Welcome to Luxury Month
Welcome to Luxury Month at BTN
Would it be tempting fate to say that the luxury travel sector is actually doing rather well? asks Adam Coulter (pictured), editor of Breaking Travel News.
The International Luxury Travel Market has just kicked off in Cannes with more than 1,200 suppliers, 214 stand holders and 1,100 buyers.
For the first time Iceland has sent a delegation and there are an increased number of buyers from Brazil.
In fact, a total of 43,083 scheduled appointments with exhibitors have already been planned.
Initial reports from the show suggest that the recession has ‘bottomed out’.
And not only that, but some operators are even sticking their necks out to predict that 2010 will be OK.
Speaking on a panel at the ILTM, One&Only Resorts’ president Paul Jones said: “Luxury travellers are not prepared to forego their annual family trips.”
He has hit the nail on the head here: However deep the country is in recession, the one area the luxury sector won’t cut back on is a holiday.
Yes, luxury travellers may look for added value or three for two offers or perhaps even travel in economy rather than business, but when it comes to their favoured choice of hotels and destinations they do not compromise.
This is also borne out by research from PriceWaterhouseCoopers which claimed the super-rich luxury travel market has remained unscathed by the recession.
The same research shows that astonishingly, and despite all indicators to the contrary, year-on-year profits in the luxury travel sector are in fact up.
The one area that remains subdued is corporate travel, and there are little or no indications that this is likely to improve anytime soon.
The issue here is that despite some corporates – most notably big investment banks – returning to profit in a big way, there is a lag in terms of getting their high-flyers back in the front of the plane (some would argue this will never happen again; I disagree).
So the luxury market has been surviving on the high-spending leisure sector to keep it afloat, as Jennifer Fox, chief operating officer at IHG said in Cannes:
“Corporate has dropped 25%, but leisure is strong still,” she said on the same panel as Paul Jones.
It’s exactly the same story at poor old British Airways, where chief executive Willie Walsh has been left reeling from the drop-off in corporate customers.
The one saving grace is a pick-up in premium leisure passengers who have been adept at making the most of the airline’s deeply-discounted fare offers to move to the front cabins.
Over the pond, the tentative signs of recovery are also appearing.
STR has just released a report showing that the one sector which is bucking the general hotel doldrums in the US is the luxury segment.
So what are we to make of all this?
Well my guess is that luxury never actually went away, it has just been a bit less conspicuous.
Editor, Breaking Travel News