This year will be challenging for travel marketers hoping to appeal to affluent consumers, according to a study from Unity Marketing.
Changes in affluent travelers' attitudes and behavior call for marketers to develop new strategies to capture some of the roughly $8,000 they plan to spend on their next vacation.
The demographic will be looking for new luxury travel experiences, all the while scrimping and saving on experiences that don't mean as much to them (such as how they get to their destination) and splurging once they arrive. They will delay making plans till the last minute and will be less loyal to their travel rewards programs, as they search out promotions that offer more meaningful and motivating rewards, according to the study, “Affluents Will Travel in New Luxury Style in 2015,”
Affluents plan to take an average of three vacations in 2015, but they are waiting until the last minute to book. This works in their favor, as they carefully research all the available options, compare the many promotional offers received, and tap the Internet and social media for reviews and recommendations.
For travel planning, they are more DIY this year, using travel professionals less than in 2013. Furthermore, due to growing global unrest and the Department of State "worldwide caution" warning issued on Jan. 9, it only makes sense to wait until the window of opportunity is right.
The share of affluents who are undecided about their travel plans this year more than doubled from Unity Marketing's 2013 luxury travel study, says Pam Danziger, president of Unity Marketing and author of the new study.
“Further, the projected budgets for their next vacation is lower than we've tracked since 2009," she says. "Consumer uncertainty and lack of confidence is never a good sign for marketers and that is the environment that travel marketers face this year."
Travel marketers’ mantra this year should be “hope for the best, but plan for the worst,” she adds.
“Given all the factors that can impact people's willingness to travel, especially overseas, travel marketers need to recognize that their customers will be harder to commit to proposed trips this year,” she says. “Those customers will be more demanding when it comes to getting the most for their investment and may look more aggressively to cut expenditures wherever they can. Further, this may be an especially good year for the travel insurance business."
Rewards programs are less motivating for affluents in 2015 than two years ago. A growing share of affluents have no plans or are undecided if they will redeem rewards for travel this year. Affluents report being less influenced in their choice of travel provider by the opportunity to collect rewards points.
“Since travel marketers rely heavily on rewards programs to market their services, this is an important call to action,” Danziger says. “It points to the need for travel providers to focus their marketing and rewards programs toward rewards that are more meaningful and motivating to affluent travelers.”