Pre­mium Travel

Pre­mium or ‘lux­ury’ travel is not what it used to be, largely due to a change in ex­pec­ta­tion and a shift in trav­ellers’ un­der­stand­ing and def­i­ni­tion of what con­sti­tutes ‘lux­ury’.

Business Traveller (Africa) - - CONTENTS -

Pre­mium or ‘lux­ury’ means dif­fer­ent things to dif­fer­ent peo­ple, never mind the fact that the con­cept of lux­ury travel has changed over the years, as new gen­er­a­tions of trav­ellers start to de­mand a dif­fer­ent un­der­stand­ing of what con­sti­tutes the ul­ti­mate pre­mium travel ex­pe­ri­ence.

If lux­ury or ‘pre­mium' travel is not what it used to be, what does that mean for the trav­eller of to­day and the trav­eller of to­mor­row?

“We have en­tered a new era of lux­ury travel,” says the ex­ec­u­tive sum­mary in Amadeus's ‘Shap­ing the Fu­ture of Lux­ury Travel – Fu­ture Trav­eller Tribes 2030’ re­port.

“As newly af­flu­ent cit­i­zens pop up in dif­fer­ent re­gions of the world, and the travel in­dus­try ex­pands to meet their de­mands, how can travel brands cater for more lux­ury cus­tomers while some­how main­tain­ing a sense of ex­clu­siv­ity?”

The re­port goes on to say that “as emer­gent mid­dle classes seek the ma­te­rial as­pect of lux­ury travel, more ma­ture mar­kets are crav­ing a new, evolved kind of lux­ury. This is why of­fer­ing lux­ury cus­tomers a rel­e­vant, per­sonal and ex­clu­sive ex­pe­ri­ence will be­come even more cru­cial than it is to­day – it will be a dif­fer­en­ti­at­ing fac­tor be­tween old and new lux­ury.”

This ‘old and new lux­ury' taps into the gen­er­a­tional dif­fer­ences be­tween the trav­ellers of to­day and the trav­ellers of the past. It's some­thing picked up on by An­thony Berk­lich, founder of In­spired Cit­i­zen. He was speak­ing at WTM Africa in Cape Town last year, look­ing specif­i­cally at the mil­len­nial trav­eller.

“Par­ents of mil­len­ni­als per­ceive lux­ury in a some­what old-school way. But­lers in tuxe­dos, stuffy ho­tel fur­nish­ings, be­ing greeted by ‘sir' and ‘madam',” said Berk­lich.

But, ac­cord­ing to Berk­lich, mil­len­nial trav­ellers go in search of a more ‘au­then­tic' ex­pe­ri­ence – some­thing that of­fers them a bit more mean­ing.

“The nar­ra­tive, the story be­hind it, is what they are buy­ing into,” he said.

Ac­cord­ing to Berk­lich, mil­len­ni­als “seek unique and spe­cial, ex­clu­sive ex­pe­ri­ences and items that make them dif­fer­ent and cre­ate a sep­a­ra­tion be­tween them and the masses and, most im­por­tantly, al­low them to ex­press them­selves. They are a lit­tle nar­cis­sis­tic and will spend money to feel spe­cial.”

No sur­prise, then, to see some sup­pli­ers tailor­ing their of­fer­ings to meet these mil­len­nial de­mands.

“In the pre­mium prod­uct mar­ket, it is im­por­tant to cre­ate ex­pe­ri­ences that will wow our cus­tomers,” says Zoleka Sk­weyiya, Sun In­ter­na­tional Group Man­ager for Com­mu­ni­ca­tions & Cus­tomer In­sights. “Lux­ury re­volves around ex­pe­ri­ences, so we of­fer be­spoke and ex­clu­sive ac­tiv­i­ties at our pre­mium prop­er­ties, such as ‘rhino notch­ing' at Sun City and the ‘for­ag­ing ex­pe­ri­ence' at Ta­ble Bay Ho­tel in Cape Town.”

Berk­lich's points re­gard­ing the mil­len­nial gen­er­a­tion is not a sug­ges­tion that sup­pli­ers in the pre­mium travel space need to re­main fo­cused on this gen­er­a­tion. Sure, this gen­er­a­tion will have a big role to play in the global travel space go­ing for­ward, but there are other play­ers in this mar­ket and other trends that re­main con­stant, re­gard­less of gen­er­a­tion.

“Par­ents of mil­len­ni­als per­ceive lux­ury in a some­what old-school way. But­lers in tuxe­dos, stuffy ho­tel fur­nish­ings, be­ing greeted by ‘sir’ and ‘madam’,” . ”

“Pre­mium trav­ellers want com­fort and per­son­al­ized ser­vice, pri­vacy, spa­cious rooms, ameni­ties in the room, an of­fice away from the of­fice, and fast and re­li­able in­ter­net con­nec­tiv­ity,” says Neelma Maru, Direc­tor of Sales & Mar­ket­ing at Möven­pick Ho­tel & Res­i­dences Nairobi in Kenya.

“The pre­mium guest is well-trav­elled and knows and ap­pre­ci­ates ex­cep­tional ser­vice and prod­uct,” says Mark Wer­nich, Gen­eral Man­ager of the Taj Cape Town. “This mar­ket ex­pects their ho­tel to an­tic­i­pate their needs, thereby elim­i­nat­ing the need for ask­ing for as­sis­tance. From larger re­quire­ments, such as award­win­ning restau­rants and bars where one can en­ter­tain clients and col­leagues and spas to un­wind dur­ing a busy itin­er­ary, to smaller de­tails such as in­ter­na­tional plug points in all rooms, safes that can ac­com­mo­date large lap­tops, and a com­pli­men­tary shoeshine ser­vice.”

Those fea­tures may sound a lit­tle ‘old school lux­ury', but the Taj Cape Town is also mind­ful of the need to stay cur­rent and rel­e­vant in an area im­por­tant to all gen­er­a­tions, re­gard­less of

whether the guest is a 60-yearold ex­ec­u­tive or a mil­len­nial en­tre­pre­neur. That is, con­nec­tiv­ity.

To this end, the ho­tel has re­cently up­graded its wi-fi. Ac­cord­ing to Wer­nich, guests stay­ing at the Taj Cape Town are now able to surf, stream and work on the fastest ho­tel in­ter­net wi-fi con­nec­tion in the city of Cape Town. The ho­tel un­der­went a R2-mil­lion ($136,000) up­grade in in­fra­struc­ture, in­clud­ing an up­grade to the ex­ist­ing 100Mbps line as well. The light­ning­fast con­nec­tion is avail­able through­out the ho­tel's rooms, restau­rants, con­fer­ence rooms and pub­lic ar­eas, and of­fers guests un­capped and un­shaped ac­cess com­pli­men­tary. The in­creased con­nec­tiv­ity speed at the Taj Cape Town will also fa­cil­i­tate band­width-heavy 4K video calls, al­low­ing trav­el­ling work­ers to share in­for­ma­tion, dis­play mer­chan­dise, demon­strate in-room tech­ni­cal mod­els, mul­ti­me­dia pre­sen­ta­tions, and vis­ual ef­fects in real-life de­tail.

“Although trav­ellers to­day are feel­ing the eco­nomic pinch and are look­ing at ways to cut back on their spend­ing, when it comes to lux­ury items they are still choos­ing qual­ity and are pre­pared to pay more for pre­mium and af­ford­able lux­ury prod­ucts,” says Sk­weyiya. “Re­gard­less of whether some­one is vis­it­ing us for a meal, to spend a night in our ho­tels, or to be en­ter­tained at the casino or a show, they want to phys­i­cally con­nect with other peo­ple. A dig­i­tal plat­form is un­able to of­fer this so­cial el­e­ment that peo­ple will al­ways need, which is why we be­lieve the hospi­tal­ity in­dus­try will al­ways be rel­e­vant.”

The bot­tom line is that what con­sti­tutes ‘lux­ury' is a very per­sonal thing, with no one rule ap­ply­ing to each and ev­ery trav­eller across the board.

“Lux­ury travel is sub­jec­tive,” says the Amadeus re­port. “For one trav­eller, it could be a pri­vate mul­ti­mil­lion-dol­lar cruise around the Arc­tic on a fa­mous yacht. For an­other, it could be the re­as­sur­ance of hav­ing their di­etary re­quire­ments au­to­mat­i­cally catered for through­out their en­tire hol­i­day and a be­spoke de­signer wardrobe wait­ing for them in their ho­tel room – with­out them hav­ing to ask. For some, it could be hav­ing their favourite Miche­lin-starred chef flown in to pre­pare a meal in a Be­douin tent in the mid­dle of the Sa­hara. Cu­rat­ing some­thing that ap­peals to them on a spe­cific, per­sonal level that goes above a trav­eller's ‘norms' is key to the next chap­ter of lux­ury travel.”

SPEND

Ac­cord­ing to Tourism Eco­nom­ics data mea­sur­ing out­bound flights, global growth in lux­ury travel slightly ex­ceeded that for over­all travel from 2011-2015, with a com­pound an­nual growth rate of 4.5% (4.2% for over­all travel). The de­mand for travel has re­mained con­stant de­spite test­ing eco­nomic times, and the lux­ury mar­ket has re­mained fairly re­silient.

The in­fer­ence to draw, then, is that de­spite times be­ing tougher, the pre­mium end of the mar­ket con­tin­ues to thrive. Is it a case of “well, the wealthy will al­ways be wealthy, re­gard­less of the state of the econ­omy?”

It's in­ter­est­ing ap­ply­ing this line of think­ing to the cor­po­rate space, be­cause there's no doubt that post the 2008 global eco­nomic cri­sis, there has been a con­sid­er­able amount of belt-tight­en­ing and a much closer look at cor­po­rate travel pol­icy, with em­ploy­ees, by and large, no longer able to im­me­di­ately book busi­ness class or check into the clos­est five-star ho­tel.

“Cus­tomers in the cor­po­rate in­dus­try are be­com­ing more and more price sen­si­tive, but there is a good per­cent­age of trav­ellers who pre­fer the pre­mium ser­vice and are will­ing to pay for pre­mium prod­ucts,” says Maru of the Möven­pick Ho­tel & Res­i­dences Nairobi in Kenya.

“Most cer­tainly, busi­ness class travel from cor­po­rate com­pa­nies is no longer a given,” says Chan­tal Thome, Gen­eral Man­ager of AVIAREPS South­ern Africa, which rep­re­sents Ger­man air­line Con­dor in the South African mar­ket. “This pre­mium seg­ment is very im­por­tant as most com­pa­nies do not want to pay for busi­ness class any longer. There­fore, Con­dor's of­fer­ing in pre­mium class is geared to­wards en­sur­ing a lot more com­fort for the busi­ness trav­eller who has to go straight to the of­fice.”

Ac­cord­ing to Eye­forTravel, lux­ury con­sumers spend over six times as much on travel than the av­er­age con­sumer an­nu­ally, and the trend is for this dis­par­ity to widen. That's ac­cord­ing to its ‘The Global Lux­ury Travel Con­sumer' re­port. Ac­cord­ing to the re­port, the av­er­age trav­eller spends $1,690 a trip and takes around three each year. By con­trast, lux­ury con­sumers fork out $5,365 on each jour­ney, and take just over 5.6 trips.

Eye­forTravel's re­search found that this gap is more likely to widen than di­min­ish. Ac­cord­ing to the ‘Knight Frank Wealth Re­port 2017’, the num­ber of high net worth in­di­vid­u­als glob­ally is ex­pected to grow by dou­ble dig­its each year and well into the 2020s, adding mil­lions of lux­ury con­sumers into the mar­ket. For the travel in­dus­try, more good news is that lux­ury con­sumers are ex­pected to pri­ori­tise ex­pe­ri­en­tial (as per points raised ear­lier in this piece) spend­ing and put less em­pha­sis on per­sonal goods.

It is clear that con­sumers are switch­ing more of their dis­cre­tionary spend into leisure travel. While de­vel­oped economies are lead­ing this trend, as wealth be­comes more wide­spread, emerg­ing mar­kets are play­ing catch-up.

To this point, Travel Fu­tur­ol­o­gist, Ian Yeo­man makes an in­ter­est­ing ob­ser­va­tion, re­lated to emerg­ing mar­kets and, ar­guably, di­rectly trans­lat­able to the African con­ti­nent.

“Mid­dle class tourists from emerg­ing mar­kets want ma­te­ri­al­ism,” he says. “How­ever, with the rise of mid­dle classes in de­vel­op­ing economies, lux­ury be­comes less ex­clu­sive as more

peo­ple are ac­cess­ing it. As con­sumers be­come older, lux­ury be­comes more about en­rich­ment than ma­te­ri­al­ism”.

“Our re­search sug­gests that de­spite the chal­lenges, it pays to fo­cus on the lux­ury trav­eller and not just be­cause they are big spenders,” says Alex Had­wick, Head of Re­search at Eye­forTravel. In­deed, lux­ury trav­ellers are trend­set­ters and are an in­di­ca­tion of where the mar­ket might head in the fu­ture.

“The lux­ury trav­eller is at the fore­front of a num­ber of trends, in­clud­ing ris­ing dis­pos­able in­come, a fo­cus on the ex­pe­ri­ence, and grow­ing smart­phone us­age in the travel re­search and book­ing process.”

NEW PROD­UCT

Tak­ing all of the above into ac­count, it's no sur­prise, then, to see the likes of the world's big air­lines spend­ing heav­ily in the pre­mium travel space.

Bri­tish Air­ways is in­vest­ing £600 mil­lion ($788m) in its Club World class, in­clud­ing a sig­nif­i­cant up­grade of its cater­ing and the roll-out of lux­u­ri­ous bed­ding via its part­ner­ship with White Com­pany.

From 2019, there will also be a new seat with di­rect aisle ac­cess in Club World.

BA is also cel­e­brat­ing the first an­niver­sary of The First Wing. This is the air­line's ex­clu­sive check-in area for its First, Gold Ex­ec­u­tive Club and oneworld Emer­ald cus­tomers, which wel­comes trav­ellers through a ded­i­cated se­cu­rity chan­nel lead­ing di­rectly into the First lounge at Heathrow.

“Cus­tomers re­ally value the smooth and swift ex­pe­ri­ence from check-in through se­cu­rity and into the lounge,” says Carolina Marti­noli, Bri­tish Air­ways' Direc­tor of Brand & Cus­tomer Ex­pe­ri­ence.

The in­tro­duc­tion of the air­line's ex­clu­sive First Wing has also re­duced the num­ber of cus­tomers trav­el­ling through the nor­mal se­cu­rity search ar­eas, de­liv­er­ing a ben­e­fit to all fliers.

BA is in­vest­ing £4.5 bil­lion ($5.9b) for cus­tomers over the next five years, in­clud­ing the in­stal­la­tion of wi-fi and power in ev­ery seat, fit­ting 128 long-haul air­craft with new in­te­ri­ors, and tak­ing de­liv­ery of 72 new air­craft. Lounges are also ben­e­fit­ting from the in­vest­ment and the air­line has al­ready un­veiled new lounges in Rome and Aberdeen, with an­other new lounge due to open in New York later this year, fol­lowed by Geneva, San Fran­cisco, Jo­han­nes­burg, Chicago and Heathrow.

Delta's roll-out of its new ‘Delta One' busi­ness class ‘suites' and in­ter­na­tional-style pre­mium econ­omy seats is also pick­ing up steam. The air­line said in Au­gust that its up­dated pre­mium cabin will be added to five more tran­sPa­cific routes in the near fu­ture.

The Delta One suites are Delta's lat­est up­date to its busi­ness class cabin. The seats con­vert into lieflat beds and have slid­ing pri­vacy doors.

The cabin first de­buted last year on Delta's new Air­bus A350 wide­body jet, a plane the com­pany has billed as its new ‘flag­ship' air­craft. Those planes also were the first to fea­ture Delta's new ‘Delta Select' in­ter­na­tional-style pre­mium econ­omy seats.

Ear­lier this year, Delta started re­fur­bish­ing its Boe­ing 777 air­craft so that they would also in­clude both of the new pre­mium cabin seats.

The roll-out of Delta's up­dated cabin to ad­di­tional routes comes as it takes de­liv­ery of more Air­bus A350s and presses ahead with the re­fur­bish­ment of its ex­ist­ing Boe­ing 777s. Delta says all eight of its 777-200ERs and all 10 of its 777-200LRs should be up­dated by the end of 2019. Delta adds that it ex­pects to have taken de­liv­ery of 13 A350s by the end of 2019. Over­all, Delta has 25 Air­bus A350s on or­der, though the com­pany has de­ferred the de­liv­ery of 10 of those.

Also in the air­line space, Con­dor

“The lux­ury trav­eller is at the fore­front of a num­ber of trends, in­clud­ing ris­ing dis­pos­able in­come. ”

may have built a rep­u­ta­tion as a ‘leisure' air­line, but it has recog­nised the op­por­tu­nity pre­mium class presents. As a re­sult, it of­fers a three-class con­fig­u­ra­tion on the B767-300. Ex­tra ameni­ties in its pre­mium class on long-haul flights in­clude: footrests and in­di­vid­u­ally-ad­justable head­rests; ex­tra-wide pil­lows; in­creased bag­gage al­lowance; free seat reser­va­tion; sep­a­rate check-in at all Ger­man and many in­ter­na­tional air­ports; free late night and on­line checkin op­tions; and pri­or­ity check-in, pri­or­ity se­cu­rity check, pri­or­ity board­ing, and pri­or­ity bag­gage.

“In-flight en­ter­tain­ment has also be­come es­sen­tial, as pas­sen­gers do not want shared screens,” says Thome. “Thomas Cook/Con­dor of­fer mod­ern touch­screen IFE.”

‘BLUXURY’

Un­like ‘bleisure' trav­ellers (those com­bin­ing busi­ness travel with leisure travel), ‘bluxury' trav­ellers (com­bin­ing busi­ness travel with lux­ury leisure travel) in se­nior po­si­tions will likely have greater au­ton­omy over their de­ci­sion to ex­tend their travel for some leisure time.

That's ac­cord­ing to Amadeus. “Nonethe­less, they may still be some­what re­stricted un­til com­pa­nies be­gin to build ‘bleisure' or ‘bluxury' prac­tices into their cor­po­rate travel poli­cies. It isn't hap­pen­ing widely yet, but is some­thing the in­dus­try will need to ad­dress in the fu­ture.”

“Com­pa­nies need to im­ple­ment pro­cesses and pro­ce­dures to en­sure trav­ellers adding leisure days to a busi­ness trip are trans­par­ent and have the ad­e­quate in­surances in place,” says Jo Lloyd, Part­ner at busi­ness travel con­sul­tancy firm Nina & Pinta. “Whether a com­pany per­mits bluxury travel is not re­ally the is­sue – it is more to do with risk, re­spon­si­bil­ity and in­sur­ance.”

Lux­ury travel brands can ben­e­fit by ac­com­mo­dat­ing trav­ellers' in­creas­ingly blurred life­styles. Un­der­stand­ing the bluxury mind­set is key. In some cases, these trav­ellers will have the op­tion to fly home on a Fri­day

night at the end of a work trip, but will in­stead take the op­por­tu­nity to spend an­other 24 or 48 hours in a des­ti­na­tion and fly back over the week­end in­stead, for the same or sim­i­lar price. They may come to a travel provider hop­ing for ad­vice for 24-hour guides to a city, or to get them last-minute tick­ets to a con­cert or sports event they have found out about since they made the de­ci­sion to ex­tend their trip. These trav­ellers have trav­elled to ful­fil a busi­ness obli­ga­tion, worked hard, and are now seek­ing a re­ward and some well-de­served down­time. Their ex­pec­ta­tions trans­fer from need­ing to get their job done as eas­ily as pos­si­ble to want­ing to in­dulge in a des­ti­na­tion now that the work is over.

“If we have guests stay­ing for a week – pro­fes­sion­als com­ing out of Lon­don – for the first few days, I can feel that they're not re­laxed yet,” says Joachim Hartl, Gen­eral Man­ager of the Con­rad Al­garve in Por­tu­gal. “I de­lib­er­ately say to them ‘let us pam­per you'. By the fourth or fifth day, they're seek­ing other ex­pe­ri­ences – their ex­pec­ta­tions are chang­ing.”

“Although they will seek as­sis­tance from a trusted brand or party to make their de­ci­sions more eas­ily, a ‘bluxury pack­age' is un­likely to en­tice bluxury trav­ellers – they won't want to feel that they are fol­low­ing the herd,” says the Amadeus re­port. “Brands that serve a busi­ness travel de­mo­graphic will need to iden­tify and ful­fil trav­ellers' per­sonal leisure needs and cre­ate a be­spoke itin­er­ary that can be adapted to how they are feel­ing at the end of a busi­ness trip, if they are to con­vert them into bluxury cus­tomers”.

Again, there's that point about per­son­al­i­sa­tion and au­then­tic­ity.

THE FU­TURE?

Ac­cord­ing to Amadeus, over the next 10 years, the growth rate in out­bound lux­ury trips is pro­jected at 6.2%, al­most a third greater than over­all travel (4.8%).

“This could be a symp­tom of how po­larised travel is be­com­ing to re­flect the wealth pat­terns of the world's cit­i­zens,” says the ‘Shap­ing the Fu­ture of Lux­ury Travel – Fu­ture Trav­eller Tribes 2030’ re­port. “At the other end of the spec­trum, we are see­ing the in­tro­duc­tion of ul­tra-bud­get prod­ucts, such as the launch of

new cabin classes be­low econ­omy from Delta, United and Amer­i­can Air­lines. Lux­ury and bud­get mar­kets will be­come in­creas­ingly ex­treme to cater for to­mor­row's ‘ul­tra' mar­ket. Lux­ury long-haul travel will grow faster than any other form of travel, and will over­take bor­der travel (travel be­tween coun­tries that share a bor­der) shortly af­ter 2025. This is shown through Tourism Eco­nom­ics data that fore­casts the dis­tance of the next decade's lux­ury out­bound trips, based on cur­rent trends and growth rates.”

That's prob­a­bly en­cour­ag­ing for the sup­pli­ers in the pre­mium space, although what's ob­vi­ous is that these sup­pli­ers will have to bet­ter un­der­stand their pre­mium cus­tomers, if they are to win a size­able slice of the ac­tion.

The new era of lux­ury travel is geared to­wards achiev­ing an end-to-end lux­ury ex­pe­ri­ence from the mo­ment a pas­sen­ger gets in their taxi to the air­port un­til they ar­rive back at their front door from their jour­ney home. The in­dus­try is aware that greater col­lab­o­ra­tion be­tween par­ties is needed, but what does that mean on a prac­ti­cal level?

A ma­jor step­ping stone would be over­ar­ch­ing tech­nol­ogy that is able to col­lect pas­sen­ger data from the point of book­ing and pass it through the lux­ury travel sup­ply chain as the trav­eller moves through phases of their jour­ney. Real-time up­dates that will im­pair the lux­ury el­e­ment of their trip could be a call to ac­tion for which­ever party is re­spon­si­ble for the trav­eller at that time – the bag­gage han­dler, the chauf­feur, the staff at ho­tel check-in.

“Imag­ine you're on your way to the air­port, your taxi's stuck in traf­fic. Imag­ine the air­line was able to lo­cate you via their app, cal­cu­late your new ar­rival time at the air­port and au­to­mat­i­cally book you on to the next flight. Not only that, but what if all your fur­ther travel ar­range­ments were synced… your ho­tel knew your new check-in time? Imag­ine if you had the abil­ity to lo­cate your lug­gage at any time and find out where it is…,” said Sadiq Gil­lani, Se­nior Vice-Pres­i­dent, Lufthansa Group, from his speech ‘The Next Step for Air­lines’ at the 2014 TEDx Con­fer­ence in Ber­lin.

Hmmm…in­tu­itive and per­son­alised. I like the sound of that.

Is this the fu­ture of lux­ury travel? ■

BA first class

D’ore­ale Grande Club Floor and Lounge

DAVINCI Ho­tel & Suites

Möven­pick Ho­tel & Res­i­dences Nairobi

Lufthansa busi­ness class

Emi­rates first class

Vir­gin up­per class

Sin­ga­pore Air­lines

The Ta­ble Bay Ho­tel

The Royal Liv­ing­stone by Anan­tara

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.