In our most recent Luxury Travel Advisor Affluent Sentiment Survey we garnered intel from 151 advisors whose primary business model is selling luxury travel. Our parameter? That 50 percent of their annual revenue is derived from luxury travel sales. The survey was conducted in April 2023.
Respondents were fairly divided between agency owners and independent contractors.
What we loved about this elite group of advisors: 75 percent said their 2023 revenue will surpass 2022’s; 36 percent of them will see a 15 to 30 percent increase and 30 percent will enjoy an increase in revenue between 30 and 50 percent.
Hiring is Challenge: Despite that increase in business, just a small number of advisors have made new hires, largely because it’s tough to find good people. Word-of-mouth referrals, LinkedIn and Indeed.com were some successful sources; one agency owner is simply hiring back her past advisors while another said that her formal training program is helping her to add new talent to her business. While it’s always tempting to hire from a competitor, that could be challenging in this environment because 91 percent of our advisors said they are happy with their host agencies. Another piece of good news: 73 percent are pleased with the support they are getting from suppliers.
Greatest Indulgences: Luxury clients are spending more in 2023 but what are they treating themselves to specifically? In our survey, 45 percent of advisors said it’s the hotel. Thirty three percent are going for private car and drivers and 22 percent are upgrading their air travel.
Local Experts Needed: One challenge this year for many advisors is that their tried-and-true DMCs (destination management companies) are too swamped to take their business, or they are limiting services to those who commit to a minimum stay or price point. That challenge was hammered home when we asked advisors in the survey how influential the DMC is in terms of itinerary choices; a solid 46 percent said, “very influential” while 42 percent said “somewhat.” A small 11 percent said DMCs do not influence their itinerary choices at all.
What Lies Ahead? With the demand for more “live like a local” experiences from clients and the need to deliver very specific touches of luxury on itineraries, advisors are going to have to seek out new sources for itinerary building if the demand for DMCs remains at such a high level.
“There is more interest in personalized trips that are unique to the client,” said one respondent.
“There is a growing shift toward authenticity,” said another.
Country Hopping: That need for localized destination information will be even stronger as 63 percent of our respondents said their clients are now taking multi-country trips vs. 37 percent who are staying in a single country while traveling.
Business Is Mighty Strong: As always, we asked advisors in our surveys what keeps them jazzed about the industry. Not surprisingly, most are quite happy with the influx of business. “Everything is more: more trips, more dollars spent, more cities within a trip and more time with more family,” one advisor aptly put it.
“We are seeing stronger interest in luxury from all age groups,” said another.
“It’s completely off the charts!” said another. “In three-plus decades it has never been so busy with very little pushback when prices are quoted. Hotel prices continue to rise and clients continue to pay them. It’s amazing!”
Another was a bit more cautious: “It’s a very, very good market now unless suppliers keep increasing rates,” they said. “Rates are at a breaking point on air, hotels and cruises. Cruise fares are starting to soften. Hotel and air rates are stifling travel across the board, especially with air as a percentage of the total trip cost.”
Now, to see what’s hot and what’s not, take a look at our destination barometer on the following page.
Luxury Travel Advisor’s Destination Sentiment Index
In April 2023, we surveyed luxury travel advisors to gauge their clients’ interest in destinations for future travel. Europe shows no sign of slowing down and Asia and Africa are getting plenty of attention now that they are fully open. Domestic luxury travel is holding its own although indicators show it’s plateauing post-COVID.
Not surprisingly, interest in Europe is nearly off the charts. Eighty-five percent of advisors report that interest in travel to Europe is higher now than in the beginning of the year. Thirteen percent report that its the same, while less than 2 percent said interest in European travel is lower now than previous.
It's also good to see that interest in Asia is finally rebounding post-COVID. Four in 10 advisors (40.52 percent) say their clients are more interested in the destination now, compared to our previous survey. Exactly one-third say that interest is the same and just over one-quarter (26.14 percent) report that interest is lower. Along those same lines, more than four in 10 (43.87 percent) advisors say their clients have more interest in travel to Africa now than at the beginning of the year. A similar 41.29 percent felt the same, while just 14.84 percent reported less interest now than in January.
When asked about Mexico and the Caribbean, one in five (21.43 percent) said it is higher. Just over one-quarter (27.27 percent) said interest is lower, while over half (51.3 percent) said it is the same. And, making things easy enough, domestic travel registered the exact same responses as Mexico and the Caribbean.