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Ipsos Mendelsohn and American Express Publishing-Harrison Group
Offer Fresh Insight on Consumer Behavior in 2010
According to new studies from two blue-chip research sources, Ipsos Mendelsohn and American Express Publishing - the affluent are not only ready to travel -- they are frequently going to spend more on it. While the Ipsos study focused on intent and American Express Publishing on mindset, they both point to a surge in affluents taking to the road (Amex sees an increase of 6 to 8% in spending on all luxury categories). Interestingly, both studies agree on a positive attitude despite lingering concerns about the economy. Here's a look at the highlights of both 2010 studies.
LuxuryTravel 360 has long looked to the affluent as a burgeoning market in business and leisure travel, fueling growth in more affordable, common sense luxury - less glitz and glamour, but ready to pay extra for memorable family experiences and genuine local culture.
The latest research from Ipsos
Mendelsohn shows that to be the case. For one thing, the
numbers are powerful. According to Bob Shullman, president of Ipsos
Mendelsohn, there are 43.1 million heads of households earning annual
incomes of $100,000 or more.
And in fact, the
Affluents never stopped traveling - with 90% reporting they have taken a
trip in the past 12 months. Most of that travel was domestic - 41% for
business and 44% for vacationor personal reasons. But 10% took foreign
trips for vacation and personal reasons; and 5% for business reasons.
Affluents and Agents: Still A Strong Connection
About one in ten affluents - which is a hefty 4.3 million people -
reported using a travel agent in the past 12 months for domestic trips -
and 12% for foreign trips.
Interestingly, affluents found their agents primarily through their
employer's travel department recommendations (28%), recommendations from
friends or family (24%), walking into an office (19%), or on the Web
(15%).
And affluents who do use agents continue to be very highly
satisfied - in the high 90's either very or somewhat satisfied with
their experiences.
An Affluent State of Mind
The research also revealed some compelling psychographic insights into
how the affluent feel about traveling, including:
- Two thirds would pay extra for comfort and service
- Half feel that traveling internationally helps them learn about
other cultures
- Nearly half prefer traveling domestically rather than abroad
- About a third indicated they like to go to places off the beaten
track
- One in four said others often ask their advice about travel
2010: An Affluent Odyssey
The affluents are hitting the road this year with 87% planning to travel in 2010. About 80% plan a domestic trip for vacation or personal reasons; about one-third are planning domestic trips for business reasons; about a third are planning foreign trips for vacation or personal reason; and fewer than 10% are planning foreign trips for business reasons.
Not only that, but they are planning to spend more - with percentages ranging from the high 70's to the mid-80's saying they would be spending the same or significantly more.
Many in the industry see 2010 as a transition year to a 2011 recovery. And, again, it seems that affluent households are getting a head start on that recovery - prepared to hit the road full throttle next year.
American Express Publishing surveyed both the affluent - and the wealthy - the top 10 percent of Americans by income - looking deep into their mindsets (each questionnaire took 50 minutes to complete) to find some interesting, sometimes startling conclusions (The sample is weighted to be representative of the top 10% so the findings are nationally representative of those who have $100,000 or more in "discretionary" income - household income less property - related expenses like mortgages and incomes; the mean household income for this top 10% is $240,000).
- The affluent and wealthy have become happier. Seven in ten rate themselves as (very happy) versus only four in ten in 2007. Also, they are more likely to rate themselves as successful today than before the recession - only feeling more successful at life and not just at work.
- The wealthiest consumers have become wealthier.
- They are increasingly immune to persuasion.
- Generation X professionals are now experiencing an "Economic Status Jam." A large percentage are "worried that their careers have stalled" and about a quarter are "worried they don't have the skills to remain competitive." One reason for this feeling of stalling is the increasing number of Boomers who are delaying retirement (now a full quarter of all Boomers in this group.)
- Social media remains mainly social, but desire for digital information and content is growing - but not at the expense of traditional media
- Resourcefulness, self-sufficiency, value and needs-based purchasing dominate.
As a result of these attitudes, American Express Publishing sees a luxury spending comeback for the first time in three years.
One reason is that the number of households in the ranks of the affluent and wealthy has increased for the first time in years. More, the wealthiest got even wealthier - even as overall median incomes fell.
Despite that unequal recovery, guilt or angst over purchasing luxury goods is lessening. Fewer people say they feel guilty purchasing luxury goods (55% to 45% in the last year) and more say they like it when others recognize them as being wealthy (up from 30% to 42%).
Dr. Jim Taylor, vice chairman at Harrison Group, the research firm that partnered with Amex on the study, said, "Interest in luxury is trending up, but this interest is qualitatively different from the unbridled enthusiasm that characterized the "glutonomy" of the mid-2000s. People take pride in the way they have managed their finances and family through recession," Harrison continued, "we are decidedly not seeing the return of the old economy."
The survey labeled this new outlook: "New Age Pioneers in a World of Resourcefulness" - the new pioneers more on top of their household finances, communicating more clearly with loved ones and taking pride in shopping smarter.
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