LUXURY REPORT‐ II edition Research by TBP Consulting & Pangaea Network December 2011 ‐ January 2012
1
2
3
LUXURY MARKET TRENDS II EDITION Premises
Today the financial crisis is affecting also luxury market.
In general the market is showing consumptions stagnation.
The second edition of the luxury trends research has been held to check how sales and business have been changing.
New points: responsible tourism, emerging destinations and resorts, adventure behaviours of luxury travellers.
The study
The survey was launched in the second week of December 2011 to each market trade database.
The panel: 338 Travel professional (hotels, tour operators, travel agents, transport companies) involving 5 Countries (Italy, UK, Spain, France, Germany).
Tour operators and travel agents are the group that mainly participated in the luxury survey. Most of them are aged between 36 and 55 years.
4
TRAVEL TRENDS Business performance in current economic climate
Notwithstanding the crisis more than 40% have increased their business.
The economic conditions have negatively impacted the 30% of respondents’ business (37% in 2010).
Compared to 2010 research, +6% of panels declare to have maintained the booking at the same level of previous year
Germany is the country less affected by the crisis followed by UK that maintains business as last year for the 35%.
Italy is facing the greatest problems due to the crisis considering that 47% of business registered a decrease in performance compared to last year.
5
Impact of the crisis European Results
46% of experts are divided between those who assert that customers travel less and those who argue that they travel with the same frequency definitely spending less.
17% of respondents think that the recession did not impacted business.
The situation seems more optimist compared to 2010 when only 4,8% were not affected by the crisis.
All markets
Italy and Spain are the countries that registered a contraction of travels because of the crisis. Germany has the majority of respondents that have not been affected by recession.
6
2012 forecasts Please give your predictions for the travel outlook for 2012. Do you foresee economic recovery? Increased budgets? Changes in booking patterns?
The majority of respondents consider that the conditions of the recession will not improve in 2012 and the situation will remain the same of 2011.
In general all markets foresee a slow recovery only starting from 2013.
The only segment that could maintain the same performances in the future is luxury travel.
In 2010 survey, 51,1% of interviewed expected to see an improvement of market conditions in 2011.
7
TRAVEL INDUSTRY TREND SUMMARY Impact of the crisis on the travel market
Shorter holidays.
Lower class of travel.
Clients more price and value for money sensitive.
Travelling less.
Decrease of long haul trips.
Increase of direct bookings.
Booking later looking for deals.
In 2012 the situation will remain the same of 2011.
Recovery expectation in 2013.
Italy and Spain: most affected countries by the financial crisis.
8
LUXURY TRAVEL TRENDS Impact of the recession on Luxury travel
3 out of 5 respondents recognize that the crisis has also impacted this segment.
However 2 out of 5 trust on this market that is maintaining good performance facing the crisis.
Only 12% of respondents have no experience in luxury travel.
In 2010 more than 55% noticed an impact from the recession.
Trade industry market believes in this segment more than in 2010.
Have you noticed any impact of the recession on the luxury travel market?
In general these clients are now looking for better deals and travelling closer to home.
In UK and France more than 50% thinks that luxury travel has been affected by the crisis. In Spain more than 72% has the same opinion.
In Italy and Germany the most thinks that luxury travellers are a strong segment not very sensitive to the recession.
9
Quite evenly, over half of respondents states that the trend varies from case to case while the other half is divided between those who register a decrease of luxury holidays and those who think that are not affected by the crisis.
In 2010 more respondents were convinced that luxury travellers reduced the number of holidays per year (36%).
Have you noticed a trend amongst luxury travellers to take fewer holidays / vacations per year during the economic recession and today?
In this case all markets gave homogeneous answers considering first that is not really possible to generalize
10
Changes due to the crisis
Almost a half of respondents think that henceforth luxury travellers will be more and more sensitive to price and value for money.
22% recognizes in the last minute bookings a trend that will take hold.
Cross-country comparison
Italy is the most optimist market with 31% of respondents that believe in a reversion of behaviours as before the crisis. All the markets give weight to the new trend of luxury travel to pay more attention to value for money.
11
Number of luxury travels per year
Luxury travellers use to travel quite often, at least twice per year (41%).
A great percentage travel even more than 4 times per year.
Compared to 2010 the trend is a little bit changed having been reduced the number of booking of more than 4 holidays (57%).
Cross-country comparison
Compared to 2010 when the most frequent luxury travellers were the Italians, in 2011 the 88% of Germans professionals says that the luxury customers book more than 4 trips per year. In average, the biggest percentage represents 2/3 holiday booking per year.
12
Seasonality
The majority of respondents recognized in December the first month for luxury travels, followed by the month of January and September.
The trend, however, varies in each country.
Cross-country comparison
As in 2010 for Italians the trend is unchanged, peaks are in August and December.
The same was for Spain while last year luxury travelers seems to have travelled more in October and December.
In UK the month that registered the most significant number of luxury travel is July, October and December in Spain, January and September in France.
For Germany the first months for luxury travels are December and January with over 70% of answers.
13
Average length of stay
Half of respondents say that the average length of stay for luxury travels is 10 days.
Compared to 2010 luxury holidays have been shortening with the increase of percentage referred to trips of less than 1 week.
Cross-country comparison Average time spent on luxury holiday / vacation is...
Germany declares 1 week at the 35%.
Italy shows the same trends of 2010.
The other countries have reduced a lot the long holidays (more than 2 weeks): Germany -10%, Spain 29%, Uk -48%.
14
Booking period
The result is uneven: 28% of the respondents assert that the booking window has not changed.
Another 28% of panels say that the customer is usually booking between 1 month and 14 days before the trip.
24% said that the booking window is between 1 to 2 months before departure.
El resultado no es uniforme, el 28% de las respuestas asegura que el patrón de reservas no ha variado.
Cross-country comparison
Compared to 2010 in each country the percentage referred to bookings realized lee than one month has increased: Italy +15%, Spain +32%, Germany 14% and UK +44%.
15
Luxury traveller’s holidays spend
Compared to 2010 +5% of respondents thinks that luxury travellers are spending more than in the past.
More than a quarter believe that there is no overall trend.
The same amount of people thinks that luxury travellers have not changed habits in their expenses.
Cross-country comparison
Italy and Spain show great percentages among those who think that luxury travellers are spending less on their main holiday.
In France, more than a half thinks that luxury travellers spend always the same amounts.
16
Most on trend style of luxury holiday
51% of respondents believe that the more trendy holiday is the experiential one.
29% said that the holiday sea, sun, sand is considered trendiest holiday.
As in 2010 experience is the trendiest style even if the percentage has decreased (-9%).
Cross-country comparison
Germany is in countertendency, only 12% consider the experiential holiday as the trendiest.
There is a tendency for safaris in Germany and for cruises in UK.
Spain gives weight also to culture holidays.
17
Most important consideration for luxury travellers
As in 2010 survey edition quality of accommodation, privacy/exclusivity and reputation of hotel/destination are the most important consideration for luxury travellers.
The price represents 23%.
Factors such as nightlife, facilities for families, sports and activities are not influential.
There is more interest in Spa facilities while less for gastronomy respect on 2010 preferences.
Cross-country comparison
After quality of accommodation, UK is the only market that consider price as important
Spain do not consider reputation important unlike experiences
For Germans also Spa facilities are one of the first influencing factors
In Italy luxury travellers are first influenced by destination reputation.
18
Sources of information
In most cases, customers are informed by friends and family or look for information on specialized magazines and travel guides.
Internet as source of information ranks third with 19%.
Compared to 2010 it seems that luxury travellers are less interested in TOs catalogues and web as sources of information.
Cross-country comparison
Italy is the first country where luxury travellers use internet to be informed on their trips.
On the contrary for Germans, French and Spanish people the most important source of information are the travel guides.
Germany is the only market giving weight also to TOs catalogue.
19
Booking channels
54% of respondents believe that luxury travellers are more likely to book through TO or TA, in 2010 this percentage was 45%.
Direct bookings are decreased from 17,5% to 11% of respondents opinions.
Cross-country comparison
TOs/TAs are still an important channel to book luxury holidays in all markets, first of all in Spain, Italy and UK.
Direct booking is considered at the most by the 13%.
20
Emerging destinations
The emerging destinations are concentrated in Far East countries.
In 2010 the preferred destinations was on Indian Ocean and other Exotic destinations such as Caribbean and French Polynesia.
21
Adventurous luxury travellers
69% believes that luxury travellers are not more adventurous in their travel plans than other travellers. That means that they are looking first for good accommodation, relax and exclusive services in line with the most important considerations analyzed before.
Cross-country comparison All markets show a homogenous opinion with the only exception of UK that thinks different, answering “yes” the 52%.
22
Responsible tourism
42% believes that sustainable tourism is not taken into account, on the contrary another 40% believe that it is taken into account but does not influence the traveller’s choice. The result is that responsible tourism is not a key factor in luxury holidays.
Cross-country comparison
German luxury travellers are the most sensitive to responsible tourism followed by English and Italians but it does not represent an influencing factor.
Responsible tourism is considered influencing booking decision at most at 15% in UK.
It is neither considered an element to distinguish.
23
Preferred accommodation
Quite the totality of respondents asserts that luxury travellers like best very high level of accommodation, from castles and luxury hotels to private villas preferring to have exclusive and private services at their disposal.
Cruises and sailing boats are not considered as luxury accommodation.
Cross-country comparison
Preferred accommodation is very high level hotels and castles.
Only in UK luxury traveller are thought to travel on cruises.
Spanish luxury travellers like most to stay in private villas.
24
Qualitative information
Luxury travel market is slightly affected by the crisis.
Luxury travellers are more sensitive to value for money.
Solution to maintain business: Improving professionalism and quality of service, increasing Customer loyalty and trip personalization, focusing on communication and visibility, lowering prices, offering new and more exclusive proposals.
An experiential holiday is the trendiest style followed by sea and sun vacation.
Far East countries are the emerging luxury destinations.
Sustainable tourism does not come into decision about holiday destination.
Preferred accommodation: high level hotels and castles.
Top influencing factors: Quality of accommodation, Privacy and exclusivity, Reputation surrounding the hotel/destination.
Luxury travellers are not adventurous.
They prefer to book trough TAs or TAs, even if direct booking is increasing.
This document is intellectual property of The Blueroom Project – and Pangaea Network Those persons, who received it, commit themselves to not reproduce or transmit the information contained in the document without quoting the sources.
25
