by Peter J. Bates

Tuesday, June 26, 2012

The Highs, Middles & Lows of Today

Now that we’re at the half-year point, I’d like to take the time to pause and reflect on the past six months of 2012. One thing we know for sure is that U.S. consumers are indeed traveling again but there is still some skepticism among them. The psyche of today’s high-end consumer requires constant examination to ensure that our messaging is spot-on. Plus, economics around the world (think of the state of the Euro) and U.S. politics (the Presidential election and Wall Street in particular) continue to impact consumer mindsets and tourism in various ways.

Therefore, as we recall the past and look toward the future, I’ve outlined some highs, lows and of course, some points that fall into the middle for us luxury travel marketers to consider.

High #1 – Understanding Today’s Affluents
The most recent “Survey of Affluence and Wealth in America,” produced by American Express Publishing and Harrison Group, delivered some great news for our industry! “Travel is the number one discretionary spending category for affluent and wealthy families” – and this is because travel is a means towards achieving the goal of spending quality time with the people who matter most.

Additionally, enjoying positive and enriching experiences that encourage ‘quality in life’ are paramount to this audience. “Affluent and wealthy consumers across generations wants experiences that support their goals, values and passions in very personal ways, within an environment that shields them from the noise of the debate over wealth and success.” As luxury travel marketers for the finest experiences and products, we are poised to continue excelling as long as our delivery, attention to detail and customer service are flawless.

High #2 – U.S. Continues To Eye Europe
Uncertainty about Europe’s financial state of affairs is fortunately not affecting U.S. travel – consumers are still flocking across the Atlantic to enjoy the tremendous leisure experiences of Italy, France, Spain, and the new hot spot of Croatia, among others. Furthermore, the incentive market is starting to come back and they are heading to Europe. Effects of the incentive business rebound, though, are not expected to be felt before 2014.

In The Middle – Olympic & Royal Wedding Impact?
The UK – primarily London – has received exceptional coverage lately due to the Diamond Jubilee and the upcoming Olympics. Add this to the exposure that started last year with the Royal Wedding of William and Kate, and London has been center stage for quite a while. What remains to be seen, though, is if there is a long-term positive tourism effect and if marketing campaigns will drive consumers to experience the treasures beyond London – to the countryside, Scotland and Wales. Time will tell…

The Murky Middle – Economic & Political Matters
As referenced in the American Express Publishing and Harrison Group survey, the upcoming U.S. Presidential election and concern about America’s financial future have significantly affected the manner in which Americans view wealth. “The antagonism between the haves and the have-nots is the context in which affluent and wealthy consumers are making lifestyle and marketplace decisions.” And, while the U.S. economy is improving, the wealthy are experiencing a ‘lack of spending enthusiasm’ due to an apprehension about future economic and political stability. These are distinct and real concerns that can adversely impact the consumer psyche and spending habits.

The Lows – Major Concerns of Airlines & Visas
The cost of flying – Between the increasing price of fuel and never-ending passenger fees, it seems that the cost of flying will continue to rise, which doesn’t bode well for consumers who are already weary over airline charges.

Reduced airlift – Diminished air service remains a considerable problem. In many cases, airlift can make or break a destination, especially in smaller destinations served by one major carrier (consider various islands in the Caribbean).

Visa restrictions – Problems securing visas (for U.S. travelers going outbound and international travelers heading here) is a significant challenge. For some, it can be seen as a deterrent to even visit the destination. Sophisticated, luxury travelers seek ease and convenience from start to finish of a trip, which includes preparation of visas and all paperwork prior to departure.

In Closing
I’d like to end on an encouraging note – as there is much to celebrate when we consider where we were two years ago! What does the state of affairs today mean for us? The essence of the experience you deliver to consumers is key. The affluent want to make sure the travel experience is ‘worth’ it – and not just from a financial perspective. It must be enriching, enlightening and memorable – to an exponential degree. We might not be able to control global economics or politics but what we can control – the flawless travel experience – is what we should shine at day in and out.

Let’s continue the conversation on Facebook and Twitter.

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