WSJ's "Wealth" expert Robert Frank: The Future of Wealth and Luxury Travel
An Inauguration Day Update by the author of Richistan at ETC Conference
Here are selected highlights:
There are three issues for the wealthy today, according to Frank:
Liquidity: It is the new status symbol. You would be stunned at how little cash the wealthy had. Sheldon Adelson, the Las Vegas mogul, lost $30 billion on paper in the last six moths - a rate of $4 million an hour
Frozen capital: Much of the investment was less liquid than stocks and bonds; instead it was in private equity (subject to capital calls) hedge funds (being locked down) and lenders (now tightening credit).
Serious Asset Value Declines in art, real estate and collectibles. Money going to Cash-Gold-Land (like soybean farms in Nebraska-and, of all things, Champagne-detached for some reason from a declining wine market.
Frank elaborated on concepts he shared with Lux 360 last year on the shift in attitudes of the wealthy, including:
Conspicuous consumption is becoming conscientious consumption
Stuff/status is becoming memories/moments
Indulgence has become health/wellness
The wealthy still want to spend. "I would not want to be in jewelry, fashion or private jets. Travel is doing OK because it fits into some of the above like memories and moments, experiences and education"
When they do travel the wealthy want access and exclusivity because of the dinner conversation factor. They want to be able to say "We toured ruins in Bulgaria with a famous archaeologist." Harvey Chipkin
A Futurist Looks At Travel
Chris Sanderson, co-founder of The Future Laboratory, spoke at the ETC event as well and trained his far-seeing sights on travel. Among other things, he said that "business centers will be more important than spas in the next ten years" because of the conflation of business and leisure - which Sanderson calls, we're afraid, "bleisure."
Among Sanderson's other predictions:
The key words in travel will be Truth - Transparency - Trust
Discounting will be necessary but suppliers must be "discerning" in using the word. And they have to be specific in targeting which markets get which deals.
The "mix" in how people plan travel "has become muddied." Even as travelers use the Internet more, "in some ways travel agents have become more important than ever because they have the voice of authority."
Travel is increasingly becoming about the things money cannot buy - experiences and emotions are treasured.
Eco-tourism has been growing at rates between 20% and 34% per year, and is expected to make up 25% of the world's travel market by 2012, according to the International Ecotourism Society
Travelers are looking for a holiday that tells a story.
The more hectic and fragmented a consumer's daily life, the more he or she will be interested in slower, more meaningful and more immersive experiences. That is why cruising should continue to grow in popularity.
In a trend that Anderson calls "Slowtopia," tourism will once again be about the "glamorous departure" and the "languorous, civilized journey."
Richard Cope, a travel analyst noted, "34% of British consumers say they love travel but hate traveling." As a result, rail travel will continue to grow - even among business travelers. And train stations will become destinations.
Luxury brands will continue to move into travel. Louis Vuitton produces upscale guidebooks; Krug runs Odyssey, an invitation-only tour of Europe by vintage Citroen, modern Range Rover, helicopter and private jet. Last December, Wallpaper, the lifestyle magazine, offered readers trips.
Hotels will become "local cultural hubs" that promote local communities and artisans. The Fox and Anchor, a restored traditional pub in central London, houses six luxury rooms upstairs.
Bleisure: Anderson pointed to Hyatt's new Andaz brand as the new kind of business hotel that features a warmer welcome and local culture
The best travel agents will survive for some years, but it's those willing to engage in constructive destruction that will thrive. They will be able to tap into online social networks to help clients plan their trips.
Embracing and facilitating consumers' new behaviors is the key to survival. Counting on the power of new technology to enhance customer relationships, Sheraton has introduced a social networking facility on its site, on which travelers are invited to share travel stories, recommendations and photos. "Tying together the advantages of a known, global brand and the capabilities of the Internet, a personalized travel experience could be created to surprise and delight."
Ipsos Mendelsohn and American Express Publishing-Harrison Group OfferFreshInsight 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.
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