New horizons Why luxury travel is flying high
If, a decade or two ago, a friend told you they had booked themselves a luxury holiday, you would probably know what to expect. A first-class hotel. The most expensive destinations. But fast-forward to today, and the world of luxury travel has undergone a major evolution. A two-trillion-dollar market in 2022, that figure is expected to increase by roughly six percent by 2032. Driving it, is an idea of ‘luxury travel’ that has expanded to include a whole host of experiences, from unparalleled adventure holidays and passion-centred experiences, to the opportunity to explore previously untouched destinations, and even space tourism.
“After real estate, luxury travel is probably our members’ biggest spend,” says Samantha Mullen, Managing Director for UK, Hong Kong & APAC and Dubai at boutique travel management company Quintessentially Travel. She believes the market’s growth underlines a shift in perspective when it comes to wealth and spending – one that’s also reflected in the type of arrangements holiday makers are seeking.
“The era of ostentatious wealth is definitely in retreat,” Sam says. “That’s something we’ve shifted away from over the last decade or so, and we’re instead seeing our clients become far more conscious of what they’re doing with their money. When it comes to travel today, it’s not just about staying in the most expensive hotel, in the best destination. It’s about the experiences it can offer, and how representative it is of where it is in the world. For instance, does it employ locally? Is it engaged in the local community? A sense of place is much more important.”
These qualities aren’t strictly new. As Sam notes, for those who sought them out, opportunities to ‘give back’ have always been possible. But an increasing number of clients are now conscious of travelling consciously. “The travel industry has always done incredible work behind the scenes,” she says. “But a lot of the time it is exactly that: behind the scenes. Increasingly, our clients recognise that their money has impact, and so where they choose to put it becomes key.”
“The era of ostentatious wealth is definitely in retreat.”
Not-so-hotspots
But it’s not just about how to travel. For all holidays, destination is key. Here, Quintessentially have also observed a shift, despite the classic hotspots continuing to see demand. “France and Italy remain the two most popular countries,” Sam tells us. “That’s only got bigger after the pandemic. We opened Quintessentially Travel in Australia a year ago, and Australians absolutely love those two countries as well.”
But as tastes converge, how can travellers avoid the crowd? “It often feels like everyone in the world wants to go to the same destinations,” Sam says. “For members who don’t have families, or without children of school age, one option is to elongate the season and travel more out of peak times. Pricing has also become incredibly high, and you can save quite a lot if you push it back from July to, say, late September into October.
“Second cities are also becoming more popular,” she adds. “We’re all familiar with the beauty of Paris, Rome, or Venice. But over-tourism is an increasing concern. Part of our job as travel specialists is to say: ‘Listen, why don't you go here instead, to this city, which is nowhere near as busy, but which is equally as charming.’ Likewise, if a client wants to go on safari in South Africa or Tanzania, we might say: ‘Why not try Botswana instead? Somewhere a bit more under the radar, where you might get a more intimate experience.’ It’s about education, and digging a little deeper to widen our clients’ horizons, while still giving them a wonderful holiday with an interesting itinerary.”
But it’s not just pricing, or crowds, that are prompting a rethink. Last year brought a heatwave across much of Europe, resulting in record temperatures and numerous wildfires across the continent. As climate change continues to make hotter summers the norm, many holiday makers are looking for an escape. “It certainly feels that the traditional hotspots are just becoming ever warmer,” Sam says. “So, we’re seeing interest rise for places like Scandinavia, Switzerland, Austria, where you can experience summer in a slightly more temperate climate.
“Music tourism is also really on the increase!” she points out. “Taylor Swift is inescapable this year. But there's also been other big-ticket tours in the last 12 months, like Madonna and Beyonce. Given the cost of these tickets now, we're seeing a lot of people saying, ‘Actually, why don't I make a holiday out of this?’ They’ll choose a particular destination, they’ll get an excellent ticket, and a top hotel to stay in.”
Maybourne Riviera - South of France
Opening up
As Sam notes, these shifts have been a long time coming. But there’s also been an unmistakeable acceleration in recent years, driven by one event in particular. “We’d love to go past an interview without mentioning the pandemic,” Sam reflects. “We’re not quite there yet, but we did have nearly 18 months where people were really restricted as to where they could go, and how they could spend their time. Our client base especially is a particularly mobile group. Inevitably, that period has helped to shape how and where people now want to travel.”
As we move towards the second part of the year, uncertainty abounds across the globe. Despite post-pandemic inflation largely settling down, central banks continue to come under scrutiny, with many people closely following interest rate cuts. In the UK, the dust is yet to settle after a recent election, while the same is scheduled for the US later this year. For the travel industry, this has led to a predictable slowdown in activity, as families wait to see the outcome. Lead times – the duration between clients thinking they want to go on holiday, and that holiday taking place – have become shorter and shorter in recent years.
“As a consultant, the dream clients are ones who book their holidays 6 months or a year in advance,” Sam says. “It allows us time to think ahead and get ourselves organised. But at the other end of the spectrum, our travel managers will get a call from a client on a Thursday saying, ‘I want to go away on Monday.’ And it’ll be a long-haul flight, they’ll want a safari. That’s not uncommon. Just this week, we had a client call us to say they didn’t like the look of the weather for the place they’d booked! They wanted to go somewhere new, and they wanted guaranteed sun.
“Of course, the individuals we work with use a concierge service because they want that extra help for their lifestyle,” she continues. “They are more likely to be last minute. And so, we must make sure we’re agile enough to meet their requests.”
Safe travels Before your holiday begins, it’s worth checking the following:
1.
Departure/End location Personal travel insurance policies are usually not valid if your original departure and end point (i.e. where you booked the trip to start from/end) is different to the country in which you reside, and where the policy was taken out.
2.
Territorial limits Check that your travel insurance policy covers you for the areas you’re travelling to or through. Confirm that the area/s aren’t on the FCO Red list (‘do not travel’).
3.
Trip length Be aware of any limitation within your travel policy to your trip duration. Common restrictions for many high-net-worth policies include a limit of 90 days for any one trip. Some standard policies will also limit the number of days participating in winter sports.
4.
Travelling for medical treatment or cosmetic surgery Travel for medical treatment, and increasingly cosmetic surgery, is excluded under travel policies, as there is a potential increased risk of complications and/or unexpected longer stays for recovery. However, there are specialist providers offering cover.
5.
Pre-existing medical conditions The main reason for travel insurance is to cover the costs of emergency overseas medical treatment which, together with any repatriation required back to the UK, can easily run into tens or even hundreds of thousands of pounds. Make sure you answer all questions fully and disclose any pre-existing medical conditions, as most policies exclude situations where: you were awaiting diagnosis before you booked or commenced the journey; you were scheduled to undergo treatment when you booked or commenced the journey; you had been treated as an inpatient or outpatient or visited A&E (other than for routine check-ups) in last 6 months; or you did not take prescribed medication as directed. However, travel cover can be purchased from specialist providers based on individual circumstances.
6.
Documentation validity Ensure your passport is valid and has sufficient time left on it. Be aware of the “10-year rule” for certain EU countries: UK travellers with up to nine months remaining on an old passport used to be able to carry this over to a new one, meaning that a passport could be valid for more than 10 years. However, the rules changed after Brexit. To enter those countries now, your UK passport must have been issued less than 10 years before the date you enter the EU country (the “date of issue”). It must also be valid for at least three months after the day you plan to leave (the “date of expiry”). If your passport does not meet these requirements, you will be refused entry. It’s also a good idea to take a copy of your passport with you (or keep a digital one) in case of loss.
Contact
Tracy Jenkins
Assistant Vice President, Lockton Private Clients