The term 'affluent traveler' pops up now, especially in business research, and it portends big changes for the way you spend your vacations.
The concept of luxury travel is one that’s been around since the first time humans left a place for a little while, only to return home again. When we go somewhere, we all want a little slice of luxury. But what “luxury” really means is, like many things, wholly subjective. If you spend your days in the cramped upstairs apartment of a dreary triplex, a log cabin with a wide expanse of yard could be luxurious. Similarly, if you spend your days in a gilded palace with furniture that should probably be in a museum, your idea of “luxury travel” will be quite different. Put another way, there are different levels of luxury, specifically for affluent travelers.
What Are Affluent Travelers?
The affluent travelers concept comes from research and analysis of travel trends in the hospitality industry. Lots of folks like to travel in luxury, but since luxury is relative, affluent travelers are those who want special treatment. They like feeling like VIPs, but not having every whim catered to.
While they travel less, when they do, they spend big. Analysts define affluent travelers by three traits. The first is their annual household income, specifically more than $250,000. The second is their minimum net worth, with affluent travelers usually having at least $2 million, not counting their primary residence. Finally, they tend to fly first class and stay in top tier accommodations when they travel.
From this profile, analysts are able to further classify affluent travelers. For example, 82 percent of affluent travelers are married with a household income no greater than $500,000 per year. More than 60 percent are employed full time and spent four or more years in college. A plurality are Baby Boomers with kids at home.
They love to travel, and typically look to travel more than they do. However, when they travel they spare no expense for high class living while they are away. So, businesses who wish to cater to affluent travelers use this analysis to develop things that they will think they like.
Who Are Affluent Travelers?
To understand who affluent travelers are, beyond their statistical demographic makeup, you must first understand what it means to be a luxury traveler. In this particular case, luxury travelers are defined by their willingness to pay more for comfort, convenience, and finery.
The overlap between the affluent travelers and luxury travelers is smaller than you think. Data gathered by MMY Global finds that little more than a third of affluent travelers are also luxury travelers. This means, at the very least, that “luxury” branding doesn’t appeal much to the affluent sect.
Affluent travelers are people for whom the idea of luxury probably has less appeal than it does for others. Given their average income level, net worth, and marital status, it’s safe to assume that even their kitchens are luxurious. So, simply promising pretty rooms and fancy foods isn’t enough to catch their attention. You have to understand what sort of things they want and what motivates them to go where they do.
How Do Affluent Travelers Differ from Luxury Travelers?
Now that we know who affluent travelers are and how much they are worth, it probably sounds like calling them “luxury travelers” would make just as much sense. But as mentioned above, luxury is subjective. In fact, you might argue that what defines luxury with respect to travel is if it is “nicer” than what folks have at home. When you’re taking a crowded bus to work every day, a shuttle van from the airport to a beachside hotel is a luxury. Yet, if you routinely use an executive car service, a shuttle van is a serious downgrade, even if you are going to paradise.
Luxury travelers are folks who want to live a luxury lifestyle, even if it’s just for a brief time. Affluent travelers are those for whom luxury is close to their every day experience. If airlines or resorts want to attract their business, they have to up their game. Though, just because these folks are in the top one percent, it doesn’t mean they don’t want a deal. Data from MMY Global reveals that nearly 70 percent of affluent travelers are “aggressive” shoppers, meaning they hope to negotiate. An equal number doesn’t expect to have pay an astronomical price in order to get the best quality.
Where Do Affluent Travelers Like to Go?
Anyone looking to attract affluent travelers needs to be willing to do some wheeling and no small amount of dealing in order to win this business. They also need to be located in the places these discerning globetrotters like to visit.
Only about a quarter of affluent travelers do not have a valid passport, so they like to travel internationally. Eight out of ten, according to MMY Global, want to visit places they’ve never been before. Additionally, they desire places with gorgeous vistas that allow for relaxing quiet time. (Though, a majority of affluent travelers admit that they stay in touch with the office, even on vacation.)
This profile helps explain the kinds of services they look for. For example, affluent travelers who are in the millennial generation are the future of the business. More than two-thirds of affluent travelers born between 1981 and 1996 are willing to pay a lot of money for travel services branded as “experiences.” Whether it’s diving at the great barrier reef or hiking in the mountains, these affluent travelers don’t want to just go and sit on a beach somewhere. They want their relaxation to be active, exotic, but also very comfortable.
What Do Affluent Travelers Want from Their Destinations?
Millennials aren’t the only affluent travelers who prefer an experience when they get away from it all. Affluent travelers have a sense of adventure, at least to a point. They have the means, so they want to see what the world has to offer. They might go to Bora Bora one year, and then jet off to Greece the next. They want to be excited by exotic vistas and weird local history. They want a place full of options, but not something so structured or so active they can’t just stop and chill from time to time. Of course, that means along with adventure, affluent travelers expect a certain level of comfort.
Luxury travelers love to be fawned over, but affluent travelers enjoy the same sort of services but without all the fuss. These folks value their privacy, as their prime motivations when traveling for leisure is to get away from their busy lives. More than 40 percent of these travelers say they “totally disconnect” when they’re away. Of course, for the 53 percent who do keep in contact with their offices, that just means their relaxation time comes at an even greater premium. Those who cater to affluent travelers will want to have amenities available but should not be surprised if they don’t bother with them.
So, All These Affluent Travelers Do Is Take Vacations?
Affluent travelers actually take fewer trips per year than luxury travelers, according to the MMY data. However, that data only considers leisure travel. Affluent travelers may also travel for business, but their desires remain the same. They value efficiency, privacy, and comfort without too much fanfare.
In order to woo these customers, businesses catering to travelers alter what they offer to better meet those needs. This doesn’t mean that they are ignoring luxury travelers or people who just want a nice place to sleep on the road. It just means that the business is changing.
Put another way, businesses catering to travelers want to win over these lucrative customers any way they can. They don’t make up most travelers, but there isn’t a travel service, hotel chain, or airline that doesn’t want their business. And whatever they are doing is working.
In the recent MMY reports, a majority of affluent travelers say they want to do more traveling in the future. That might just be wishful thinking. Who doesn’t want to take more vacations? But if they do actually travel more, you’ll see more places catering to their needs. For example, resorts may offer fewer “shared” tours and events. While luxury travelers don’t seem to mind these, affluent travelers don’t seem that interested in them.
What Can We Expect from Affluent Travelers in the Future?
As described above, Baby Boomer affluent travelers want different things than Millennial affluent travelers. Yet, the things they both seem to equally value can positively affect travel for everyone.
The Baby Boomer set tends to not enjoy the touristy places the rest of their generation seems to love. The prefer quiet, comfortable places that are more unspoiled. Millennials, on the other hand, like that sort of thing, but for different reasons. While they enjoy privacy as much anyone, they also care about their impact on the environment and the local population.
This push for sustainable travel experiences from such a powerful sector of the marketplace will influence how travel destinations develop. For example, the Manuel Antonio national park in Costa Rica has to accommodate more than 150,000 visitors each year, but in a way that doesn’t harm the environment. With the government behind them they can do that.
Such an investment is far riskier for a private company. Yet, if affluent travelers are drawn to these places, they have the incentive to create destinations full of natural splendor with little disruption. Places that, given the nature of this industry, everyone will soon be able to enjoy.
Affluent travelers are not concerned with the trappings of luxury, but rather prefer comfort, quiet, and being left alone.
Affluent travelers are not going anywhere, as they've established themselves as a desirable corner of the travel market. However, this doesn’t mean that luxury travel is going anywhere either. People love to slip out of their lives for a time, spoiling themselves on whatever it is they find luxurious. It’s fun to treat yourself, and even affluent travelers do it from time to time. (At least, a third of them do.) Yet, if you love to travel you will soon see their influence on what’s available out there.
What do you think of all this? Would you rather be a luxury traveler, being waited on hands, feet, and all? Or would you rather be an affluent traveler, in a quiet, beautiful place where you can be alone with your thoughts? Tell us in the comments below.