Private jets. Five-star hotels. Luxury yachts. These are the images travel advisors often use in their social media feeds and on their websites to build their affluent traveler bookings.
But high-income travelers want value as much as any other household, and experts recommend that travel agents not overlook the opportunity to market the overall experience and benefits of a purchase to help affluent travelers feel like they are getting their money’s worth.
“Affluent travelers are willing to pay full price, but they want to know what they are getting for it, and how that price translates to the value they receive,” said Steve Cohen, founder and managing partner, Stelico Consulting Group, LLC, an Orlando-based data intelligence company.
“They want to know if an all-inclusive is really all-inclusive. So, don’t let them find out about a daily resort fee or other extra charges after they’ve booked. They don’t want to feel like they are being nickel-and-dimed,” said Cohen, who prior to launching his firm was a senior vice president of research at MMGY.
“High-income travelers want the companies that market and sell to them to understand, ‘I didn’t get to this place in my life being stupid.’”
For cruises, he said, “don’t surprise them with things like a daily tip that wasn’t mentioned previously. The more transparent you can be, the more likely these clients will come back to you.”
Indeed, one marketing consulting company, Near, analyzed the 2019 back-to-school foot traffic of audiences in high-income neighborhoods to see where consumers shopped. What they found was surprising to many marketers looking to tap into affluent travelers.
“Affluents” preferred shopping for school supplies at Target and T.J. Maxx, Near found. In fact, the Target store in Beverly Hills was the most popular, accounting for 48% of the overall traffic at Target’s approximately 20 stores in around Los Angeles. And footfall at T.J. Maxx’s Upper West Side store was 50% of the overall footfall seen across all T.J. Maxx stores in New York.
“The overall perception is that high-net-worth individuals live in a way that is vastly different from the rest of us, but when it comes to daily activities, their preference is not as dissimilar to other income groups in the U.S.,” said Smriti Kataria, vice president of marketing at Near.
“It’s imperative for travel marketers to align marketing messages with the true customer journey,” said Kataria. Companies like Near are trying to build market analyses for travel companies and other businesses by using activity-based data that defines actual behaviors.
Experts like Cohen point out that surveys can often tell less than the whole story about a person’s shopping behaviors because the survey respondent’s impression of who they are, what they do, and what they purchase sometimes is more aspirational than even they are willing to admit.
What about luxury family travel behavior?
At the same time, Cohen said, there is an initial inclination to define luxury travelers, like families, as wanting something different out of their vacations. With years of marketing and research experience at companies like Ritz-Carlton Hotels and Disney, Cohen believes that is a dangerous misperception to hold onto.
“You have to sell to that luxury target just as you would a broad-based market, like families. They may have more income, but what they want to do when they are on vacation isn’t different than what other families with less money want to do,” Cohen said. “You don’t need ultra, high-end experiences to get them to bite.”
“When I worked for Ritz-Carlton, we had that conversation. We came to realize we had lots of families staying at our properties, and they actually didn’t want to eat every meal in the formal dining room. They wanted a casual pool restaurant with burgers and fries, and things for the kids to do that wasn’t high tea in the afternoon.”
“The old mindset focuses on the CEO mom and the dad lawyer, and marketing accentuates that. But when you travel with your kids, you want the best experience they could have. If your clients are bringing their kids, talk about the all-inclusives and the value they create,” Cohen said.
Cohen pointed to how when Montage Laguna Beach opened in 2003, it redefined luxury accommodations for other high-end hotels in the area to be more casual. “It caused us to refurbish the Ritz-Carlton there, to forego the dark, wood-panel décor, and bring the ocean into the property,” he said.
Diane DeWitt Frisch, travel agent and owner at Diane Frisch Destinations, in Irving, Texas, concurred with Cohen. In fact, she visited the Ritz-Carlton Laguna Niguel after the renovation, and immediately fell in love with the more casual atmosphere.
“Now, it’s light and cheery. And the last time I was there, they had this cool art exhibit with painted surfboards. They brought a cool California vibe to it,” she said.
DeWitt Frisch praised the hotel’s brighter décor, outdoor fire pits, and rooftop bar, a departure from traditional Ritz-Carlton hotels. “I love this place for families heading to Disney (in nearby Anaheim) who want a more upscale experience, or as a pre- or post-trip stay,” she said. “And we have value add-ins from our consortia that we can do for our clients.”
Luxury does not necessarily equate to affluent
Additionally, Cohen cautioned, don’t take for granted that luxury travelers are all affluent. “If your ads are targeting high-income households, like creating Facebook look-alike audiences of the top 5% income earners, very likely your target is too small,” said Cohen. (Cohen’s company, Stelico, forecasts travel trends, and consults on brand equity, pricing and the evaluation of marketing communications.)
“Defining the affluent traveler as the Bulgari and Nordstrom shopper likely means you’re missing out on a lot of prospects who purchase luxury travel products and service,” Cohen said.
He described how, at Disney, the company slowly started to realize that some families save for up to seven or eight years to spend lavishly on themselves for a Disney vacation. “When they finally took that vacation, they did it, and they did it right,” Cohen said.
“What a lot of travel marketers don’t know is that the families that spend the most on a trip, very often earn the least. They save up for years to afford that vacation, and you will miss them in the awareness phase of your marketing if you don’t target them, too.”