do my thing for them, no questions asked,” said one happy respondent.
Another said that their clients have become overly dependent on them. “I’m surprised at how many of them expect me to tell them every single thing they need to know about testing, how to get a test, when to test, what forms they need to fill out, what they need to do to enter a country, whether they need a mask, what kind of mask do they need…there is so much hand holding and they can’t figure out anything on their own. I can’t wait until this stuff is no longer part of my job.”
As always, we asked luxury travel advisors what keeps them going; what keeps them in this industry we all love so well?
“Travel is back!” said one advisor. “Clients need help navigating the constant changes. I do what I love so every time I invest in what I do there is always a positive return.”
“I have so much passion for this industry and I am beyond grateful I get to be part of such an incredible boom in travel,” said another. “I believe people have now learned to not take travel for granted and will be more inspired to travel, and for longer amounts of time.”
Our Cover Advisors are Also Optimistic
We surveyed a separate subset for Luxury Travel Advisor’s "Affluent Sentiment Report;" those advisors who have appeared on the cover of Luxury Travel Advisor since its inception in 2005.
Of the 30 responses we received, 28 are travel agency owner/managers and two are independent contractors. This group, which forms some of the most powerful luxury travel agencies in the country, is faring even better than our larger pool of respondents: 77 percent said 2022 sales will surpass those of 2019 and 93 percent are similarly more optimistic about the future of luxury travel than they were at the end of 2021. Several said 2022 numbers have already surpassed those of 2019.
“We continue to see growth in all sectors. While there are challenges and new considerations, all is moving in a positive direction,” said one respondent. Another cited all the new luxury product coming online in the next few years as a sure sign of the luxury travel industry’s health. And the new option for many to work remotely has given people more freedom to travel, even when they’re on the job.
The most telling dynamic for this group? One respondent cited the huge budgets clients now have for travel: “$25,000 [to] $40,000 seems to be the new $10,000 to $15,000 trip,” they said. Another revealed that clients are booking three to five future trips at once. For cruises, clients are spending more on suites and investing in longer cruises.
The influx of business is overwhelming, thanks to pent-up demand and one respondent said that once the United States does away with its testing requirement to get back into the country, that demand for travel will be even greater. One cover advisor reported that close-in travel is very big right now. “Europe in two to three weeks is becoming a frequent request!”
The clientele of this group is even less affected by the stock market and inflation; 87 percent said these dynamics were not causing a slow-down in spending. Their clients, however, were more affected by the invasion of Ukraine, with 53 percent noting the war was having an impact. However, several said the impact was “minimal,” with clients showing concern and changing Baltic or Eastern European trips to other destinations. “Like any geo/political issues, so many Americans do not consider the location of the conflict related to their destination,” said one respondent. “These are typically your nervous travelers who are always concerned with whatever the news of the day is.”
A strong 90 percent of our cover advisors said that their clients are upgrading their levels of luxury, with more private planes, boats, penthouses and villas, as well as a higher suite spend for both business and personal travel.
“People are richer!” exclaimed one respondent. “Private air is off the charts,” said another.
Another respondent thoughtfully noted that the requests for larger rooms are also fueled by the sheer fact that people want more space, period. “After being in lockdown for so long, close quarters are not of interest for most travelers,” they said. “They are also more focused on a hyper family/traveler-centric itinerary that is not impeded by the masses, so private villas, yachts and flights are still in high demand.”
Not surprisingly, this group is very jazzed about the future of luxury travel. “For those agencies that survived, my gut says good years are ahead,” said one respondent. “We are being more selective about which clients we work with; we can afford to now that demand is high.”
“I truly believe we sit in an unprecedented time that allows us to rebuild better,” said an agency owner. “Coming out of a crisis of this nature is a once-in-a-lifetime opportunity and we are continuing to see ways in which those challenges provide clarity on what needs to change to make the industry — and our world — a better place.”