Executive Summary

Selling luxury travel today is all about options. Luxury travel brands are delivering more immersive, personalized travel experiences targeting a broader consumer base by age, source markets, and evolving traveler psychographics.

The surging expansion of global wealth worldwide, the emergence of new inbound and outbound markets, and new generation of highly critical, well-educated consumers are forcing the luxury travel segment to undergo unprecedented disruption. The sector is redefining itself and what the definition of luxury is. This report examines how some of today’s most forward-thinking travel brands are recrafting their value propositions in the luxury market today.

After speaking with many senior executives working in the tourism, hospitality, tour operator and cruise verticals, there are commonalities around how they’re selling their products to the luxe traveler of the future. The result of that can be succinctly identified as the “5 C’s of Luxury Travel” that work in unison to engage consumers physically and emotionally, online and in-destination, pre/post and during.

Those 5 C’s of Luxury Travel are: Culture, Cuisine, Community, Content and Customization. Regardless of the actual travel product or destination, these five combined elements are the primary drivers of engagement in luxury travel worldwide. More specifically, the best luxury travel brands are integrating them holistically to create more visceral brand engagement and expand audience reach. None of the 5 C’s are new. How brands are integrating and leveraging the power of each in new ways is.

Culture refers to both local culture and the cultural arts. Cuisine is the common connector across all traveler types. Community and content revolve around the power of virtual storytelling and compelling travel programming to bring like-minded people together. Customization is, of course, the biggest trendline in travel to personalize the experience for the individual user.

There are many other trends that luxury travel sales and marketing teams have identified, naturally, ranging from the rise of multi-generational travel to the robust growth in river cruising, but those are sector and psychographic-specific. The 5 C’s of Luxury Travel impact every travel vertical and every consumer.


Waldorf Experiences

Waldorf Astoria Hotels & Resorts

According to the Spectrem Group’s 2015 Market Insights Report1, there are now 10.1 million households in the U.S. with $1 million or more in investable assets, excluding the value of their primary residence. That is the highest number since Spectrem began tracking data in 1997, and it’s well above the pre-recession peak of 9.2 million in 2007. Spectrum also reports there are over 29.5 million affluent U.S. households with a net worth between $100,000 and $1 million in 2014, not including primary residence.

From a global perspective, the 2015 Wealth Report states there are 172,850 “Ultra High Net Worth Individuals” worldwide with a net worth of at least $30 million, representing a 3% jump in 2014 over 2013.

According to a 2015 study conducted by IPK International, commissioned by the annual ITB Berlin travel trade show, luxury travel has increased 48% in the last five years. (Luxury trips are defined by IPK as shorter trips with spending over $840 per night and longer trips costing more than $560 nightly.) Luxury travelers from the United Arab Emirates, India, Kuwait, Brazil, Australia, Canada and China (in descending order) spent more than $1,100 per night on average.

“Turnover did not increase due to higher spending per person but rather from a rising number of travellers,” reads the study. “Growth drivers were, above all, new customers in emerging markets, who moved up into the luxury travel segment, or those who returned to the luxury market after the crisis, such as travellers from the USA.”

Also from the ITB Berlin report: In 2014, the world population undertook 46 million international luxury trips, and the market share of these trips has risen from 3.9% in 2009 to 4.6% in 2014. The largest source markets for luxury travel are the U.S., with 9.2 million foreign luxury trips, and China with 6.9 million. The report also states that about half of all luxury travelers book travel through a travel agent, which it emphasizes is a higher share than other demographics.

“Many travelers define luxury differently today to previously,” says Dr. Martin Buck, director of travel & logistics at Messe Berlin, the host venue for ITB. “Instead of magnificent hotel furnishings or so-called ‘bling-bling,’ an experience that is priceless in its own way can be enormously valuable. Luxury today means unique experiences combined with the highest levels of comfort and individual services. An increasing number of people are ready to spend a lot of money for quality… who want to enjoy luxury again after financially turbulent years.”

This ongoing shift in luxury travel, from a focus on expensive products and environments toward unique destination experiences that resonate with the individual, was something we heard over and over during the preparation of this report.

Tina Edmundson, ‎global brand officer for Marriott’s luxury and lifestyle brands, told Skift, “Luxury in general is moving from accumulation of things to experiences. It’s not about here is where I stayed, but what I discovered. It’s about the exclusivity of experience that nobody else gets to do.”

Not surprisingly, Millennials are driving the shift. Among the North American consumer base, a larger than expected percentage of affluent households consist of Millennial-age adults, according to Henry Harteveldt, travel industry analyst with Atmosphere Research Group. His company reports that over 50% of U.S. citizens with a household income of $250,000 or more are under the age of 40, and they’re investing more heavily in travel than their parents.

“Today’s luxury audience under 40 grew up traveling so it’s part of their DNA,” says Harteveldt. “In the U.S., more than three in four luxury travel consumers say that travel is an essential part of their lives, so travel isn’t something they like to do. It’s something they love to do, and they have the income to indulge their passions.”

Harteveldt adds that U.S. consumers with household incomes exceeding $250,000 represent an anticipated $31.5 billion in online travel spending in 2015 (chart 1). That figure is expected to grow more than 3% in 2016. The next three largest online source markets are China, the U.K. and Brazil. Harteveldt says about 20% of that is mobile-only, creating a growing demand for more mobile-friendly travel content and on-demand booking functionality. That is revolutionizing the way travel brands are engaging audiences via targeted digital content strategy.


Chart 1

The above statistics collectively illustrate both the growth and growing age disparity of luxury consumers during a period of significant wealth increase. Aware of this, travel brands catering to the luxury market are expanding and evolving their product offerings in an attempt to capture the attention of a luxury travel audience in flux. The next generation affluent consumer is more formally well-educated, more critical and savvy about brand marketing, more technologically attuned, and much more well-researched in travel product than just five years ago.

As an example of that product expansion in the hospitality sector during Q3 2015, Four Seasons Hotels and Ritz-Carlton Hotels each have 34 new hotel projects in development. St. Regis Hotels, Shangri-La Hotels and Mandarin Oriental Hotels have 19, 17 and 14 new property developments underway, respectively, from New Delhi to Napa Valley.

The next generation luxury consumer is also much more open-minded than past generations. They prioritize personalization, inspiration, a sense of discovery, and a drive toward self-actualization above all else. That’s illustrated by the explosive rise among luxury product in the sharing economy. A sample New York Airbnb search for the first week in October 2015 shows 726 results for listings priced at $500 per night and higher. Moreover, Airbnb reported nearly 17 million guests in the summer of 2015, compared to 47,000 in summer 2010.

Luxury Travel Trends By Customer Age


Chart 2

In September 2015, Vancouver-based Resonance Consultancy launched its bi-annual Affluent U.S. Traveler Trends survey, which shows a couple of significant shifts in luxury consumer preferences.

In terms of preferred international destinations, Europe and the Caribbean continue to rank as the top two regions that affluent travelers of all age groups are either planning or considering to visit in the next 12-24 months (chart 2). However, Millennials are showing a much greater affinity for Asia, Australia/New Zealand, Canada and Mexico than their older counterparts. For example, the survey shows that 28% of Millennials are planning or considering a trip to Asia versus 13% of middle-aged respondents and 8% of seniors. For Canada, the numbers are 31%, 20% and 12%, respectively.

“It’s interesting that affluent Millennials, which make up about 16% of the affluent audience in America, have a much stronger attraction to the Asia/Pacific region,” says Chris Fair, president of Resonance Consulting. “So as we look at the younger group traveling further afield, that has some serious and profound implications for some of the traditional luxury travel destinations. It will also create new markets for destinations that typically haven’t seen a high percentage of American travelers.”

Another interesting shift in luxury traveler psychographics applies to what the affluent are doing while they’re traveling. In the Resonance survey, dining and sightseeing continue to be number one and two in terms of the most preferred activities (chart 3). However, rising into third place after moving up the ranks over the last five years, all age groups expressed a relatively equal desire to “learn new things.” Over 87% of all Millennials, middle-aged travelers and seniors responded that travel with an educational component is a priority for them.

This aligns with what Fair defines as the growing trend toward “transformative travel.”

“On a deeper level, transformative travel changes you and stays with you long after the temporal experience of traveling is over,” he says. “If you look at Maslow’s hierarchy of needs and self-actualization at the top of the pyramid, I think we’re now seeing travel as a primary means by which the affluent are achieving self-actualization.”

Fair argues that this is an opportunity for second-tier destinations to grow their affluent traveler segment, which he says controls an increasing share of total travel spend. Therefore, destinations should develop more educational and enriching travel product to attract the luxury audience, especially any types of experiences that provide shareable content on social media as a way to market and cross-promote those experiences.

“Cities like Portland [Oregon] and San Miguel de Allende in Mexico are great destinations that are focused on the quality of the travel experience for affluent travelers,” Fair says. “They don’t have any major attractions but there’s a lot of interesting and authentic things to do, especially with an emphasis on how you can immerse yourself in the destinations like a local.”

Delivering the Five C’s: Culture, Cuisine, Content, Community & Customization

Suppliers across all of the travel and tourism verticals are perfecting the luxury travel equation to attract the affluent customer in 2015. Today, the highest rates of conversion in the luxury travel segment are achieved by delivering a combination of the “Five C’s of Luxury Travel”: Culture, Cuisine, Content, Community and Customization.

Over and over again, those same five themes are coming together among the most sophisticated tourism, hospitality, cruise and tour operator brands in terms of both their product delivery and promotional campaigns. Combined, the five themes engage consumers’ mind and emotions in different ways from different angles, impacting the entire decision-making, purchasing and travel experience journey.


Chart 3

“Those five C’s are weaved into our thought process, and really the evolution of our brand,” says Jim Petrus, global brand leader for St. Regis Hotels & Resorts. “If you look at the customization element, especially, the reality is that we live in a world today that’s about “me.” So the successful luxury hotel companies today have the ability to make that consumer feel like the experience is in fact customized and it truly is about them.”

Here’s a brief overview of the Five C’s of Luxury Travel:

Culture: Culture is multi-dimensional, referring to immersive travel in local culture, programming around the cultural arts, and the consumer-facing culture of the travel brand and what it implies to the identity of consumers. Culture applies to the aforementioned concept around the growth of transformative travel where consumers want to be inspired with new perspectives to evolve as human beings. Culture, in all manifestations, relates to the path toward self-discovery that occurs when travelers are introduced to people and places that provide a platform for personal insight and development.

Cuisine: Good food and drink are now table stakes for the luxury consumer. They are merely the price of admission into the luxury travel marketplace, because every luxury traveler today is a self-anointed foodie thanks to an onslaught of travel and culinary media showcasing great chefs and great places to eat. Without exceptional dining experiences, you lose the luxury customer immediately because good food is the ultimate analog connector and a direct link to local culture.

Content: Content storytelling and travel product programming are the glue that connects luxury travel brands and luxury consumers through shared online and in-destination experiences that resonate with travelers’ emotions and egos. Women especially, who play a larger role in leisure travel planning for couples and families, have an inordinate amount of digital tools to first plan their trips and then chronicle and save them. Luxury brands today win the hearts of consumers at the very beginning of the travel planning dream phase with content.

Community: Community is the magic. Community first develops when people share content online among family, friends and strangers about the possibilities that luxury travel promises. Community also refers to those serendipitous moments when like-minded affluent people with common values spontaneously gather during travel experiences that are aligned with those common values.

Customization: The biggest trendline in travel today is personalization. Every luxury travel brand is attempting to customize the travel experience for the individual user by building more sophisticated traveler profiles and developing more exclusive programming that travelers can’t re-create on their own or with any other brand. “Customization is how we can differentiate our brand from others,” says Petrus.

What The Next Generation Luxury Customer Wants

Butterfield 4

Butterfield & Robinson

The discussion about what luxury travelers want in 2015 has evolved well beyond the shift away from hushed lobbies and stuffy dining rooms, white glove service, overbearing decorum and obsequious service.

Most people today are also well aware of the trend toward more experiential luxury travel, which is not longer a brand differentiator on its own. Looking ahead, luxury travel suppliers and travel advisors are increasingly selling more immersive experiential travel that connects clients as closely as possible with the people in the destination to create the most immediate and authentic experience as possible.

“What the next generation of luxury travelers want now is transparency, a sense of urgency, and engagement, because people don’t want to go to a destination to be an outside observer anymore,” says travel consultant Jack Ezon, president of Ovation Vacations in New York. “They want to be more immersed in their surroundings and feel like they’re living like a local. Millennials take it to another extreme. The younger client, I’ve found, wants a cool person who’s an insider to really be more of a host than a guide.”

Ezon says he and his travel advisor colleagues are seeing demand in the luxury space for opportunities where clients can have extensive conversations with locals to better grasp what the culture is like in destinations ranging from Dubai to Vietnam. They want to explore the hip pop-up shop or restaurant in New York or Buenos Aires, and see how New Yorkers and Argentine porteños really live.

“They want more of a confrontational, and I don’t mean that in a negative way, understanding of what it really means to be part of a certain culture,” he explains. “Not from an outsider, polished point of view.”

To facilitate that, Ezon forms relationships with small travel companies who supply hosts for group and individual travelers, and who focus on local cultural context more than just facts and knowledge. Because, traveling with a guide should not be a case of just ticking off all the iconic boxes in a destination. He says a lot of his Millennial and Gen X clients are not interested in seeing the Great Wall of China. Instead, they want to know the best places to experience nightlife in Beijing.

“So you’re not just looking at stuff,” says Ezon. “You’re listening to what you’re hearing and observing more of what you’re seeing. You’re really taking it in and experiencing it from a new perspective. I mean, you can look at something and not really see it.”

As an example, one of his favorite travel experiences in the last year was Hanoi where he talked at length with two thirtysomethings about the “American War.” Ezon says they wanted to know just as much about what Americans thought about the Vietnam conflict as much as he wanted to know about the legacy of the war there.

“And these conversations don’t just happen in a coffee shop,” he says. “Our clients are touring the city at the same time, maybe in a rickshaw ride or something like that. The modern traveler is not interested in using a tour operator as we know it, and if a tour operator doesn’t evolve, they’re probably not going to survive. We’re working with more of these smaller, more nimble, more personalized companies that are based locally.”

Tour Operator Case Study: Biking Is The New Golf

Butterfield 1

Heading into its 50th anniversary year in 2016, Butterfield & Robinson is a high-end tour operator specializing in “slow” biking and walking itineraries with upscale dining and accommodations. CEO Norman How says the idea of biking tours for the luxury segment is surprising to some people, but the trend toward wellness over the last two decades has spurred demand for active luxury travel for small groups and customized independent consumers. Biking and walking also inject affluent visitors more directly into communities in new and unsuspected ways.

“The appetite has shifted from what we might call trophy hunting, or that kind of blatant aspect of luxury travel, to one that’s more about the experience,” says How. “In newer markets like Russia and China, you still see consumers very much focusing on the bling aspect. Latin America, particularly Brazil at the very top end of the market, is moving into that space of really valuing the experience over hard luxury goods. In the American market, it is probably the most advanced in terms of where the market is focusing looking at the future.”

Chinese Travelers

Chinese President Xi Jinping’s crackdown on government corruption over the last two years, and the 3% devaluation of the Chinese yuan/renminbi currency against the U.S. dollar in August, have both had an adverse impact on Chinese spending on luxury good and travel.

Following the currency devaluation, Deutsche Bank announced, “We think persistent renminbi devaluation would lead to more expensive outbound packages, which would in turn slow down the explosive growth in outbound travel.”

In 2014, according to the China Luxury Advisors consultancy group, Chinese travelers still booked an estimated 115 million international trips, up 18% over 2013. The U.S. Department of Commerce reported that inbound Chinese tourists traveling to America jumped 22% in July 2014 over July 2013.

Furthermore, President Obama in November 2014 announced a new reciprocal visa agreement between the U.S. and China, which extended tourist visas from one to 10 years. Chinese-based Ctrip.com reported that U.S. visa applications shot up 50% shortly thereafter.

As an example of a recent client trip that could never be created by a client alone, Butterfield booked six people inside the house of a village chief in the Shan region of Myanmar. There’s no real tourism infrastructure there so B&R brought in beds, linens and furnishings to create a private pop-up hotel for three days.

“That kind of experience tends to be much richer than staying in the grand suite at the best hotel somewhere,” suggests How. “There’s a growing demand for savoring experiences more by traveling slowly versus quickly, so it’s much more of a local and human sort of pace.”

Of course, there’s still an expectation of high calibre infrastructure but there’s more demand for more customized travel out of the ordinary, which biking helps deliver in a unique way. According to How, he says putting someone on a bike gets them into the kind of landscapes and cultures where spontaneity happens easily, and where people are further removed from their normal lives.

“One of my favorite places to go biking is Vietnam, and not because of the pure biking experience, but when you get on a bike in Vietnam you’re suddenly entering the flow of local life,” he explains. “It’s like you’re in the middle of a river next to people with five pigs piled up on the back of their bike. That notion of tapping into the rhythm of local life is a big part of what people want. It goes back to the demand for authenticity and experience.”

“Biking is the new golf,” adds Ezon. “The growth opportunities in the market for specialized active travel is huge.”

How Mature Luxury Destination Brands Are Targeting Millennials

The first annual Impressionist Festival in Normandy, France in 2010 attracted over one million visitors to the region north of Paris with over 250 special events during the four-month event. In 2013, the second festival welcomed over 1.8 million visitors with over 700 events. Due to that success, the 2016 program is being extended an additional six weeks. The sum total of experiences at the Impressionist Festival offers an unlimited amount of choice for luxury travelers to personalize their travel experience. The success of the festival is based on the integration of the five C’s.

How Hotels Are Redefining Luxury

The shift in luxury travel toward a more nuanced, educational and immersive destination experience is impacting hotel design and programming. Two Marriott brands, JW Marriott Hotels and EDITION Hotels, for example, deliver this in polar opposite ways.

Typically a business travel brand, JW Marriott has opened new urban resorts recently in tourist destinations like Venice, Italy and Cuzco, Peru near Machu Picchu. Both properties emphasize educational experiences relating to the destination. The Peru property showcases area artifacts with in-depth contextual information, and the Venetian private island property teaches guests glass-blowing and lace-making inside a series of preserved buildings.

“So there’s a strong knowledge takeaway there, based on the authenticity of the experiences designed with a deeper, more powerful sense of care and intelligence,” says Tina Edmundson, ‎global brand officer for Marriott’s luxury and lifestyle brands. “JW really leans into this idea of leaving better than when you arrive.”

Edition Hotels is one of the few hotel brands to successfully straddle luxury and lifestyle experiences. The New York Edition, for example, is polished and serene on the street level ground floor with pale, minimalist decor. On the second floor, the bar and restaurant rooms are a lively counterpoint with a much more eclectic ambience. The London and Miami Editions feel like a grand living room of their respective cities, each filled with food and beverage areas organically integrated into their activated lobbies.

“The Edition customer is interested in something very unique,” says Edmundson. “The hotel is a microcosm of the best of what a city has to offer, and that itself is a luxury.”

“The Impressionist Festival after the first year got a huge amount of coverage because it’s about the connection between food and art and experiencing the country of France in new ways,” says Anne-Laure Tuncer, U.S.A. director of the France Tourism Development Agency. “Luxury travelers today want to upgrade their stay, add more activities, hire personal guides, sleep in private villas and things like that. They are out to discover new places and new people in countries that they have already been to.”

Tuncer adds that about 20% of U.S. travelers visiting Paris in 2010 ventured to other destinations beyond the greater metro area. In 2015, that number topped 30%, illustrating the growth in demand for more adventurous travel experiences offering a greater sense of exploration and discovery.

“People want to be inspired, so we’re showcasing an entire region that gives people so many things to choose,” says Tuncer. “People also want behind the scenes. They want to understand why the product is what it is and why it’s special or why it took so long to create.”

Content and community are inherent aspects of any festival but they reach a new level here in the historic city of Rouen and the magnificent Rouen Cathedral that plays the role of ad hoc festival headquarters. From here, thousands of tours lead to the same pastures where some of the world’s most famous paintings were created, the coastal cities of Honfleur and Deauville, and Monet’s home in nearby Giverny. The opportunities for discovering and engaging with such a large volume of like-minded people are endless, as are the options for sharing content online, which many of the area destination marketing organizations reshare. The Impressionist Festival is basically evolving into a marketing tour-de-force for all of northern France.

Content and community partnerships are how mature brands are ensuring their relevance for next generation luxury consumers. The Principality of Monaco provides an interesting example of how destination marketing organizations are developing partnerships with non-travel brands to open up new markets and cater more to Millennials at the same time. This year, for example, Monaco partnered with Jazz at Lincoln Center in New York to engage younger, educated audience members with an appreciation for culture. The jazz theme also aligns with the shift toward more relaxed, unbuttoned luxury.

“The Jazz at Lincoln Center is an example of how we’re engaging a younger audience in a lively and spirited way, although it was really more about attracting Millennial people than jazz people,” says Cindy Hoddeson, U.S. director of the Monaco Government Tourist Office. “Affluent Millennials, and every other generation for that matter, are more focused on authentic experiences with their money and not just goods. There has definitely been a shift toward more casual luxury as well, so not everyone feels the need to wear tuxedos in Monaco as much these days.”

In a similar initiative, Monaco developed a co-marketing partnership with the Dr. Zhivago Broadway theater performance to promote the 2015 Year of Russia programming in Monaco. The principality arranged a year-long schedule of special events celebrating Russian cultural heritage, and the collaboration with Dr. Zhivago gave Monaco access to both the U.S national arts media and culturally attuned luxury consumers. The DMO also developed the MonacoRussie2015.com website in an effort to push more content marketing, which Hoddeson says is a major focus for her organization.

“Content marketing is becoming much more relevant in terms of telling our story to people and utilizing digital communications to interact more with affluent travelers today,” she says. “I think people relish the hunt and discovery of a destination, and that is something we’re trying to develop by creating alliances with like-minded organizations in the United States, like the Jazz at Lincoln Center and Broadway community.”

Also according to Hoddeson, a big challenge for legacy luxury travel brands with a perception of being expensive is showing value for spend. “People don’t hesitate to spend money but they do want value, there’s no question about that,” she explains. “So our hotels are focusing on individualization as part of the value proposition. People are willing to pay for the highest levels of luxury but they want to feel like they’re getting something special for what they’re investing in.”

How One Upscale Destination is Building Community With Content

VisitBritain is launching an entire new web platform in October 2015 to better engage customers and build community with content highlighting more local destinations beyond the iconic cities and tourist attractions in London and Scotland. This is squarely aimed at the more adventurous and curious-minded traveler, especially returning visitors who have already visited London and the surrounding countryside.

“Our average age of that group of people who want to do cutting-edge things is 43, which is not what you would think, but they are the ones who want to get up and do stuff,” says Sally Balcombe, CEO of VisitBritain. “What we’re seeing is we’re looking at people differently, and what we’re seeing is that they want to experience things rather than look at things.”

VisitBritain’s popular “Countryside” campaign is an example of what to expect with the tourism bureau’s new website. Balcombe says that the overarching mission is all about promoting the idea of the British countryside to a luxury audience that doesn’t just want to look at castles and hear a long, lengthy list of historical trivia.

“They actually want to go in and live, breathe and immerse in the culture,” says Balcombe. “Basically they want to have experiences, and we want to change their perception about the experiences that they can have.”

That’s only half of the destination marketing strategy. The other half revolves around VisitBritain shifting the focus away from itself toward a cadre of popular travel influencers in England, Scotland, and Wales. The new website will provide a larger platform for these content providers to share their experiences with their existing network and expand those communities with VisitBritain as the conversation hub.

“So it’s about not we as VisitBritain talking at these groups, but actually getting people that visitors respect to talk to their audiences about what it’s really like to come over here and experience things,” Balcombe says. “The influencers were out on the road doing stuff and sharing stuff, so that’s a very different type of campaign, rather than the national tourist board saying, “Come. In Britain, you can do this.”

Case Study: Shifting a Destination Brand Toward the Luxury Customer

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Tourism Australia

Australia provides an excellent case study of a destination with a strong brand perception that wanted to shift that perception toward a more upscale audience. For decades, the country was known as fun, laid-back and outdoorsy thanks to the high-profile campaigns selling that image dating back to the 1980s.

In December 2011, Tourism Australia unveiled a new 2020 strategy with the objective of growing Australia’s tourism spending to $114 billion by targeting luxury consumers across all key markets. To accomplish this, the DMO is developing an integrated series of new campaigns highlighting ways to experience Australia with more unique, upscale and location-specific activities. The campaign themes revolve around food/wine, coastal/aquatic destinations, indigenous culture, and travel product “collections” branded by Tourism Australia, such as Luxury Lodges of Australia and Ultimate Winery Experiences of Australia.

Kicking off the 2020 strategy in May 2014, Tourism Australia launched a $10 million, multi-platform Restaurant Australia campaign to raise awareness among luxury travelers about the upscale food/wine product across the country. After one year, the DMO measured a 22% increase in the perception of Australia as a foodie destination among people who hadn’t visited before. Moreover, international visitor arrivals in Q1 2015 jumped 10% and visitor spend increased 14% over 2014.

Tourism Australia also developed a variety of content partnerships aligned with culinary culture such as “Avec Eric” with celebrity chef Eric Ripert at Le Bernadin in New York. Similar to Anthony Bourdain’s television work, Ripert travels around Australia to meet innovative chefs and suppliers while showcasing the diversity of the country. In a similar vein starting in January 2016, chef Rene Redzepi from the Danish restaurant Noma is opening a pop-up restaurant in Sydney for 10 weeks. Noma has been voted the best restaurant in the world numerous times over the last decade. This type of culinary coup works well to promote a destination like Australia as a culinary capital, as evidenced by chef Heston Blumenthal’s six-month reconstruction of his British restaurant, Fat Duck, in Melbourne this year.

Also launching in January 2016, the next big Tourism Australia marketing initiative is focusing on Coastal & Aquatic Australia. Food will still be an important component of the content vision to drive attention to Australia’s luxury coastal lifestyle, especially beyond the major cities.

“A lot of our research has said that our searches for beaches and our searches for islands has dropped significantly from where they used to be,” says John O’Sullivan, managing director of Tourism Australia. “Whereas Restaurant Australia is about addressing a misconception, this is about playing to a strength that hasn’t been focused on for awhile.”

Customer Data Collection is the #1 Priority Disrupting Hospitality

The hospitality sector provides the most interesting lens in the travel marketplace into innovation in luxury travel and luxury travelers’ changing expectations. Surprisingly, many hotel sales/marketing staff and C-level executives continue to trumpet “anticipatory service” as a differentiator, but this is no longer a true differentiator because it’s expected and delivered even in the upper mid-market hotel space.

During the development of this report, numerous hotel executives explained a scenario like the following to show why their brand is special, when in fact it’s relatively common. For example, a family tells their server at dinner that they’re in a hurry because they want to catch the eight o’clock finale of a reality game show. The server then tells the restaurant manager, who asks a room attendant to deliver a bowl of popcorn to the room at 8:15.

That’s a cute and charming story but it happens at all luxury hotels and it’s not enough to drive incremental revenue in 2015. Today, the focus has shifted toward personalizing the guest experience in all of its manifestations.

“Personalization of the experience is the most important mandate of the luxury guest, because customer relationship management and serving unique content are now expected and old fashioned,” says Samuel Chamberlain, director of luxury sales, Asia/Pacific, for Hilton Worldwide. “In order to win the heart and advocacy of the luxury traveler today, experiences must be bespoke and personalized.”

Toward that end, Waldorf Astoria Hotels & Resorts recently developed a program called “True Waldorf Service,” where a personal concierge contacts the guest ahead of the stay to gather the client’s travel preferences. Upon arrival, the concierge meets the guest in the lobby, bypasses the check-in desk, and takes them directly to their room. During the stay, the concierge helps the guest book activities, recommend a specific spa treatment, etc., based on the initial knowledge gathering phase.

At St. Regis Hotels, over 60% of bookings come through the Starwood Preferred Guest (SPG) channel, where the hotel company can collect a significant amount of data detailing personal guest preferences. Complementing that, the St. Regis butlers collect more personal information that guests wish to share, and then it’s their responsibility to enter that information into a proprietary database in the property management system. That data includes things like preferred room temperature, food and beverage choices, specific times for housekeeping, details regarding turndown, etc.

“Those are elements that would say to me, because this is all about me as a luxury customer, that you know something about me and you delivered on what my personal tastes and desires are,” says Jim Petrus, St. Regis Hotels’ global brand leader. “And we can replicate that because our butler program is worldwide, so we’re able to take robust data and combine that with an effective delivery service through the butler program.”

Petrus adds that St. Regis is developing a new app for launch in 2016 designed to extract further customer preference details out of the point-of-sale system and the property management system. The algorithm will identify trends among customer-specific buying patterns, such as food and beverage preferences collected from menu selections.

“That will assist us with pre-arrival information that will enhance our data drive and our butlers’ ability to execute even further,” says Petrus. “At that point, we’ll be able able to connect more dots of different nature, so we know really what creates the pulse in that customer, to make the customer experience even more personalized.”

How Content and Community Are Leading to Hotel Booking Conversion


Peninsula Hotels, St. Regis Hotels and Waldorf Astoria are good examples of how hospitality brands use content and community, revolving around destination-specific cuisine and local culture to customize the luxury guest experience and drive incremental direct bookings.

In April 2014, Peninsula Hotels redefined online travel content marketing in the hospitality space with a new website including over 1,400 pieces of individual content highlighting both destination and hotel programming. Since then, Peninsula has uploaded over 500 new content pieces, including 40 new branded videos.

“The website exceeded expectations in every way in terms of more conversions,” says Robert Cheng, group VP of marketing for Peninsula Hotels. “In the first year, we saw a 35% jump in direct bookings. It’s all about options, so we add about ten new content entries per week, which is radically improving time onsite. It’s important because we want to position ourselves as experts in each destination.”

According to Eliza Wan, e-commerce manager/marketing for Peninsula Hotels, “Traffic increased by 20%, so users are showing much stronger engagement with the new site. Over 32% of the visitors consumed video and over 50% of them touched on the booking funnel on the website.”

Peninsula partners with companies like LUXE and Net-A-Porter to develop content for both the website and a series of new on-property destination guides. Some of that content revolves around the Peninsula Academy of travel experiences designed to immerse guests in the local culture in ways that are aligned with the brand’s value proposition. For example, Peninsula Paris offers a $4,200 La Vie En Rose day package for two billed as “The Ultimate Parisian Experience.” The itinerary includes a well-respected fashion expert who will escort guests to the flagship Hermes store for shopping outside of normal business hours. That’s followed by a visit to the salons of famed couturier Elsa Schiaparelli, who was a contemporary of Coco Chanel.

“The Peninsula Academy has been around since 1997, but it was revitalized two years ago to offer more refined things that you couldn’t do on your own,” says Cheng. “An exclusive tour of Hermes is not something where you can just knock on the door and ask to come in. That experience also comes with very insider access with someone intimately familiar with the fashion houses in Paris.”

Peninsula Academy activities have also been adjusted to align with the rise in multigenerational travel, which Cheng says is even more pronounced in Asia. On the landing page for each Peninsula property, all of the Academy experiences are listed and each features activities for families to do together. A sample of those include making wind chimes in Japan or learning puppet making from masters in Shanghai and Hong Kong.

Looking forward, Cheng says the company is “exponentially expanding” its investment into videos with a strong story hook and high production values. One example is a video shoot with monks at the Wat Pho temple in Bangkok where Thai massage was invented.

“We’re all inundated with so much messaging so everyone is wary of generic messaging,” he explains, “The Peninsula story is told better with more visuals so we’re developing tons of video, but they’re not commercials, they’re narrative storytelling.”

Waldorf Astoria Hotels is developing more unique programming with its new Signature Experiences initiative at each property, focused on crafting experiences ranging from gladiator training at the Waldorf Astoria Rome Cavalieri to dog sledding at Waldorf Astoria Park City. A handful of the hotels also offer Waldorf Astoria Driving Experiences following a successful test run in 2014, where guests can drive exotic cards to explore the surrounding destination. These experiences are curated by the hotel teams and, according to Chamberlain, they’re designed to make each Waldorf Astoria “more of a destination in itself rather than just another 5-star luxury hotel.” Driving experiences also open up infinite opportunities for spontaneous food and cultural discoveries throughout the region.

“I believe that the biggest shift in luxury traveler psychographics over the past five years is in the explosion of choice and development of luxury hotels, and how luxury travel brand experiences now have a similar affinity and cachet in the eyes of consumers as hard luxury goods,” Chamberlain says. “The luxury traveler is now spoiled for choice, and as a result has developed a personal affinity for particular luxury brands that resonate due to the emotional connections that they offer.”

St. Regis Hotels also continues to develop its exclusive Aficionado destination experiences. Petrus says, “They’re designed to bring the specific destination to life in a meaningful fashion.” In New York, for example, guests can book backstage access to some Broadway shows. In Napa, the hotel provides wine tours with winemakers and private cooking classes with celebrity chefs like Jean-Georges Vongrichten.

“So these things are one-of-a-kind with exclusive access that’s tied to the destination and to the particular features and amenities of the property,” says Petrus. “Being able to come up with hard-to-replicate packages and access programs have helped define what St. Regis is all about.”

How Cruise Companies are Engaging the Next Generation Luxury Traveler

Uniworld 2

Positioned as Carnival Cruise Lines’ luxury tier, the Seabourn brand consists of all-inclusive, all-suite small ships with staff sourced primarily from Europe and South Africa. According to John Delaney, SVP of marketing and sales at Seabourn, the evolution of luxury has surpassed well beyond good food and service, which he calls table stakes, and the bar continues to rise every year. Presently, Seabourn is rolling out a restaurant partnership with Thomas Keller, one of America’s highest rated chefs.

Rather, the focus for selling luxury cruise travel has shifted toward more enriching and educational destination experiences for the more erudite, educated traveler.

“The luxury industry brands have really stepped up their game because the luxury customer today is accustomed to highly personalized and authentic travel,” says Delaney. “Today’s luxury traveler wants the destination delivered to them just as well as the service onboard the ship. So if we’re going to South Africa, for example, we have a speakers onboard who are experts in South African wine.”

In January 2013, Seabourn launched “Seabourn Conversations” with business and cultural leaders such as Steve Forbes, Steve Wozniak, and film producer Jon Landau. They and others given scheduled presentations and made themselves available for casual conversation with passengers. Delaney says the small ship sizes help foster and facilitate those intellectual collisions.

In June 2014, Seabourn partnered with UNESCO World Heritage Sites to bring aboard speakers familiar with the history of the sites included in any given Seabourn itinerary. Today, the cruise company’s land programs visit over 150 UNESCO sites, so Seabourn partnered with Our Place: The World Heritage Collection, which sends photographers around the world to document the 1,007 UNESCO sites. In turn, they’re invited aboard the Seabourn ships to kickstart the onboard educational journey for passengers previous to visiting them in person.

Delaney says, “This way, guests have a much deeper appreciation of why a site is inscribed as a Word Heritage SIte. Most people don’t have a very in-depth perspective about the cultural significance of each one.” Average participation at the Our World presentations exceeds 70%, which is high for these types of experiences, and at least least 50% of the trips have UNESCO speakers. The talks are also recorded to provide content for the in-room entertainment systems.

Likewise, the surging growth of river cruising is driven by the demand for more in-depth destination experiences. River ships spend a lot more time in port than they’re seagoing counterparts, providing more opportunities to connect with the local culture.

Uniworld is positioning itself as a leader in luxury cruising with a lower passenger/staff ratio and custom designed ships, such as the new 445-foot S.S. Catherine with capacity for 150 guests. Uniworld President Guy Young says the industry norm for that length is 190 guests, which impacts the destination experience depending on the number of people per land itinerary.

“A lot of companies are trying to maximize the passenger count per every square inch of space,” says Young. “Also, we used to arrive in port and everyone would go on the same standard experience, but we’ve been observing over the last few years an increasing demand for more immersive land excursions. Now people want smaller groups and more options in terms of the number of excursions, so we’ve radically changed how we offer our excursions to deliver more personalized travel opportunities.”

Today, there are now at least two to three land-based options per destination stopover designed for different traveler types. They include Regular and “Gentle” walking tours; “Go Active” tours for more athletic individuals; “Do As The Locals” tours to food markets and other non-touristy venues; and various “Village Day” excursions that bring passengers face-to-face with locals, such as a homemade meal in a resident’s house.

“So this whole idea about personalization and customization and getting to know the local culture has been implemented into our sales strategy to resonate with the luxury modern traveler of today,” says Young. “That’s working out really well, because personalized attention really helps attract the younger demographic.”

Top Five Takeaways for Selling Luxury Travel

Holistically integrate the 5 C’s of Luxury Travel — Top travel brands combine culture, cuisine, content, community and customization throughout the travel journey from the dream phase to the return home, both online and in-destination. None of these exist within their own silos anymore, and they should be designed to cross promote each other to resonate fully with customers’ emotions.

Luxury today is all about options — The more options available to the luxury traveler, the more they can customize their travel experience. Within every travel product, integrate different tiers of experiences at different price points, so customers are in control of creating their own travel journey aligned with their personal preferences.

Educate, inspire, create a path to self-discovery — Luxury travelers today are seeking to develop as more evolved human beings, as emphasized at the top of Maslow’s Pyramid, and they’re using travel to fulfill that quest. Travel brands should ensure their customers end a trip with new perspectives that will change their views and open their minds in some demonstrable way long after they arrive home.

Immersive experiences are the new experiential experiences — Just because luxury travelers are doing something experiential doesn’t necessarily mean they’re experiencing the destination with any authenticity or depth. There is unquenchable demand for more Immersive travel to understand the essence of a destination, and the most successful brands are providing a more direct connection to that essence of place.

Content + Community = Conversion — Better travel programming leads to better content. The best luxury brands are developing more and more content to engage customers at the top of the marketing funnel, and every one of them says that leads to more conversions. Furthermore, all marketers know that when you tap into customers’ aspirational goals with inspiring content, it builds community around a brand.

End notes and further reading

  1. “2015 Market Insights Report,” Spectrem Group. Retrieved at http://spectrem.com/Content_Product/Market-Insights-2015.aspx
  2. Resonance Consultancy: 2015 Affluent U.S. Traveler Trends
  3. The Wealth Report 2015
  4. Financial Times Business of Luxury Summit
  5. What Will 2015 Bring For Chinese Tourism in the United States