This past Spring, at the Amex Luxury Summit, I had a chance to visit with Jim Taylor, President of  Harrison Group, and get beyond the Summit Agenda. “How much interest among your  research clients in Word of Mouth ?,” I asked,

“There's an enormous supplier desire  to understand the storytelling issue in travel, and how people craft the stories they tell, “ Jim said. “And there's a lot of mythology about when people come home from a vacation, what they do with their story. Everybody wants to talk ‘word of mouth’ without really understanding how a person comes to be responsible for a recommendation that important.

International travel is no longer the exclusive province of the rich. Over the next several decades, hundreds of millions of new entrants to the middle class will want not only the things—but also the experiences—that money can buy.

But where, o where, in this world can those hundreds of millions go?  And with what consequences to the rest of us  middle class or upper class folks, or the super rich,  who have the best all worlds right now when it comes to travel?

The authors proclaim:  ”Indian call-center employees, Russian petrochemical engineers, Chinese middle managers, and Brazilian salespeople are already scouring the web for deals on trips. They want to see Paris from the Eiffel Tower, relax in the Maldives, and play blackjack in Las Vegas.”

According to the United Nations World Tourism Organization, international tourist visits are expected to double soon, from roughly 800 million in 2008 to 1.6 billion by 2020 (see the exhibit “Travel Explosion”).

However, only so many people can visit a particular building or beach in a given year. Where will all the other tourists go? This skyrocketing demand for travel will lead to a “scarcity of place” and to several probable market responses:

First, most tourism-related prices, such as hotel room rates in popular cities, will continue to escalate as demand outstrips supply. — big time!

Second, rationing — and the resulting waiting lists — will become commonplace.  As rationing becomes more prevalent, the very existence of waiting lists will, to rationed, economically sensitive destinations, paradoxically, spur demand.

As we see it, the authors have barely scratched the surface of probabilities and possibilities. — We were quick to post a big, yet uneasy,  payday for the luxury development and provider sector.
Any thoughts on the Malthusian threat to luxury travel?

Hershel Sarbin

• New Breed in Luxury Hotel Development-- We've got a lot of people around the globe who have made a lot of money and want to get into luxury development. They are perfectly happy to have a hotel as a perfect toy. An example of that is Palazzo Sasso in Ravello. The owner made his money out of canned tomatoes, and the Palazzo is his reward, and ours, as well.
• Getting the Basics Right-Thoughtful Luxury-At the luxury level we take so much for granted today—internet connections anywhere; prompt, high quality room service; decent sheets and toilet paper, and much more. How about a good bedside light? How many beds do you get into where you can really read in bed? Or something as simple as controlling the room temperature? Super-luxury is being able to turn on light switches, read in bed, have good bathroom lighting, so you can manage your contacts and shave without cutting yourself
• Something Old, Something New-Something Bold, Something True-There is a definite undercurrent of conflict between an inherent desire for something new, and a genuine appreciation of familiarity with the already-known and experienced. Why do we get the really confident luxury-level traveler, going back to the same place time and again? It could be Sandy Lane in Barbados or fishing in Mongolia. Why not?
• Too Tough to Get To? We should appreciate the desire of individual spenders when it comes to top-level traveling to have an experience that is not easily accessible. In other words, the more difficult it is to get to a place for the leisure consumer, the more attractive it becomes.

In 2006 Travel Weekly asked writer Harvey Chipkin to compile both global and U.S. revenue data that would not only capture The Big Picture, but Sector revenues in Air, Hotels, Cruise, Tour Operators, Auto Rental, plus Meetings and Conventions. Good baseline information, we thought.

Several months ago Luxury Travel 360 asked Editor Chipkin to ‘roll out’ his roladex once more to pull in 2007- 2008 data as well as trends on revenue in each travel sector. Here is his Report.

(In our next issue we begin a series of Sector reports that focus on luxury, where the extrapolations present more difficulty. But then, Harvey always loves a journalistic challenge.)

• Worldwide economic activity in travel was up 4% in 2007 over 2006 and  projected to be close to $8 trillion in 2008, according to new data from WTTC.
• Increase of 3% in economic activity is expected in 2008,  but projected to be 4% annually for 10 years after that, reaching…$15.8 trillion in 2018.
• Actual worldwide spend  on travel is estimated by WTTC as slightly less than half that – so that in 2008 actual spending should approach $4 trillion, with annual  percentage increments, as cited above.
• Spending on tourism in the U.S. grew just 2.1% in 2007--- continuing a reduction in growth rates since the peak in 2004. According to TIA, spending on tourism in U.S. was $700 billion in 2006, up from $654 billion in 2005.
• Spending by international tourists in the U.S. increased from $108 billion in 2006 to $122 billion in 2007, according to TIA.