As demand for travel continues to surge at a fast and furious pace – to the point where 2019 levels have been left in the dust – the question of whether this lucrative trend will continue remains.
Will bookings cool this fall and festive season?
Based on the latest projections from Virtuoso, a global network of some 21,000 luxury travel advisors, the demand for personalized travel will only continue to grow.
Misty Belles, vice-president, global public relations at Virtuoso, shared the latest stats on Monday (Aug. 15) at Virtuoso Travel Week, which PAX is covering on location in Las Vegas, Nevada.
Addressing journalists in a meeting room at the Aria Resort and Casino, Belles reviewed some of the factors that are driving “incredibly high demand” in the luxury segment, which was, notably, among the first groups to rebound during COVID.
A convergence of high demand for travel and affluent individuals who are willing to pay for it is fueling the boom, Belles said.
READ MORE: Virtuoso honours best cruise lines of 2023
And the good news for luxury travel advisors is that more travellers, after navigating the pandemic, are seeing the value in using a trusted professional.
“We’ve seen a sustained 50 per cent increase in the number of people looking for a Virtuoso advisor, through our website, since the beginning of the pandemic,” Belles said.
In terms of market activity, Virtuoso, from a then (pre-COVID) and now perspective, is tracking “shifts” in the luxury space.
Binge TV, for example, is now “binge travel,” Belles said. That could refer to the number of trips people are taking, or just how a lot of TV these days presents travel in that way.
Other shifts? “WeTime” is now “MeTime,” which refers to a rise in solo travel, and “the return to Italy is now the return to Japan,” Belles said.
Self-care (which is still important) is now self-aware. “It’s not just about taking care of yourself, but planning and engaging in experiences that really fulfill you,” Belles said.
And while the travel industry, last year, may have been ready to embrace a “new normal,” the market’s activity, now, is receding back to an “old normal” in terms of seasonality.
Or is it? If anything, Virtuoso’s message to its advisors, right now, is to book clients as early as possible.
“There are markets, such as China, that are opening up, so you're going to see a flood of 155 million Chinese people travelling come spring next year,” said Úna O’Leary, general manager of Virtuoso Canada, speaking to PAX at the conference. “ADRs are going to be higher, and rooms aren't going to be available.”
For this reason, there’s a push to book clients in lesser-known places where crowds are smaller.
“I just came back from Paris and oh my goodness, there were so many tourists,” O’Leary said. “We’re coaching people to go in shoulder seasons.”
Look at the numbers
One could speculate on what the future holds, but the numbers speak for themselves.
For the first half of 2023, from January to June, Virtuoso’s revenue “blew 2019 and 2022 out of the water,” Belles said, noting how sales are now 69 per cent higher than 2019 levels, and 36 per cent stronger than 2022.
And every category of travel is up (with exception to air), Belles said.
The demand for international travel in Virtuoso’s key markets – Canada included – is now on par with 2019, she said, and average daily rates at hotels are still high.
Will this demand last, though? Virtuoso thinks so, as 2024 and 2025 are already looking impressive.
The consortium compared its data with 2019 and 2022 – 2019, for one, was a high watermark for luxury travel – and saw that future sales are up significantly (107 per cent higher), and up 39 per cent of where Virtuoso was in 2022.
Ontario-based luxury travel advisor Wendy Davis, owner of Zebrano Travel, which is endorsed by Forbes, believes this growth will continue thanks in part to rising wealth levels in both the U.S. and Canada.
According to Credit Suisse’s annual Global Wealth Report, the number of millionaires in Canada will surge to nearly two million people in 2023.
“It’s massive,” Davis told PAX. “There are not enough luxury hotels to service the demand that’s coming.”
Some luxury advisors are set up for future success as their affluent clients, one day, may pass down their travel advisor to their children, resulting in a new generation of business.
“With my clients, their kids are also my clients. They're going to inherit a lot of money,” Davis said.
The big cruise, the “and cruise”
Cruise, too, is charting a successful course. Belles said that future cruise sales at Virtuoso are up 46 per cent compared to what they were in 2019, and 44 per cent over 2022.
“When you consider the amount of product coming into the market, it’s not market saturation. That’s just demand driving that,” she said.
High-net-worth travellers, these days, aren’t just planning their next cruise, but they’re also planning an “and cruise,” Jennifer Suarez, associate vice-president of national accounts, the Americas at Celebrity Cruises told PAX.
“They’re saying, ‘Yes, I want to plan my Australia and New Zealand cruise for next year, but I might also want to do a short Caribbean cruise this year, in the next two or three months,” Suarez said. “They’re planning multiple trips.”
Fall & festive season
But again, the numbers. This fall and festive season, Virtuoso’s hotel bookings are up 36 per cent – even if rates have soared upwards by 47 per cent.
This season, some hotels in markets will command a higher rate – such as Mexico and Hawaii, for example. But other regions are softening, such as the Caribbean, Belles said.
(Virtuoso’s numbers, notably, were pulled before devastating wildfires in Hawaii).
In terms of where luxury travellers are heading this season, the United States ranks high, claiming the top spot globally, followed by Italy, France, the U.K. and Mexico.
Meanwhile, Virtuoso’s top cities for the season include Paris (up 11 per cent over 2022), London, Florence, Rome and New York.
Out of Canada, the U.S. also ranks as number one, followed by Italy, Canada, France and the Maldives, Virtuoso says.
“People are travelling more mindfully,” said O’Leary. “They’re travelling to destinations they wouldn’t have potentially gone to before.”
Canadian luxury travellers, for one, are booking in smaller groups, enjoying trips with their families, and seeking experiences that are meaningful, she said.
Like expedition voyages, which O’Leary says is Virtuoso’s number one growth area in the category of cruise.
And while Europe (France, Italy, Croatia, in particular) is still on the minds of affluent Canadians, many are also booking staycations within Canada, O’Leary added.
Fogo Island, the largest of the offshore islands of Newfoundland and Labrador, has emerged as one go-to destination, for example.
And more operators are seeing Canada’s potential.
One Virtuoso partner PAX met with at Virtuoso Travel Week, during a “speed-dating” session with executives, was Entre Canada, which designs luxury off-the-beaten-path itineraries in provinces and territories that are unknown to tourists, the tourism industry and most Canadians.
“Their experiences are unparalleled,” O’Leary said. “You’re not just seeing polar bears, you’re immersing yourself in a completely different culture.”
This is where Indigenous tourism also factors in. It’s another travel category that’s gaining steam, O’Leary said.
All about the experience
Virtuoso clients take these experiences seriously – Belles said 57 per cent of customers say that creating a travel experience that meets their expectations is more important than the price.
The demand for private experiences is trending high, while yachting is also up by a whopping 79 per cent over 2019.
Luxury travellers are seeking experiences that “push them out of their comfort zone,” and challenge them both physically and mentally, Belles said.
This is why scientific expeditions – ones that allow travellers to shadow researchers in Antarctica and the Galapagos Islands, for example – are seeing more interest.
Food and wine is also a good motivator.
Virtuoso recently surveyed two of its communities – advisors who fall into niches, such as adventure, culinary, family, cruise, wellness, and ultraluxe travel – and 70 per cent reported seeing an increase in culinary travel (20 per cent of clients will book trips with food and wine as a focus).
“And they’re willing to pay top dollar for it,” Belles said. “Almost half are spending $10,000 to $25,000 per trip, and 15 per cent are even paying $25,000 to $50,000 for a culinary-focused trip.”
Brewery and distillery tours are in high demand, so is local dining – not just farm-to-table experiences, but “neighbourhood-to-table” as well, as Belles put it.
And while you’d think Michelin-star restaurants would rank high among luxury folk, it isn’t the case across the board. In Virtuoso’s survey, just 38 per cent of advisors selected that factor as a motivator.
Meanwhile, it appears cruise lines have stepped up their game in the culinary world.
When asked to identify their top places to dine, Virtuoso clients noted Europe (Italy and France), but also cited ocean and river ships, which came in at second place.
Wellness isn’t slowing down either as 94 per cent of Virtuoso travellers incorporate it into their travel, Belles said. “It’s not the main or standalone reason. It’s just part of the itinerary,” she said.
Top destinations for self-care include Mexico, the U.S. and Europe, while Thailand, Bali, Fiji, Iceland and Africa are “emerging destinations.”
Meanwhile, Virtuoso’s latest Impact Report on Sustainable Travel, released this week, highlights Virtuoso partners and how their practices are viewed by guests.
Based on the findings, eighty-eight percent of travellers want to see their tourism dollars go toward protecting the planet – initiatives, such as waste management and recycling, protecting and restoring landscapes, and the use of renewable energy (such as solar, wind, hydro or geothermal).
Room to grow
Vancouver-based Kemi Wells of Wells Luxury Travel, which is also endorsed by Forbes, sees “huge opportunities” for travel advisors in Canada because, based on her experience, there’s a population of affluent Canadians who aren’t yet fully aware of travel advisors and what they can do.
“There's a lot of people who have never worked with anyone before,” said Wells, who specializes in curated, customized FIT travel. “They’re booking $30, $40,000-dollar trips online…and many are still buying all-inclusive packages.”
Wells, whose business has nearly tripled since last year, believes it comes down to educating consumers on the benefits of hiring a travel professional.
“There are affluent clients booking trips online, by themselves, because they saw how lovely that hotel in Africa looked without realizing that they could have had an advisor make that whole trip seamless,” she said.
How did Canada make its mark at Virtuoso Travel Week? Stay tuned for more of PAX’s exclusive coverage from Las Vegas.