It used to be that “luxury traveler” meant one thing – a wealthy client who wanted to be pampered with exclusive, cushy, elite accommodations and amenities.
But that’s no longer true, according to the L.E.K. 2017 Luxury Travel Study.
The study – based on a survey of 1,972 US travelers aged 17 and older, conducted online during the first quarter of 2017 – reveals that there’s not just one kind of luxury traveler. There are many different kinds. Overall, more and more people are seeking out aspects of luxury when they travel. And they’re willing to pay a premium for the elements of luxury that matter to them, while scaling back on other luxury features. Some of those luxuries don’t fit the traditional definition.
The survey identified seven different luxury travel segments – but largely focused on three broad groups:
- Elite: High on the “indulgence spectrum”; tend to require luxury across their entire travel experience
- Aspirational: Willing to indulge in high-end experiences in specific situations
- Prudent: More likely to be budget stretchers; nevertheless, will partake in limited luxury travel from time to time
Each of these groups views luxury through a different lens, and each has a different set of priorities, opening up a range of market segmentation opportunities.
The segments reflect several important trends in luxury travel – more people are indulging in “travel splurges” (travel is now the leading channel for discretionary spending, outranking dining out, food and wine at home, and traditional categories like apparel, accessories, and jewelry. While fewer than 10 percent define themselves as “luxury travelers,” four out of five say they indulge in travel luxuries at least occasionally. Younger generations are more likely to splurge on travel than their elders.
But the most important insight is this: now that there are more kinds of luxury traveler – and more ways to define luxury – hotel operators can’t limit themselves to just one kind of luxury offering. The traditional definition – 100 percent pampering – will be fine with elite travelers. But prudent and aspirational luxury travelers are more selective. They’re looking for a few indulgences that really matter to them. And those indulgences will differ from one demographic to another. For some, luxury means experience, not pampering – luxury travel might involve an adventure/expedition trip, with just a few amenities like gourmet meals or comfortable accommodations. For others, a luxury might be a convenience – “Uber when you need it,” rather than the more traditional offering of a town car for the day. Increasingly, luxury travel will involve a mainstream traveler who wants to “toggle” into luxury elements.
For suppliers, that means knowing your customers and tailoring the offering to make sure it provides a “just right” level of luxury for each segment. Targeting – and embracing the “age of the upgrade,” with better/best options overlaid on modest bases – will be among the keys to success.
To find out more about the segments – and about how to tailor your offering to the new kinds of luxury traveler – click HERE.