Luxury travel continues to grow despite international economic instability
According to Boston Consulting Group, the sales growth rate of luxury travel is set to achieve a constant 14% in the next 2 years, surpassing the growth rate of all other luxury sectors, which is estimated at 7% annually.
Splendia, a specialist online reservations platform with luxury hotels estimates a 30% increase in its turnover this year, compared to last year. During the first 5 months of 2012, Splendia registered a 13% increase in the number of reservations, compared to the same period last year. An official of Splendia told Le Figaro that wealthy clients book more luxurious room types, while spending less on transportation.
The head of Kuoni’s Emotions division dedicated to luxury travel confirms that there have been less wealthy customers, however, with higher spending. For this summer, rich customers spend on average 5.900 euros per person, for their summer vacation compared to 5.720 euros per person for the summer of 2011.
Another premium travel operator, Donatello, told Le Figaro that sales of its luxury products (priced from 5.000 to 10.000 euros per person) have grown by 20% since November last year. A representative of Donatello added that the most affected has been the upper middle class, the company witnessing an ebb in buying power.
The CEO of Voyageurs du Monde has a different view, insisting that the niche of ultra rich travellers cannot make up for losing upper middle class customers. The company reports that even a segment of the rich, specifically those in top positions in the financial sector, is seeing a decrease in spending, once at a level of 50.000 euros per holiday. In the past 6 months, Voyageurs du Monde has seen its number of reservations decrease by 15%, which represents 20% of its turnover. The company’s CEO estimates that the increased marketing costs of reaching out to wealthy customers in emerging markets will weigh in heavily on the profits of premium operators.