THE CHANGING FACE OF LUXURY TRAVEL: UNIQUE EXPERIENCES ADD VALUE
In pre-COVID days, travel and leisure—especially in the luxury sector—were considered an ever-expanding growth industry. In addition to tangible luxuries, sustainable and one-of-a-kind experiences were becoming increasingly attractive to high-end travellers.
Luxury travel was on track to emerge in the 21st century both as a consumer good and as a journey towards self-awareness. Experts predicted that long-distance trips would experience a massive upsurge in the years to come. Then things took a different turn. The virus has wiped out the industry’s gigantic ambitions in one fell swoop—or has it?
According to the 2016 Amadeus study titled “Shaping the Future of Luxury Travel,” the luxury travel market showed an average annual growth rate of 4.5% from 2011 to 2015, while the travel industry overall grew by 4.2% in the same time period. The study predicted luxury travel to grow at an average rate of 6.2% per year from 2015 to 2025, nearly a third more than the general industry’s 4.8%.
By contrast, recent figures cast a bleaker picture. In spite of their reputation as “the world’s travel champions,” only 37% of German citizens travelled for at least 5 days in the past year, about 40% less than in 2019. According to the 2021 tourism analysis of the Foundation for Future Studies, a slump of this magnitude has never occurred in the history of the travel industry.
But there is still some hope left.
Although it is currently hard to predict when and how people will travel in 2021, almost half of all Germans are planning to go on vacation this year. One in five would even like to take several trips. A third is still undecided and is waiting to see how things develop. A quarter is determined to stay home.
A survey recently published by the research group Urlaub & Reisen, forecasting trends until 2030, reveals a cautiously optimistic picture. If we manage to overcome the pandemic, the number of vacation trips will return more or less to a pre-COVID level. Compared to 2019, the number of longer vacation trips will decrease slightly, while the number of short trips will increase a bit. Bookings will be driven by a pent-up desire for travelling, but also because customers will expect travels to have a positive effect on their physical and mental health and sense of resilience. Long-distance travel has suffered a significant blow. Even though this sector will recover by 2023, it will not reach the levels originally anticipated. Cruises are expected to fare similarly. Luxury customers will base their traveling decisions on whether hotels adhere to high standards of hygiene, whether they can return home quickly, and whether they can reduce contact with strangers to a minimum.
All experts agree that the tourism industry will recover, but that it will be in an increased state of flux. The longer the pandemic lasts, the more pronounced and serious the changes will be. This new definition of travel may also afford greater opportunities to rethink tried-and-true concepts and adapt them to a post-COVID era. The key to success will lie in how service providers are responding to what travelers long for in this day and age.
Luxury travel: personal, slow, unique
The desire to travel remains very high, especially in the luxury sector, even though people will only take holidays in countries at a short or medium distance from their home, at least in the next two years. In Europe, travel within the continent will remain prominent, just as citizens from Asian countries will take trips within their region. Travellers will let their fear of getting stuck in one place guide their choice of destination. There will be an increased demand for packages combining a high degree of privacy with individualised services.
Emerging slowly in pre-COVID times, a desire for authentic and unique experiences is gaining momentum much faster than expected. Once a symbol of tangible luxury, “golden faucets” are no longer the only criterion for high-end travel. What counts is the intangible value derived from an experience. Price tags are hardly an issue. Travellers want to make long-lasting, unforgettable memories and live through moments that are literally priceless. Luxury travellers will start to look for sustainable concepts and hidden regional treasures. They will also want to spend quality time immersing themselves in cultural experiences. They will search out individualised services and opportunities to savour their experiences. Cruise operators will have to realign their concepts with a changed landscape, as well. In their industry, the future belongs to smaller-sized luxury boats with fewer passengers, cabins to which travellers can comfortably retreat, and special services and experiences that enrich the lives of (luxury) travellers.
Angelica Freyler, travel writer and marketing expert for the luxury travel industry.