Luxury Tourism and Travel

A snapshot of the current situation

• In 2021, valued at USD$1.2 trillion

  • Chauffeured tours, up-scale resorts, high-end cruises, etc.

• Luxury travelers - Willing to spend $8,000 - $32,000 on a trip

• Causes for the boom?

  • High level of saving - $5.4 trillion above expected

  • Incredible growth in net worth

  • Living our best life. Splurge!

• Massive increases in bookings for luxury rentals - Caribbean for example

But……

• Prospects for luxury tourism continue, but there is a potential pullback coming?

• What could be causing this potential pullback?

  • Fear of recession

  • Economic uncertainty

  • Depletion of savings

• Are there any I am missing?

Pandemic favors luxury

• Less density, better able to deal with the unexpected

• Spending more time away from people, need to update room experiences and amenities

  • Health experiences and wellness

• Move away from material luxury; need for authenticity

• Privacy and community

Continued growth post Pandemic

• Number of individuals that are classified as millionaires continues to increase (at least in the U.S.)

• There is that savings thing again (unintended consequence of the pandemic)

• Pandemic made people willing to spend on unique and authentic tourism experiences

• Greater access to microtrips

What is Luxury Tourism?

• Challenging question… Why?

• Highly situational

  • Social and economic status impact perception

• No longer just about material goods - more democratize than in the past

  • Linked to experiences that support identity and happiness

    • Uniqueness

    • Service provided

So How Would You Define??

Associated with the joy of living, referring to pleasurable feelings such as warmth, joy, amusement and selves, which is reflected by symbolic consumption and indulgence in special moments

Lies in limited edition, authentic, customized and one of a kind products, and one of the main goals for all those marketers interesting in positioning their offer in the luxury market is to create an illusion of acute personalization

Impacts of Culture on Luxury Tourism

• Markets that seek out luxury tourism tend to exist in cultures highlighted by individualism and masculinity. Why?

  (masculinity=achievement oriented)

• Greater individualism leads to lifestyles based on “I” and close family

• Masculine cultures have a preference for status and success

U.S. → more individual oriented

Motivations

• Two areas of motivation - intrinsic and extrinsic

• Intrinsic motivations (inner stuff)

  • Self-actualization

  • Self-fullfillment

  • Pleasure

• Extrinsic motivations

  • Social status

  • Ego

  • Prestige

    (money)

Elements of New Luxury Tourism

• Material features are the base, but only a piece of the pie

• Combination of features lead to a luxury tourism experience

  • Encounters with others

  • The placement of details

  • The stories behind the details

  • Feeling of luxury must be embedded in all touchpoints

  • Feeling of privacy and personalization towards each customer

For the Provider

• Recognition that luxury depends on cultural and societal traits

  • Finnish perspective different than Italian perspective

• Providing a level of authenticity

  • high level of service key, but not ridigity of other forms of service

• Luxury exists on a continuum

  • Ordinary luxury - Ultimate luxury

  • How are the customer’s needs attended to??

• Wellness a key component

  • Highly personalized