That was the headline of an October 29th online article in Travelmarket Report: Voice of the Travel Professional and it caught my eye.
The article was an interview with Ron Kurtz, president of the American Affluence Research Center. It is a quick read, but I’d like to pull out a few of the main points that Ron makes in the article:
- Most of the top 10% of the wealthy are self-made millionaires with little in common with the rich and famous seen on TV.
- Significant percentages of the affluent consumers are either ignorant of or scornful of luxury brands, including hotel brands.
- That gap creates an opening for travel agents.
- Agents need to educate their clients, including the rich who are living quietly next door, about the value of luxury brands, and to convince them to travel in the style they can afford.
- The affluent have to be educated to the fact that there are differences in quality that make spending on luxury worthwhile.
- Once these travelers experience [luxury] brands they might realize that they are not overrated and that they deliver value.
Have you had enough? Does some of this strike you as a bit presumptuous?
I’ve had the privilege of marketing small ship cruises and tours for much of my career – many of them expensive trips – so I also have some experience in dealing with affluent travelers who have significant discretionary income. I wrote a blog post a few weeks back about marketing to these folks, the type made famous in The Millionaire Next Door: The Surprising Secrets of America’s Wealthy.
What I’ve come to learn about this segment of the traveling public is that while some may indeed be scornful or ignorant of luxury brands, many of these travel buyers consciously choose not to buy them. In other words, luxury as it has come to be defined by elite brands in our often status-driven culture simply isn’t important to them, and they prefer to define quality and value on their own terms. This might apply to their choice of automobiles, the neighborhoods they live in, apparel or shoe stores and, of course, travel and holidays.
There aren’t many of us who don’t appreciate the amenities and appointments of a five-star hotel or cruise vessel. That’s not the point, and many excellent travel agents who have typically experienced luxury properties on either a fam trip or as a group escort understand the distinction as well.
Ron speaks somewhat disparagingly about travel agents who “historically . . . have viewed their role as enabling clients to save money,” and that “agents can sell-up if they’re knowledgeable about these products.” If travel agents know anything about their clients, it’s probably that saving money is important to them. Believe it or not, this is valued even in this day and age.
To be sure, the responsible agent wants to make it clear to the client that they can’t expect champagne on a beer budget. But if the agent knows their well-heeled client is more comfortable with a Budweiser than with Dom Pérignon, how does the vintage bubbly provide either quality or value? I’ve known millionaires who would rather circle the globe on a freighter than aboard Queen Mary 2, so I would say the agent’s first job is to know the basics about their clients’ needs, tastes and aspirations. In my experience, good agents shouldn’t be expected to “convince” their clients to “travel in the style they can afford.”
Travelers can fairly say they’re more interested in the quality and value of their overall experience than about the star rating of a particular hotel property at which they’re staying or the cruise ship on which they’re traveling. For them, that determines whether spending is worthwhile or not.
Luxury brands may very well deliver this experience and often do, but so might a less-expensive, less-renowned option with which the client is perfectly comfortable. Quality and value are words that are thrown around a lot these days, but I’m not convinced that luxury brands have a lock on delivering them.
For travel providers, creating a good, solid brand doesn’t necessarily mean creating a luxury brand. And there are plenty of buyers among Kurtz’s top 10% of the wealthy who recognize this. Quality and value are in the eye of the beholder, so the task for the successful travel provider is to accurately and honestly position the product in the marketplace so that the features and benefits that prospective customers seek are readily discernable.
As the headline says – most of the affluent aren’t [luxury] brand conscious. And that’s a good thing for both travel marketers and travel agents.