According to Boston Consulting Group, of the $1.8 trillion spent on luxuries in 2013, an estimated $1 trillion was spent on services – from private airline flights to luxury slimming clinics, to a five-star hospital stay where the patient will be waited on by a butler and the en-suite facilities include a marble bath (Guardian).
“Luxury is shifting rapidly from ‘having’ to ‘being’ – that is, consumers are moving from owning a luxury product to experiencing a luxury,” explained BCG senior partner Antonella Mei-Pochtler. “They already have the luxury toys; the cars and the jewellery.”
A breakdown of BCG’s research shows that approximately €460 billion was spent on one-of-a-kind travel adventures, such as expeditions to the Antarctic or bespoke safaris. Indeed, an increasingly ‘democratic’ interpretation of ‘luxury’ is forcing the industry to develop far more ambitious and creative – and expensive – products and services for their top tier clients.
“ Luxury is shifting rapidly from having to being ”
In the travel industry, this means everything from orbiting the Earth to diving the Titanic to eating at every three Michelin-starred restaurant in the world. Or perhaps spending $1.5 million to visit all 962 UNESCO World Heritage Sites over two years.
Yet despite such clear and present opportunities, the bespoke travel market in Europe remains largely fragmented, and according to Quentin Desurmont, President of Traveller Made, under-leveraged.
“A few players have emerged in Europe in the last decade,” he confirms, “truly able to provide excellence in Luxury Travel services to Ultra High Net Worth Individuals (UHNWI’s). However they remain small players with limited means to conquer the market. And they are not really organized to get the proper recognition from luxury travel vendors.”
“For both these reasons we have created Traveller Made. Inspired by the American Consortia that has achieved amazing success by uniting the world’s premier travel providers and helped each member agency realise its market potential.”
Mandarin Oriental, Barcelona. A Traveller Made Hotel Partner
So how does the Traveller Made system answer the needs of the market?
Traveller Made has 2 ambitions: To promote the best travel players in Europe amongst UHNW clients and organize an ecosystem of the luxury travel partners worldwide to become a real seal of quality for clients and vendors. We want every single UHNWI interested in travel to know that those best travel designers exist, and that they are members or Traveller Made.
Once the match is done between demand and offer, the best travel designers will do the rest, the real hard work which consists in growing their business, to strengthen their teams in order to shape tomorrow’s European luxury travel industry.
“ Over the last 10 years airline seats have increased by 40% and the number of flights by 24% ”
What are some of the key trends or shifts you have noticed in the luxury travel industry in the past 5-10 years?
Several trends have impacted the luxury travel industry in the past 10 years. The number of UHNWI’s has increased and so has their wealth. This is true in emerging markets obviously, but also in more developed markets. Even France has seen its top 20 fortunes grow last year while national GDP nearly stagnated (Challenges 500).
Massive amounts have been invested into the luxury hospitality industry, be it for development of new properties or for complete refurbishment of historical palaces. It is not really a challenge anymore to find a 5 star hotel or a very beautiful camp with a high level of service.
Also, over the last 10 years airline seats have increased by 40% and the number of flights by 24% (FACTS). The Internet has played a big role in changing awareness and knowledge regarding holidays, experiences and destinations.
Resulting in both a stronger desire for travelling and in a market with better price transparency and de-packaging solutions. More clients, more logistics solutions and higher desire to experience travel and destinations have resulted.
However, in the European market, no one has really dedicated themselves to serving the UHNW travellers, who demand the highest level of service across the organisation of their complete travel logistics. Whereas the American travel agencies have been quite good at this.
American travel agencies started their service revolution 30 odd years ago and are of an amazing standard now. European agencies have started slowly during the past decades to offer top service and pure tailor-made travel, but they are few and small players still. And Asia has not even started to consider it.
The Peninsula Hotel, Hong Kong. A Traveller Made Hotel Partner
What is driving the need for bespoke travel solutions when it comes to UHNW/top-tier consumers?
UHNW individuals that need the support of an expert in travel want at least four things. First of all they want a pure bespoke experience, in the sense that all travel activities are entirely adapted to their needs, rhythm, passion, phobia, children, hobbies, ages and etcetera.
They also expect exceptional moments. When you pay €200,000 for a 15 day trip with your three children you want to come back telling amazing stories others haven’t experienced, not the classical itineraries.
They expect 24/7 service. Particular attention must be paid during the preparation of their journey, but it is also important to continue supporting the client during the trip. When he wants to change the program for whatever reasons, it needs to be done immediately. Money is not a problem.
Finally, price transparency has become increasingly important. The super-rich are usually rich because they have also been able to spare pennies. And when you pay €100,000 per week travelling in Africa, you are entitled to get a cost breakdown. In some countries now, travel agency fees are just normal.
“ Itinerary changes need to be effected immediately, money is not a problem ”
Are bespoke clients looking at traditionally ‘affluent’ hotspots or moving more into travel based, more around experiences?
There are different segments of Ultra HNW Travellers. Some will spend their holidays between their house by the sea and their chalet. Others like classic European trips in 5 star hotels, setting or following the trends in St Tropez, Courchevel…
Others are more adventurous and want to live real experiential trips, be it for their own pleasure or because they believe it is part of the education they give to their children.
Experiential travel is a clearly growing trend. Not just because UHNW individuals are demanding it, but also because there are more and more competent travel agents and professionals able to deliver these experiences, supported by the appropriate camps, boats and logistics.
Shangri La, Paris. A Traveller Made Hotel Partner
What kind of trends do you feel we can expect in the coming 10 years?
I feel that the UHNW travel market in Europe could grow by ten or twenty times. More and more UHNW individuals will want to experience amazing moments with their families.
What I feel is going to be most interesting is whether or not the big luxury goods brands such as Louis Vuitton, Gucci, Cartier or Hermès will begin to invest in this new ‘experience’ territory, bringing to life the ‘lifestyle’ element they have so long marketed in their advertising campaigns.
To further investigate the UHNW travel market on Luxury Society, we invite your to explore the related materials as follows:
Published on Feb. 5, 2014 under UHNW