Do Luxury Guests Really Want Pool Escorts?

Luxury spending pulse-taker Pam Danziger, who heads up Unity Marketing, says luxury suppliers need to adapt in dealing with customers whacked by the Recession - stick to values; and understand YOUR customers - not the customers of the guy down the block.

danziger.jpg  For her most recent study she added a new "Luxury Consumers' Attitudes and Motivations Report: A Study of the 'New Normal' Luxury Consumer Market after the Recession." Her overall impression: "The current recessions has greatly altered the luxury marketplace, likely for good "And she is less than sanguine about the travel segment, saying, "Travel is a trailing indicator. In our tracking ALL other categories have shown year-over-year increases in spending EXCEPT the luxury travel sector."

Danziger's Travel Take:

  • There has been a significant cut back on travel spending among consumers known for making luxury purchases.  In the first three quarters of 2009 luxury travelers' spending dropped 21 percent from levels reached during the same period in 2008, from $22,072 to $17,471 in 2009. 
  • In 2009, "we have not seen a real pickup in terms of luxury travel."
  • One positive note: "To me, when you ask luxury consumers where they get their happiness and satisfaction, it does come from experiences - things like travel. However, it's also viewed very much as a discretionary spend - perhaps more than entertaining and dining."
  • Advice: find out what your customers want - with the emphasis on your customers and not the customer at the hotel down the block. "A traveler staying in a boutique hotel may be spending the same as a guest at the Four Seasons, but they are looking for something different."
EXAMPLES:  At some hotels, the waiter would come out with the wine bottle and pour a glass for diners; other hotels might have had pool escort who took you to your chair. "Now they are focusing on what consumers truly value."

And some more highlights from Danziger's study on attitudes:

  • For most upscale customers, luxury is best enjoyed as an occasional pleasure, rather than part of one's everyday life experience, as 80 percent of those surveyed agreed, "I've been lucky to enjoy certain luxuries in my life, but luxury is not a part of my lifestyle."
  • Luxury brands have to deliver exceptional quality and value; they can no longer rely solely upon their brand name or reputation, as 84 percent of survey respondents agreed, "I don't mind paying more for high quality products, but I don't want to pay a lot just for the luxury brand name."
  • A cultural shift is taking place among those with means away from luxury indulgence toward a more conscious, careful consumer mindset.  The end result will be people unlikely to pay such high prices again for luxury, as half of those surveyed agreed, "Even after the economy improves, people aren't going to go back to buying luxury like they used to."

Affluent Leading The Way Out?

  • As for our editorial position that the affluent might lead us out of the recession because current pricing makes luxury at some level more affordable,  Danziger cautions, "You need to be careful about broadening your market. My husband and I are empty nesters and don't want a lot of children around. Again it comes back to understanding your customer. In this era of services you need to go after the people who fit your product profile."