Tracking the Mighty (but complex) Math of luxury Travel-Part 1

hsarbin.jpg No slam dunk here! But let’s get started, with first focus on the USA.

Why not get real about who’s really rich, and what rich means when it comes to travel? Who can afford it? Which Americans fill those luxury hotel rooms and cruise cabins and first class and business class airline seats? And even those private jets?

Certainly we can do that with clarity? Not so fast!

  • Pam Danziger at Unity Marketing relies on the most recent Census Bureau statistics from 2006 to estimate that 9million ( 8%) of households with $150,000 annual income are able to reach for luxury trips.
  • Ron Kurtz of The American Affluence Research Center, using numbers from the Federal Reserve Board, defines the affluent market as the wealthiest 10% of households, = minimum net worth of $3 million and annual income of $270,000,
  • Meanwhile,  Monroe Mendelsohn Research (MMR), uses $250,000 in annual household income and over 1 million in net liquid assets, as a luxury qualifier, which nets 2 million households

At the moment we are clearly not all together on the metrics of luxury consumers.
So let’s stop right there while we invite other luxury researchers to join in, and also ask:

  • How many affluent/rich households actually drive luxury travel demand?
  • Isn’t number of luxury trips taken annually a more meaningful metric, as Mendelsohn data seems to suggest?
  • How many business travelers are creating luxury demand, where personal income is not necessarily the luxury driver ?
  • Are conferences, expos, meeting attendees not an essential part of our picture?
In asking these questions, and searching for insights on the behaviors of affluent consumers (a critical part of the math and the bottom line), we see the answers as critical in deciding whom we target as buyers, and where and how we reach them. The math (numbers and behaviors) help us shape strategies in loyalty marketing, special interest product offerings, and development investments. They anchor our marketing intelligence.

So we begin, and persevere as well.
Tune in next week, and meanwhile, these links to related stories and sites of sources.
Monroe Mendelsohn - www.mmrsurveys.com
American Affluence Research Center - www.affluenceresearch.org
Unity Marketing (Danziger) - www.unitymarketingonline.org