Once again, Strategic Vision has sponsored the American Affluence Research Center’s (AARC) Affluent Market Tracking Study, a survey of the wealthiest 10% of households determined by the Federal Reserve Board based on net worth. I continue to advocate the importance of this kind of research and data collection for industry leaders to gain insights and implement effective marketing strategy in the luxury travel arena.
The survey is based on a self-administered questionnaire mailed to a randomly selected national sample of 4,500 households expected to meet the minimum net worth requirement of $800,000. Following a weighting of respondents, the participants have an average residence value of $1.3 million, an average household income of $295,000, and an average net worth of $3.1 million. Read on for their valuable insights….
Booking Leisure Travel – Online Travel Agencies (OTAs) Or Traditional Travel Advisors?
In this flourishing digital culture, we all know that leisure travelers increasingly use their computers and mobile devices to book travel. While the growth of OTAs is undeniable, the number of those surveyed who continue to work with travel advisors or make a direct call to a branded entity (airline or hotel) still outweighs use of OTAs when combined.
Opportunity For Travel Advisor Growth
The research found that a remarkable 66% of those surveyed rely on an advisor or reach out to a major brand when booking leisure travel, and the ability for affluent travelers to make a direct connection is still an appealing influencer.
When asked if they had employed a traditional travel agency to book leisure travel in the past year, 23% of respondents said they had. And 20% of those surveyed said a traditional travel agency was the choice they used most often for booking travel.
Forty-three per cent answered that they book directly by calling airlines or hotels, or using their websites. Of those who book in this way, 30% were under age 50. As a young travel advisor recently told me, “There is so much information out there through OTAs and online resources, the agent becomes the editor/navigator for the client.”
Are Hotel Loyalty Programs Important?
Marketing and branding strategies necessarily adjust with the changing times and consumer habits. In this mobile-driven and online booking climate, a significant number of affluent travelers trend toward brand loyalty in the hotel category. In the American Affluence survey, 63% of those responding said that hotel loyalty programs are either very or somewhat important. Of total respondents, 52% said they were members of Marriott Rewards, 45% joined Hilton Honors, and 32% belonged to Starwood’s program.
Overall, the responses of high net worth consumers to survey questions regarding leisure travel booking offer encouraging numbers and promising opportunities for travel advisors to expand their client base as affluent travelers seek a connection and strong brand direction.
Cautious Optimism Looking Forward
As 2014 begins and consumers look ahead, a few interesting findings of the American Affluence survey are worth considering:
• The affluent seem to have a slightly better outlook for the economy and their personal wealth than the general public. Almost a third expect their net worth to be higher in March 2014.
• The new research reveals a significant 7 point improvement among those surveyed who said they planned to defer or reduce expenditures in the coming 12 months. Only 37% said they would cut back this year as opposed to 44% of affluent respondents in Spring 2013 – a forecasting of positive spending trends as we enter 2014.
• An encouraging mood and spending plans of the affluent may be carrying through the new year with the stock market hitting record highs on Christmas Eve – 2014 is a year to watch.
For further information, visit www.luxurybeat.com.