THE NEW LUXURY

Virtuoso Travel Week 2018 press conference outlines key trends for elite travellers.

This year’s Virtuoso Travel Week press conference was yet again the trend-setter for the luxury travel industry.

The elite of the world’s travel media attended the event on Monday August 13th at the Bellagio hotel in Las Vegas, exploring the “new luxury”, with information sessions and a roundtable with some of Virtuoso’s top advisors.

Misty Belles, Managing Director, Global Public Relations, Virtuoso, was first to address the media, explaining that while luxury has a different meaning to everyone, and is very personal, there are some changes going on in the luxury travel space, as what people want is changing.

THE NUMBERS

Misty explained that with 1,000 agency locations in 50 countries, the number of Virtuoso advisors has grown organically by 126% over the past five years, while the number of high net worth clients has grown 156%, leading to US$23.7 bn in sales last year. That’s 12% y/y growth over 2016.  The average age of a Virtuoso client is 62, but almost one third of the clients are aged under 54. They spend US$128,000 per annum on travel, with, on average, 8.2 trips per year. Average air ticket spend is US$5,650 per flight, and average daily spend is US$1,735. Virtuoso clients spend, on average, three times more than an average client on hotels and tours, and four times more on cruises. With 90% repeat rate, it is evident that the building of trust and relationships with advisors is a key to the equation.

Misty.jpg

Misty Belles, Managing Director, Global Public Relations, Virtuoso

Accountability is an increasingly important factor for customers. A recent YouGov survey of travellers with and without advisors showed that those with travel advisors are much more “sustainability oriented”. 87% of those who were surveyed said they liked brands that are committed to doing what is right, while 56% strongly agreed. 82% agreed that they wanted to connect with brands that have a lasting positive impact on the world, and 72% agreed that the ethics behind a luxury product or brand was a key determinant in their decision to buy.

“Getting the best” is somewhat addictive it seems, as 86% of those surveyed said they are willing to pay full price if it means getting the best in service, and 73% agreed that once one has experienced true luxury, it is hard to scale back. 61% of those surveyed said they expected to spend more on luxury this year, and even more – 71% – said they expected to spend more on luxury travel.

Given the data, the future looks very bright for Virtuoso members, as expected growth this year is 15%.

History, culture and heritage are also essential elements. 87% of those questioned said they like brands that have history and heritage, while 65% say that immersing oneself in the local culture is extremely or very important when on a leisure trip.

In the end, explained Misty, it all boils down to one thing. The purpose of each and every Virtuoso member is that of “enriching lives through human connection”.

So how are luxury travel sales going? Looking at 2018 versus 2017, cruise sales are up 13%, tours +10%, on-sites (local TOs) +11% and hotels +29%. Advanced bookings for 2019 show another hike of 15% for cruises, with tours up 9% and on-sites +14%. Hotel data for 2019 was not available.

TOP DESTINATIONS FOR Q3 AND HOLIDAY TRAVEL

This year’s top destinations for Virtuoso travellers have changed somewhat from last year. For US travellers, Italy is still #1, followed by France, South Africa, Israel and Germany. The number one destination for UK travellers is the USA, followed by Maldives, UAE, Mauritius and South Africa. For Australians, the USA is also the prime destination, followed by Canada and Italy tying for second, then Japan, France and New Zealand.

Key trends are for multi-generational trips, active/adventure travel, river cruising, food and wine travel and celebration travel.

Favourite destinations for families include Iceland, Galapagos Islands, Cuba, Antarctica, Botswana and Mongolia.

The influence of Gen Z in the decision-making process is growing, in what’s termed the “iGeneration” influence. They seek active experiences, are highly involved in planning trips, influence others’ travel choices by word of mouth, social media and reviews, seek unusual destinations and look for “visual” destinations and experiences for social media.

The New Luxury: A Panel Discussion

Terrie Hansen, SVP – Marketing for Virtuoso hosted a panel of four experts from the USA, Canada, the UK and Australia, giving their thoughts and opinions on trends and … what just is the “new luxury”.

To be more precise, they were Josh Alexander from Protravel International in NYC; Wendy Davis of Zebrano Travel, Toronto, Canada; Anthony Goldman, Goldman Travel Corp, Bondi Junction, Australia, and Jenny Graham, Quintessentially Travel, London, England.

PC Panel.jpgSo just what is the “new luxury”? For Josh Alexander, it’s “unchartered, undiscovered”. Wendy Davis believes it’s “choice, creativity (coming up with unique ideas and experiences), and simple.” Anthony Goldman had two words to describe the new luxury: “real and connected”.

Jenny Graham drew a parallel between people having their own personal wealth manager and lawyer: “Our role is much the same. You have to understand the clients. You have to understand what makes them different, even if it’s a family holiday, you understand the individual needs of each and every one of the members of that family. The personalisation is really key, but also just having that relationship so they know that they have someone to understand and guide them. And just being available for them every step of the way.

“Nobody has time anymore,” explained Davis, adding “It’s the one thing you can’t keep reproducing, and you need somebody to help you plan trips, and it takes a lot of time. So, our role is to work with clients to help them plan these trips. We have the knowledge, we are the ones who travel often, and they trust us in putting it all together. As long as the world is crazy, like it is, everybody needs help in planning to have a meaningful trip.”

A client trend that is somewhat peeving to Josh Alexander is a lack of advance travel planning: “In many cases there are unrealistic expectations, but we try to do the best we can and in many cases, we win them over and deliver”.

The comment met with unanimous agreement from the three other advisors on the stage, with Goldman stating this is especially so in Australia at the moment. “There’s that tipping point when families or couples haven’t planned their travel and then we get a call in June, saying they want to go to the French Riviera, and that’s when our relationships come into play. This is the difference. We know the general managers, we know the directors of sales, we call them, we email them, and sometimes we can do something.”

Jenny Graham quipped that just the day before, her team had been contacted by a Middle Eastern client who wanted to go and stay in Paris the next day. “He wanted not just one suite, but two suites. Luckily with the relationships we have there, we were able to fulfil his request.”

That’s when it’s time to be more proactive, as Wendy David pointed out. “Our role is also to be proactive, and when we build up this relationship with our clients, an email shows up that says, ‘Hey, it’s time to start thinking about the year, and this is again part of the fun process that this role has become, where we get to mold this and we work with them, and Virtuoso is actually addressing this with a program called Orchestrator that they are about to launch for us, which is amazing. We’ve been doing it for 20 years, which is to create travel plans. We sit down with the client and say, ‘let’s figure out the next five years, let’s not figure out the next two months’. We are always going to get the last-minute requests, because people find they have some free time and say, ‘let’s go’. But the big trips – the Africa, the Antarctic, the Asia, that requires a lot of planning and so this is exciting for us, because I think that is being embraced by our clients, and now that Virtuoso is really taking the lead in this, it’s coming full-circle.”

SMALL IS BEAUTIFUL

When it comes to travel, small is trending, according to Anthony Goldman. “Small is a growing trend in terms of intimacy, when you look at the smaller ships with smaller capacity. Again, it’s about relationships – being able to identify smaller ships with better service; that is definitely an innovation. Small group tours, like with Abercrombie & Kent… it’s about that intimacy, because they can get into different galleries and private openings of the Vatican, and things like that. Small is an innovation.”

THE INSTAGRAM MOMENT

“We get a lot of business off Instagram”, explained Goldman, adding “We get direct messages from our agency Instagram and our advisors, saying ‘I want that’. We sell on Instagram. And the other thing is that hotels are creating more and more Instagram experiences. It’s just capturing those moments.”

So, what should the future hold? “Access”, according to Josh Alexander, “hoping that hotels and tour operators continue to come up with more ways for our customers to have access to local experiences.”

MATTHEW UPCHURCH: SUSTAINABILITY TOP OF MIND

Before taking questions from journalists, Virtuoso CEO Matthew Upchurch drove home a renewed message of the importance of sustainability at the 2018 VTW Press Conference.

“We actually feel that travel advisors can play a role in elevating the conversation around sustainability,” stated Upchurch. “We have awarded sustainability awards for almost nine years now here at Virtuoso Travel Week, for hotels and for individual companies. Those of us who have been in this business for a long time have literally watched what some of these partners do that is just beyond amazing. We have been awarding that for a while. The outcome of the white-paper that was published already last year was very simple: How can Virtuoso make sustainability a greater factor – not the only factor by any means… How can we make it a greater factor in consumer choice? It’s that simple.”

The follow on from that is also very simple, says Upchurch. “If we can enable the people who are both delivering the best experiences and are doing the most incredible sustainable stewardship to be the most financially successful, because their places are full, that would be the most incredible way that we can help celebrate the culture, celebrate at the local economy and protect the planet. Take the Brando which has a zero-carbon footprint, in a place that’s amazing, but with coral reforestation, and deep-sea cool water for air-conditioning. And if the Brando is sold out because it’s both a fantastic experience, but it’s also a model for sustainability, then we will have done our job.”

One of the journalists asked a question about what the advisors want from virtuoso. Upchurch was quick on the uptake: “First of all, I think put in its simplest form, is ‘help me get better clients… not just more clients… help me be more efficient. How can I spend more time on that which is valuable?’ And I’m so glad you asked this question. I have become incredibly excited and bullish about AI, not as a threat, but it’s probably one of the best things that has happened to our profession. Today we think about AI and everybody talks about how it’s going to remove the human from the process.”

He went on, “When you speak to Siri, that’s AI in its simplest form. So, I actually think there is a tremendous opportunity to use artificial intelligence to help make the efficiency of the travel advisor even greater. There is no question that in a few years, everybody may be saying, ‘Alexa, I want to go to the Caribbean’. It’ll happen but do you really trust Alexa for that? The reality is, I think the people are very savvy and I think the trust factor is essential. One of the reasons millennials have started to really like to use advisors is it was the millennials, the later end of the boomers and the Gen Xers that invented social media. So, it’s not whether I can get into X, Y or Z hotel anymore, it’s that my advisor hangs out with the GM during Virtuoso Travel Week, and while my buddy who booked online got a perfectly good room and perfectly good everything, when I arrived I got treated like a rock star and my table at the rooftop bar has already been reserved. In a world where there is more pressure and everything is going faster, while I love technology I have always felt that it’s the human connection that makes the difference. You can’t take the human out of humanity. Over the next four days, with people here attending hundreds of thousands of appointments, even if I just met you for four minutes, when I send you clients, there is just something that happens.”

Upchurch recaps: “So, help me get better clients, help me be more effective and one of the things were finding now, keep my profession meaningful. When we announced what we were doing in sustainability last year, a large number of advisors came up and said, ‘You’ve just added a new layer of meaningfulness for us, because we’re actually offering something that’s not just about spending money’.”

WHAT MAKES THE BIG DIFFERENCE FOR THE CLIENT?

So, what’s the most important thing that consumers tell travel advisors? The single thing consumers tell Virtuoso, according to Matthew Upchurch, that differentiates, in their mind, a transactional travel agent from a truly trusted advisor is the conversation after the trip: “If you don’t have a conversation with me after the trip; if you don’t ask what went well and what would you change etc., then that’s not a relationship, that’s just a transaction’. That has been growing organically. It’s been a dream of mine for 10 years, and over the past year and a half we’ve invested a huge amount of our R&D. We are working on a platform that takes what has been happening organically and marries fun technology (kind of think of Netflix), with great purposeful discussions with consumers, to help extract meaningful conversations about what people want to do in the future, and make it a much more fun, seamless and scalable process.”

Of course, he was talking about the soon to be released Virtuoso platform, Orchestrator. Watch this space.